Question 1

What does an accountant in Christchurch cost?

Accepted Answer

Accounting fees in Christchurch vary by business size and complexity. Most small businesses pay between $150–$400 per month for ongoing compliance, tax, and advisory support. Eastmure & Associates provides transparent fixed-fee pricing — contact us for a quote tailored to your situation.

Question 2

Do I need an accountant for my small business in New Zealand?

Accepted Answer

Most NZ small business owners benefit significantly from having an accountant. An accountant handles GST returns, income tax, payroll, and annual accounts — and a good one will also help you pay less tax legally, manage cashflow, and make better business decisions throughout the year.

Question 3

What is the difference between a bookkeeper and an accountant in NZ?

Accepted Answer

A bookkeeper records your day-to-day transactions and keeps your accounts up to date. An accountant interprets those numbers, prepares tax returns, provides strategic advice, and helps you structure your business for the best tax outcome. Many NZ businesses use both.

Question 4

How do I find a good accountant for my trades business in NZ?

Accepted Answer

Look for an accountant who specialises in trades businesses and understands the specific challenges — GST on materials and labour, vehicle and tool deductions, subcontractor payments, and cashflow management. Eastmure & Associates works with builders, electricians, plumbers, and other tradespeople throughout New Zealand.

Question 5

Can an accountant help me pay less tax in New Zealand?

Accepted Answer

Yes. A proactive accountant reviews your tax position throughout the year — not just at year end — and identifies legal strategies to reduce your tax bill. This includes timing income and expenses, structuring your business correctly, maximising deductions, and managing provisional tax efficiently.

Question 6

What happens if the IRD audits my business in New Zealand?

Accepted Answer

An IRD audit means the Inland Revenue Department is reviewing your tax returns and financial records. The best protection is accurate records, correctly filed returns, and a tax agent who can respond on your behalf. If you receive an audit notice, contact your accountant immediately — they can liaise with IRD, gather the required documentation, and represent your interests throughout the process.

Question 7

Do I need an accountant as a medical professional in New Zealand?

Accepted Answer

Yes — medical professionals in NZ face unique tax complexity that general accountants often miss. This includes ACC levy classification and review, practice entity structuring, trust distributions, provisional tax on variable income, and the specific rules around locum and contractor arrangements. An accountant who specialises in medical professionals will typically save you significantly more than their fee.

Question 8

How do I plan for succession or selling my business in New Zealand?

Accepted Answer

Succession planning should start at least three to five years before you intend to exit. Key steps include getting a realistic business valuation, structuring the business to maximise sale value, understanding the tax implications of different exit routes, and identifying whether you are selling to a third party, a family member, or a management team. An accountant and business advisor working together can significantly improve your outcome.

Question 9

What can I claim as a home office deduction in New Zealand?

Accepted Answer

If you use part of your home exclusively for business, you can claim a proportion of mortgage interest or rent, rates, insurance, power, and internet. The proportion is calculated based on the floor area used for business relative to the total home. IRD requires the space to be used regularly and exclusively for business — a kitchen table used occasionally does not qualify.

Question 10

Do I need a trust for my business or assets in New Zealand?

Accepted Answer

A family trust can protect assets from business creditors, assist with estate planning, and in some cases provide tax advantages. However, since the trust tax rate increased to 39% in 2024, trusts are less attractive purely for tax reasons. Whether a trust is right for you depends on your personal circumstances, asset base, and long-term goals. Get specific advice before setting one up.

Question 11

What should I look for when buying a business in New Zealand?

Accepted Answer

Before buying a business in NZ, have an accountant review at least three years of financial statements, verify the accuracy of reported revenue and expenses, check for any outstanding IRD liabilities, and assess the true owner's salary versus profit. You should also understand what you are buying — assets or shares — as this has significant tax and liability implications.

Question 12

How do I reduce costs in my small business in New Zealand?

Accepted Answer

Start with a line-by-line review of your expenses — subscriptions, insurance, supplier contracts, and staffing costs are the most common areas where businesses overpay. Compare supplier pricing annually, review software subscriptions for overlap, and check whether your insurance premiums reflect your current risk profile. A business advisor can benchmark your cost structure against similar businesses and identify where the biggest savings are.

Question 13

Should I pay myself a salary or dividends from my company in New Zealand?

Accepted Answer

Most NZ company owners use a combination of salary and dividends. A salary reduces company profit and is subject to PAYE, while dividends are paid from after-tax profit and carry imputation credits. The right mix depends on your personal tax rate, KiwiSaver obligations, ACC levies, and the company's cash position. Your accountant should review this annually as your income and tax position change.

Question 14

What business expenses can I claim in New Zealand?

