GST for tradies NZ
Plumbers, sparkies, builders, painters and other on tool businesses: when you must register, how to quote labour and materials, and what GST you can claim back on every invoice.
This guide is for New Zealand tradies who invoice labour and materials every week: sole traders, companies, and subcontractors. It covers the $60,000 registration line, quoting at 15%, taxable supply information, claimable tools and utes, and how progress claims sit beside the separate retentions rules. Figures are working papers for the 2026/27 year (1 April 2026 to 31 March 2027). GSTCalc.nz is not Inland Revenue (IRD). Ads may fund this free site. This is not tax advice.
Checked against IRD registering for GST guidance, taxable supply information rules, GST guide IR375, and the Goods and Services Tax Act 1985. Construction retentions and buyer created invoices have their own deep dive: this page does not replace that post.
Quick take for the van
If you are GST registered, add 15% to the whole job (labour + materials + travel), claim GST on business purchases you hold records for, and set the GST aside so myIR day is not a surprise. Full time tradies usually hit the $60,000 threshold fast because materials inflate turnover even when profit is thin.
Do you need to register?
On IRD’s registering for GST page you must register if you carry on a taxable activity and either your turnover was at least $60,000 in the last 12 months, you expect it will be in the next 12 months, or you already add GST to your prices. Threshold detail sits in the $60,000 GST threshold guide. Steps to enrol are in how to register for GST in NZ. Broader trade and sector topics live in Industry Specific GST.
Tradies buy a lot of GST inclusive stock from merchants. Under the threshold, voluntary registration can unlock input tax on tools, ute costs (business share), and materials. The trade off: you must charge GST, keep taxable supply information, and file returns. Weigh it in should I register for GST voluntarily.
How to quote: labour, materials, travel
Once registered, GST sits on the total taxable supply, not on labour alone. Call out fees, after hours premiums, and travel charged to the customer are usually in the same basket. Work GST exclusive, then add 15%. If a homeowner wants an inclusive figure, extract GST with IRD’s 3÷23. Use the free GST calculator on the homepage to add or remove 15% on any quote line, or read GST maths NZ for the formulas.
Private homeowner
Lead with the GST inclusive price so the bill matches what leaves their account. Fair Trading Act honesty still matters: do not hide GST in fine print.
GST registered commercial client
“Plus GST” quotes are common. They claim input tax if they hold your taxable supply information. Your output tax and their input tax should match the same supply.
GST at 15% = $300
Inclusive total = $2,300
Inclusive $2,300 × 3 ÷ 23 = $300 GST
Taxable supply information on job invoices
From 1 April 2023 IRD uses taxable supply information instead of rigid tax invoice wording. You can still label documents “Tax Invoice”. What you must keep depends on value. Full rules: taxable supply information.
| Supply value (incl GST) | Minimum records (seller side) |
|---|---|
| $200 or less | Seller name, date, description, consideration |
| More than $200 up to $1,000 | Add GST number and clear GST amount or “GST included” statement |
| More than $1,000 | Add GST registered buyer name plus an identifier (address, phone, email, NZBN, trading name, or website) |
What tradies usually claim (and what they do not)
Claim input tax only to the extent costs support your taxable activity. Hold taxable supply information. Mixed private use needs a fair split. Vehicle and home office detail: claim GST on a car or home office and GST on motor vehicles.
| Usually claimable (business use) | Usually not claimable |
|---|---|
| Job materials, consumables, hire of gear | Everyday lunch, coffee, snacks on site |
| Power tools, ladders, scaffolding, PPE, high vis | Ordinary jeans or tees with no PPE role |
| Ute or van purchase and running costs (business %) | Private km share; fines and penalties |
| Phone, job software, accountant, trade insurance | Wages (no GST on salary) |
| GST registered subcontractor invoices | Unregistered sub invoices (no GST charged) |
Pull highlight: entertainment style meals with clients usually follow the 50% path. See GST on entertainment expenses. Stock or materials taken home for private use need a private use adjustment, not a silent claim.
Real jobs on the tools
Use case: Hamilton plumber
Situation: GST registered sole trader quotes a hot water cylinder swap. Exclusive labour $480, exclusive materials $920, call out $60. GST: subtotal $1,460 × 15% = $219. Inclusive invoice $1,679. Claims GST on the merchant invoice for the cylinder. Action: save exclusive workings, issue taxable supply information to the homeowner, set $219 aside until the return is filed.
Use case: Auckland sparky (subbie)
Situation: Subcontracts to a head contractor for $8,000 exclusive per month and also receives schedular withholding on some labour. GST: still charges 15% on taxable fees if registered. Withholding tax is an income tax cashflow issue, not a substitute for GST. Action: keep GST and WT separate in the bank; contractor basics in GST for contractors.
Use case: Christchurch builder
Situation: House alteration with progress claims and a 5% retention. GST: do not issue taxable supply information for the retention until it is payable if you want to avoid paying GST on money still held back. Action: follow payment claim then certified amount invoicing in construction and retentions GST.
Progress claims, deposits, retentions
Each progress claim or deposit that is a taxable supply carries GST under your accounting basis. On invoice basis, issuing the invoice can lock in GST before cash arrives. Payments basis (where you qualify) aligns GST with money in the bank. Deposits and staged billing: GST on deposits and progress payments.
Retentions are a cashflow trap, not a maths trick
If your taxable supply information covers the full contract including retention, output tax can fall due on the whole amount. Structure claims so you only document the certified release now, then invoice retention when it is released. That workflow is the whole point of the construction retentions guide linked above.
Accounting basis and filing
When you register you choose filing frequency and accounting basis in myIR. Many small tradies pick payments basis because customers pay late. Confirm you still meet IRD’s turnover tests for that basis. Frequency changes later: change GST filing frequency in myIR. Compare bases in invoice basis vs payments basis.
Subbies, apprentices, and head contractors
- ✓ GST registered sub: their invoice includes GST; you claim it if the cost is for taxable work.
- ✓ Unregistered sub: no GST on their bill; you still charge GST on your full client invoice if you are registered.
- ✓ Apprentices on wages: PAYE territory, not a GST supply. Use the PAYE calculator for take home maths.
- ✓ Buyer created taxable supply information: if the head contractor issues it, do not also issue your own for the same supply.
Materials used on your own house
Taking trade priced stock for private use is a private use / change of use problem. Reverse the GST you claimed or account for the adjustment. Do not leave job stock as a silent drawings. Related reading: private use of stock, samples and giveaways.
FAQs
Do NZ tradies have to register for GST?
You must register if you carry on a taxable activity and your turnover was at least $60,000 in the last 12 months, or you expect it will be in the next 12 months, or you add GST to your prices. Many full time plumbers, sparkies and builders hit that line early.
Do I charge GST on labour and materials separately?
No. Once you are GST registered, 15% GST applies to the total taxable supply on the invoice: labour, materials, markup, travel and call out fees together. Work from GST exclusive figures, then add 15% (or extract GST with 3÷23 if the quote is inclusive).
Should tradies use the payments or invoice GST basis?
Most small tradies under the payments basis turnover cap choose payments basis so GST follows cash in the bank. Invoice basis can force you to pay GST on unpaid progress claims. Check Inland Revenue filing frequency and accounting basis rules when you register.
Publisher path: About Us and Contact Us. Claiming overview: claiming GST NZ.
Last verified 31 August 2026 against Inland Revenue registering for GST, how taxable supply information works, GST guide IR375, and the Goods and Services Tax Act 1985. Ads may fund this free site. Not Inland Revenue. Not tax advice.