How NZ GST works (the short version)
New Zealand's Goods and Services Tax (GST) is a flat 15% applied to most goods and services. It has been 15% since October 2010, when it rose from 12.5%.
If you're GST-registered (mandatory above $60,000 annual turnover), you charge GST on sales and reclaim GST on business purchases. Your GST return reports the difference and you pay (or receive) that net amount to Inland Revenue (IRD).
Adding vs removing GST
The two operations look symmetric but use different math:
- Adding GST: multiply the GST-exclusive amount by 0.15 to get the GST, or multiply by 1.15 to get the GST-inclusive total directly.
- Removing GST: divide the GST-inclusive amount by 1.15 to get the net (GST-exclusive) amount. The GST portion is the difference. Equivalently, multiply by 0.130435 (which is 1.5/11.5) to extract just the GST.
The most common error is multiplying a GST-inclusive amount by 0.15 to "remove" the GST. That under-extracts. Always divide by 1.15.
When do I need to charge GST?
You must register for GST if your turnover (from taxable activities) exceeds $60,000 NZD over any 12-month period. You can register voluntarily below that threshold. Once registered, you charge 15% GST on most domestic sales.
Common GST-free or zero-rated cases:
- Exports of goods (zero-rated)
- International services supplied outside NZ (zero-rated)
- Residential rent (exempt)
- Financial services to NZ recipients (exempt in many cases)
Cross-border digital services
Since 2016, non-resident suppliers of digital services (Netflix, Spotify, software subscriptions, etc.) must register for and charge NZ GST when supplying to NZ consumers. The threshold for non-resident registration is also $60,000 NZD of NZ-customer revenue over 12 months.
FAQ
Is GST the same as VAT?
Effectively yes — GST is New Zealand's and Australia's version of value-added tax. Same structure, different name.
What's the GST registration threshold?
$60,000 NZD turnover from taxable activities over any 12-month period (either past 12 or projected next 12).
Can I claim GST on business purchases?
Yes, if you're GST-registered and the purchase relates to your taxable activity. Keep tax invoices for purchases over $50 ex-GST.
Do I include GST in displayed prices?
For consumer sales (B2C), prices must be displayed GST-inclusive. For B2B, you can display ex-GST as long as you clearly state "plus GST."
How do I calculate 15% GST on $1,000?
To add GST: $1,000 × 1.15 = $1,150 GST-inclusive. The GST component is $150. To remove GST from $1,150: $1,150 ÷ 1.15 = $1,000 (net). The GST component is $1,150 − $1,000 = $150. Common mistake: do not multiply the GST-inclusive amount by 0.15 to extract GST — that gives $172.50 (wrong). Always divide by 1.15.
What is the GST on services in New Zealand?
Most services supplied in New Zealand attract 15% GST. Exceptions include financial services supplied to NZ persons (exempt in most cases), services that are physically performed outside NZ, and certain exported services. If in doubt, IRD's "does my service have GST?" guide is the authoritative reference.
Do Xero, MYOB, and other accounting apps calculate GST correctly?
Yes — all major NZ accounting packages handle GST automatically. This calculator is useful for quick checks on individual transactions, estimates, invoices you receive from non-GST-registered suppliers, or explaining the math to a client.
How does NZ GST work for SaaS subscriptions sold to NZ customers?
Since 2016, offshore SaaS providers must register for NZ GST and charge 15% to NZ-based consumers. If you're a NZ business purchasing a SaaS subscription with GST included, you can claim that GST as an input tax credit on your next GST return (keep the tax invoice or receipt). For a tool to audit your full SaaS spend including tax considerations, see the SaaS subscription audit calculator.
This is general information, not tax advice. For specific situations consult IRD or a chartered accountant.