Verified for 2026 Tax Year

GST on Director’s Fees & Honoraria

Q: What if my director's fees are under $60,000?

If your only taxable activity is being a director and your total fees are under $60,000, you are not required to register for or charge GST.

A definitive guide for board members. Learn exactly when you must charge GST on your fees, and the distinct rules governing honoraria payments.

A common point of confusion for professional directors in New Zealand is whether they should charge GST on the fees they receive for board services. The answer is not a simple yes or no—it depends heavily on your total business activity and the legal structure under which you hold your directorship.

The Employment Rule

If you are a standard employee of the company, your salary is NOT subject to GST. However, independent directors providing external governance services to a board are generally considered to be "in business" for tax purposes.

When must a Director charge GST?

You must issue a tax invoice and charge 15% GST on your director's fees if you meet ANY of the following criteria:

✓
You are already GST-registered for another business activity (e.g., you run an independent consulting firm).
✓
Your total income from all independent taxable activities combined (including your director's fees) exceeds $60,000 per year.
✓
You are providing your governance services explicitly through your own registered limited company, rather than as an individual.

Check With The Company

If you charge GST on your fees, the company usually pays you the fee "plus GST". You must ensure the company knows you are GST registered so they don't incorrectly deduct Withholding Tax (WT) as if you were an unregistered contractor. You then account for this GST in your own personal/company return.

What about Honoraria?

Honoraria are small payments for services where no fixed price is formally set, which is very common in non-profit bodies, charities, and community trusts.

Under the GST Act, honoraria are generally treated the exact same way as director's fees. If the recipient is already GST-registered for their other taxable activities, they must legally charge GST on the honorarium payment.

Director vs Consultant?

It is very common for board members to do extra work for the company beyond standard board meetings.

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Board Attendance

Governing the company, voting on resolutions, attending AGMs.

Taxed as Director's Fees

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Project Consulting

Providing specialized marketing, legal, or IT advice to management.

Taxable Business Services (Requires GST)

Frequently Asked Questions

Are director's fees subject to GST in NZ?

Yes, if the director is GST-registered or their total taxable turnover exceeds $60,000, they must charge 15% GST on their fees.

Can I be an employee director and avoid GST?

If you are a 'bona fide' employee with a contract of service, your earnings are salary/wages and not subject to GST. Most independent board members are not considered employees.

What if my director's fees are under $60,000?

If your only taxable activity is being a director and your fees are under $60,000, you are not required to register for or charge GST.

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