Goods and Services Tax (GST) in New Zealand is a value-added tax charged on most goods and services sold or consumed in the country.
Introduced in 1986 and still going strong in 2025, the GST rate in NZ 2025 is 15%, making it a simple and transparent system compared to many other countries.
The GST is collected by businesses on behalf of the government and remitted to the Inland Revenue Department (IRD).
Whether you run a small business or simply buy groceries, understanding how GST works in New Zealand helps you stay financially informed and avoid errors in pricing and filing.
At its core, GST adds 15% to the price of goods and services. When a business sells an item for $100 exclusive of GST, it must add $15 tax, making the final price $115. If the price is advertised as GST inclusive,
you can easily find the base price by dividing by 1.15. For instance, if a laptop costs $1,150 including GST, the GST-exclusive price is $1,000 and the GST portion is $150.
That’s how you calculate GST manually in NZ — divide by 1.15 to find the exclusive price or multiply by 0.15 to find the GST amount.
The concept of GST inclusive vs exclusive price in NZ is crucial because business-to-business transactions often quote exclusive prices while consumer prices usually include GST.
The GST registration threshold in NZ is $60,000 in any 12-month period. Businesses earning above this must register with the IRD for a GST number and start charging tax on sales.
Smaller businesses below the threshold may still register voluntarily to claim GST credits on expenses. Registration is simple through the IRD GST registration portal available via myIR.
Once registered, you’ll need to maintain accurate records and issue invoices that show your GST number, the amount of GST charged, and a clear statement that the price includes GST.
The New Zealand system allows for GST return filing online through myIR, where you summarize your sales (output tax) and expenses (input tax).
If your output tax exceeds input tax, you pay the difference to IRD; if input tax is greater, you get a GST refund in NZ. Returns are filed every two months or six months, depending on your turnover.
Many small businesses use accounting software like Xero or MYOB to automatically calculate GST and prepare returns before the GST filing due dates in NZ. Late filing or underpayment can lead to penalties, so timely submission is important.
Let’s take a real example. A small graphic design studio earns $46,000 (including GST) over two months and spends $10,000 on software and supplies (including GST).
First, calculate GST on sales: $46,000 ÷ 1.15 = $40,000 base, so GST collected = $6,000. GST on expenses is $10,000 ÷ 1.15 = $8,695 base, so GST paid = $1,305.
The business owes IRD the difference — $6,000 − $1,305 = $4,695 GST payable. This illustrates the core of the business GST system in New Zealand — you act as a collector but can offset your input tax.
Some transactions are zero-rated or exempt. Zero-rated supplies in NZ include exports, international services, and certain land sales where GST is charged at 0%.
This lets the business claim input tax credits without charging GST to the buyer. Exempt supplies in NZ, on the other hand, don’t include GST and don’t allow credit claims — examples are residential rent and financial transactions like bank loans or interest.
Knowing whether a product is taxable, zero-rated, or exempt is crucial for accurate return filing.
The IRD encourages electronic filing and payment to keep the system efficient. You can log in to myIR to submit returns, make payments, and check historical records. For large purchases or exports, GST refunds in NZ help businesses recover input tax and maintain cash flow.
Exporters especially benefit since they charge 0% GST on overseas sales but still claim credits on local costs. This system keeps the economy competitive and prevents double taxation.
From a consumer point of view, most prices in retail stores already include GST. If a tag shows $115, you’re paying $100 for the product and $15 for GST.
However, if a supplier quotes $115 + GST, then the final price will be $132.25. To avoid confusion, always check whether prices are inclusive or exclusive of tax.
You can use the GST Calculator NZ tool to quickly convert between inclusive and exclusive amounts and verify your invoice details.
GST plays a vital role in funding public services and infrastructure in New Zealand. It is a broad-based, transparent system that ensures everyone contributes a fair share through spending.
By keeping the rate steady and process simple, New Zealand maintains one of the world’s most efficient indirect tax models.
For official rules, visit the Inland Revenue Department’s GST page to learn about registration, rates, and filing guidelines for 2025.