Accepted Answer

You can claim any expense incurred in earning your business income. Common deductions include vehicle costs (logbook or mileage rate), home office, equipment and tools, professional fees, insurance, subscriptions, training, and travel. Mixed-use expenses — where something is used for both business and personal purposes — must be apportioned. Keep receipts for everything and reconcile your accounts regularly.

Question 15

How does GST work for small businesses in New Zealand?

Accepted Answer

GST is a 15% tax on most goods and services in NZ. Once your turnover exceeds $60,000 in a 12-month period, you must register for GST. You collect GST on your sales and claim it back on your business purchases. The difference is paid to or refunded by IRD, usually every two months. Keeping accurate records and filing on time is essential — late filing penalties and use-of-money interest add up quickly.

Question 16

What is the difference between a sole trader and a company in New Zealand?

Accepted Answer

A sole trader is the simplest structure — you and the business are the same legal entity, and you pay personal income tax on profits. A company is a separate legal entity, taxed at 28%, which can offer liability protection and more flexibility in how you pay yourself. Most businesses benefit from incorporating once they reach a certain level of profitability, but the right time depends on your income, risk profile, and growth plans.

Question 17

How do I manage cashflow in my small business in New Zealand?

Accepted Answer

Good cashflow management starts with knowing your numbers — when money comes in, when it goes out, and what your minimum cash balance needs to be. Practical steps include invoicing promptly, setting clear payment terms, building a cash reserve for tax payments, and maintaining a rolling 13-week cashflow forecast. Many NZ businesses are profitable on paper but struggle with cash — an accountant can help you identify the gap and fix it.

Question 18

When should I switch accountants in New Zealand?

Accepted Answer

Consider switching if your accountant only contacts you at year end, never proactively flags tax-saving opportunities, takes weeks to return calls, or you feel like just another file number. A good accountant should know your business, reach out before key deadlines, and give you advice that makes a measurable difference. Switching is straightforward — your new accountant handles the transfer of records from your previous one.

Question 19

What records do I need to keep for tax in New Zealand?

Accepted Answer

IRD requires you to keep business records for at least seven years. This includes invoices, receipts, bank statements, payroll records, GST returns, and any contracts or agreements. Digital records are acceptable — most NZ businesses use Xero or similar software to store and organise records automatically. Good record-keeping also makes your annual accounts faster and cheaper to prepare.

Question 20

How does PAYE work in New Zealand?

Accepted Answer

PAYE (Pay As You Earn) is the system NZ employers use to deduct income tax and other deductions from employee wages before paying them. As an employer, you calculate the correct PAYE amount based on each employee's tax code and earnings, deduct it from their pay, and pay it to IRD — usually twice a month. You also deduct KiwiSaver contributions and, if applicable, student loan repayments. Errors in PAYE can result in penalties, so most small businesses use payroll software or an accountant to manage it.

Question 21

What are the income tax rates in New Zealand for 2025–2026?

Accepted Answer

For the 2025–2026 tax year, NZ personal income tax rates are: 10.5% on income up to $15,600; 17.5% on $15,601–$53,500; 30% on $53,501–$78,100; 33% on $78,101–$180,000; and 39% on income over $180,000. These rates apply to individuals, including sole traders. Companies pay a flat rate of 28%. Trusts pay 39% on retained income. Your effective tax rate — the average across your total income — will be lower than the top rate you fall into.

Question 22

What tax code should I use in New Zealand?

Accepted Answer

Your tax code tells your employer how much PAYE to deduct. The most common codes are: M (main job, no student loan), M SL (main job with student loan), S (secondary job), and SB (secondary job, low income). If you have multiple jobs, only one can be your main job — the others must use a secondary tax code. Using the wrong code means you may underpay tax and face a bill at year end, or overpay and wait for a refund. If you are unsure, use the IRD tax code finder at ird.govt.nz.

Question 23

What is the company tax rate in New Zealand?

Accepted Answer

Companies in New Zealand pay income tax at a flat rate of 28% on their net profit. This is lower than the top personal income tax rate of 39%, which is one reason many business owners incorporate once their income reaches a certain level. Company profits distributed to shareholders as dividends carry imputation credits — tax already paid at the company level — which reduces the shareholder's personal tax liability on those dividends.

Question 24

How do I register as an employer for PAYE in New Zealand?

Accepted Answer

To register as an employer in NZ, you need an IRD number for your business and must register with IRD before your first employee starts. You can register online through myIR. Once registered, you must file employment information (EI) each payday and pay PAYE to IRD by the 20th of the following month (or twice monthly if your PAYE is over $500,000 per year). You will also need to enrol eligible employees in KiwiSaver. Most small businesses use payroll software like Xero Payroll or PayHero to manage this automatically.

