Do I need to register for GST?

GST is a decision every new NZ contractor faces early. The rules make registration compulsory above a turnover line, and leave it as your choice below that line. This guide covers when registration stops being a choice, how to think about the voluntary case, what changes once you're registered, and how to leave if your situation changes.

When registration is compulsory

Two triggers make registration mandatory:

• The $60,000 threshold. Your turnover passed $60,000 in the last 12 months, or you expect it to in the next 12. Note the forward-looking part: if you sign a $70,000 contract in month one, you must register then, not after the money arrives.
• You put GST in your prices. If you add GST to what you charge, you must register regardless of turnover. You can't collect the tax unless you're registered to pass it on.

The threshold is turnover (total sales before any expenses), not profit. A contractor billing $65,000 with $20,000 of costs is over the line.

Registering voluntarily below $60,000

Below the threshold it's your call, and the trade-off depends mostly on who your customers are.

• Your clients are GST-registered businesses. Adding GST costs them nothing real (they claim it back), and registration lets you claim the GST on your own purchases, such as a laptop, software, or an accountant. For most business-to-business contractors, registering early lets you recover the GST on expenses, in exchange for the admin of filing.
• Your clients are private individuals. Adding 15% makes you more expensive to people who can't claim it back, so registration either cuts your margin or raises your price. The case for waiting is stronger here.
• Either way, it's a commitment. Registration means returns on a schedule, every period, even quiet ones.

One more thing to consider: if you're confident you'll cross $60,000 anyway, registering from day one avoids a mid-year switch where your invoicing, pricing, and records all change partway through.

What changes once you're registered

Three things, all permanent while registration lasts:

• Your invoices add 15%. A $1,000 job is invoiced at $1,150, and that $150 is GST you're collecting for Inland Revenue. Your invoices also need to meet the taxable supply information requirements, which means showing your GST number and the GST amount.
• You file returns. Two-monthly is the default. Under $500,000 turnover you can choose six-monthly (fewer returns, but each covers more money); over $24 million, monthly is compulsory (not a contractor problem). Returns and payment are due on the 28th of the month after the period ends, except the 31 March period (due 7 May) and the 30 November period (due 15 January). The full dates are in the tax calendar.
• You claim GST back on business purchases. Each return nets what you collected against what you paid, and you pass on (or occasionally receive) the difference.

Cancelling your registration

If your expected turnover drops under $60,000 (winding down, going part-time, taking a permanent role), you can cancel your registration. It's optional, not automatic. There are two things to know: you can't cancel while GST is still in your prices, and cancelling means a final return covering the period up to the cancellation date. Your GST records still need to be kept for seven years afterwards.

How Coffer helps

Once you're registered, Coffer handles the day-to-day. You turn GST on or off per invoice, and the 15% is worked out and shown properly on the PDF. The GST portion of every paid invoice is ringfenced on your dashboard, so it never looks like money you can spend. Your filing cycle drives the due-date countdown, and when you file, the return amount is the number Coffer has been adding up all period.