Question 25

What happens if I miss an IRD deadline in New Zealand?

Accepted Answer

Missing an IRD deadline can result in late filing penalties, late payment penalties, and use-of-money interest on any tax owed. Penalties start at $50 for small amounts and increase based on the tax type and how late the filing is. If you know you are going to miss a deadline, contact IRD or your tax agent before the due date — IRD will often work with you if you communicate proactively. A tax agent extension can also give you more time to file your annual return.

Question 26

How do I get a tax refund in New Zealand?

Accepted Answer

If you have overpaid tax during the year — through PAYE, provisional tax, or withholding tax — IRD will issue a refund after your tax return is assessed. For employees, IRD automatically calculates this at year end through the auto-assessment process. For business owners and self-employed people, your accountant files your income tax return and any refund is processed once IRD assesses it. Refunds are paid directly to your bank account registered with IRD.

Question 27

Can I claim my vehicle as a business expense in New Zealand?

Accepted Answer

Yes, but the rules depend on how the vehicle is used. If you use a vehicle for both business and personal purposes, you must keep a logbook for 90 days to establish the business-use percentage, then claim that proportion of running costs. Alternatively, you can use the IRD mileage rate (currently 73 cents per kilometre for the first 14,000km). If the vehicle is used exclusively for business, you can claim 100% of costs. Vehicles owned by a company and made available to employees or shareholders may trigger fringe benefit tax (FBT).

Question 28

What is fringe benefit tax (FBT) in New Zealand?

Accepted Answer

Fringe benefit tax (FBT) applies when an employer provides non-cash benefits to employees or shareholder-employees — most commonly a company vehicle available for private use. FBT is paid by the employer, not the employee, and is filed quarterly or annually. The tax can be significant, particularly for vehicles with high cost prices. Many small business owners are unaware they have an FBT liability until an IRD audit — if your company owns a vehicle, get advice on whether FBT applies.

Question 29

How does depreciation work for small businesses in New Zealand?

Accepted Answer

Depreciation allows you to claim the cost of business assets — equipment, vehicles, computers, fit-out — over their useful life rather than all at once. IRD sets depreciation rates for different asset types. Assets costing $1,000 or less can generally be written off immediately as a low-value asset. Buildings depreciation was removed in 2011, though some commercial fit-out may still qualify. Getting depreciation right reduces your taxable income each year and avoids a large tax bill when you sell an asset.

Question 30

What is a shareholder loan in New Zealand and what are the tax implications?

Accepted Answer

A shareholder loan arises when a company pays money to a shareholder that is not recorded as salary or a dividend — for example, personal expenses paid through the company account. If the loan is not repaid or converted to salary or dividend by the end of the tax year, IRD may treat it as a deemed dividend, triggering income tax. Shareholder current accounts need careful management — your accountant should review the balance at year end and advise on the best way to clear it.

Question 31

How does KiwiSaver work for self-employed people in New Zealand?

Accepted Answer

Self-employed people can join KiwiSaver voluntarily and contribute any amount directly to their provider. Unlike employees, there is no employer contribution — but you still receive the government member tax credit of up to $521 per year if you contribute at least $1,042. Contributions are not tax-deductible for self-employed people. If you later employ staff, you must enrol eligible employees and make employer contributions of at least 3% of their gross wages.

Question 32

What are ACC levies and how are they calculated in New Zealand?

Accepted Answer

ACC levies fund New Zealand's accident compensation scheme. Self-employed people and business owners pay a work levy based on their industry classification and liable earnings, plus a working safer levy. Employees pay an earner levy deducted through PAYE. Many business owners are classified in the wrong ACC industry category and overpay as a result — a review can result in significant savings, particularly for medical professionals, consultants, and office-based businesses.

Question 33

Do I need to register for GST in New Zealand?

Accepted Answer

You must register for GST if your turnover exceeds $60,000 in any 12-month period. You can also register voluntarily below this threshold, which allows you to claim GST back on business purchases — useful if you have significant expenses. Once registered, you charge 15% GST on your sales, claim it back on purchases, and file GST returns with IRD — usually every two months. Failing to register when required can result in penalties and back-dated GST liability.

Question 34

What is the bright-line test in New Zealand and does it apply to me?

Accepted Answer

The bright-line test taxes gains on residential property sold within a set period of purchase. From July 2024, the bright-line period returned to two years for most properties. If you sell a residential property within two years of buying it, the gain is taxable as income — unless it is your main home. Investment properties, holiday homes, and rental properties are all potentially caught. The rules are complex and exceptions apply, so get advice before selling any property.

Question 35

How do I set up a company in New Zealand?

Accepted Answer

Registering a company in NZ is done through the Companies Office at companiesoffice.govt.nz. You will need a company name, at least one director (who must be a NZ or Australian resident), a registered office address, and shareholder details. Registration costs $10.22 online. Once registered, you need an IRD number for the company, a separate bank account, and to register for GST if applicable. Before incorporating, get advice on the right structure — the decision affects your tax, liability, and how you pay yourself.

Question 36

What is the difference between turnover and profit in New Zealand?

Accepted Answer

Turnover (or revenue) is the total amount your business earns from sales before any costs are deducted. Profit is what is left after all expenses — cost of goods sold, wages, rent, and overheads — are subtracted. Many NZ business owners focus on turnover but it is profit that determines your tax bill and the actual value of your business. A business with high turnover but thin margins can be less valuable and more stressful than a smaller business with strong profit.

Question 37

How do I pay an IRD debt I cannot afford in New Zealand?

Accepted Answer

If you owe tax you cannot pay in full, contact IRD as soon as possible — before the due date if you can. IRD offers instalment arrangements that allow you to pay the debt over time. Interest continues to accrue on unpaid amounts, but penalties for late payment can be reduced if you engage proactively. A tax agent can negotiate on your behalf and help you avoid enforcement action such as debt collection or legal proceedings. Ignoring an IRD debt makes it significantly worse.

Question 38

What is a look-through company (LTC) in New Zealand?

Accepted Answer

A look-through company (LTC) is a special company structure where the income, expenses, and losses flow through to the shareholders personally, rather than being taxed at the company level. This can be useful for property investors who want to offset rental losses against other income. However, LTC rules are complex and the benefits depend on your personal tax rate and overall income. Since the loss limitation rules were tightened, LTCs are less commonly used — get specific advice before choosing this structure.

Question 39

How do I know if my business is profitable in New Zealand?

Accepted Answer

Your business is profitable if revenue consistently exceeds all costs — including your own salary at market rate. Many NZ business owners underestimate their true costs or pay themselves below market, which masks an unprofitable business. Key indicators to review monthly include gross profit margin, net profit margin, and whether the business generates enough cash to cover tax, loan repayments, and owner drawings. If your revenue is growing but you are always short of cash, the problem is usually margins, pricing, or cost structure — not turnover.

Question 40

What is provisional tax and when do I have to pay it in New Zealand?

Accepted Answer

Provisional tax is how self-employed people and businesses pay income tax throughout the year, rather than in one lump sum at year end. It is based on your previous year's residual income tax (RIT) plus 5%, and is paid in three instalments — typically August, January, and May. If your RIT exceeds $5,000, you must pay provisional tax. Getting the estimate wrong can result in use-of-money interest. The AIM (Accounting Income Method) option, available through Xero, lets you pay based on actual profit each period instead.

Question 41

What accounting software should I use for my NZ small business?

Accepted Answer

Xero is the most widely used accounting software in New Zealand and integrates directly with IRD for GST filing and payroll. It is cloud-based, works well for most small businesses, and most NZ accountants are familiar with it. MYOB is an alternative with a longer history in NZ. For very small businesses or sole traders, simpler tools like Hnry (for contractors) or even a well-maintained spreadsheet can work. The right choice depends on your transaction volume, whether you have employees, and what your accountant recommends.

Question 42

How do I claim tax deductions for rental property in New Zealand?

Accepted Answer

Rental property owners can claim deductions for expenses incurred in earning rental income — rates, insurance, property management fees, repairs and maintenance, and accounting fees. Mortgage interest deductibility was phased back in from April 2024 and is now fully deductible for residential rental properties. You cannot claim capital improvements as an immediate deduction — these must be depreciated. Keep all receipts and reconcile your rental income and expenses annually with your accountant.

Question 43

What is an employee versus a contractor in New Zealand for tax purposes?

Accepted Answer

The distinction matters significantly for tax. An employee has PAYE deducted by the employer, receives KiwiSaver contributions, and is entitled to employment entitlements like annual leave. A contractor is self-employed, invoices for their work, and is responsible for their own tax, GST, and ACC. IRD uses a multi-factor test to determine the true nature of the relationship — the label on the contract is not decisive. Misclassifying an employee as a contractor can result in back-dated PAYE, penalties, and employment claims.

Question 44

How do I prepare for the end of the New Zealand tax year in March?

Accepted Answer

The NZ tax year ends on 31 March. In the weeks before year end, review your debtors and write off any genuinely bad debts, consider bringing forward deductible expenses, review your asset register for any items to write off, check your provisional tax position, and ensure your accounts are reconciled. If you are close to the GST registration threshold, consider timing. Your accountant should be in touch before year end — if they are not, that is a sign you may benefit from a more proactive relationship.

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How Much Does an Accountant Cost in Christchurch?

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