NZ Sole Trader Financial Reporting Guide

A practical guide to what you need to file, how to use myIR, what records to keep, and how to prepare for tax time - without the jargon.

The tax year

New Zealand's tax year: 1 April - 31 March, drawn to scaleReal IRD dates, not evenly spaced
  1. 1 April

    New tax year starts

    Start fresh income and expense tracking for the year ahead.

  2. 7 May

    Provisional tax - 3rd instalment

    Standard 31 March balance date. Also the GST due date for 6-monthly filers whose period ends 31 March.

  3. 7 July

    IR3 filing deadline

    Your annual income tax return is due. Often extended if you use a tax agent.

  4. 28 August

    Provisional tax - 1st instalment

    Standard 31 March balance date.

  5. 28 October

    GST due - 6-monthly filers

    For 6-monthly GST filers whose other period ends 30 September.

  6. 15 January

    Provisional tax - 2nd instalment

    Standard 31 March balance date.

  7. 7 February

    End-of-year tax payment

    Terminal tax - the final balance of income tax owing - is generally due.

  8. 31 March

    Tax year ends

    A good time to reconcile income, expenses, and GST before filing.

Most sole traders file GST two-monthly (the default) or monthly, and pay by the 28th of the month after each period closes - a date that recurs every one or two months, so it has no single fixed position to draw here. Two exceptions carry through every filing frequency: a period ending 31 March is due 7 May, not 28 April, and a period ending 30 November is due 15 January, not 28 December.

Dates above are the standard 31 March balance date. Always confirm your specific due dates in myIR or with a registered tax agent.

Who this guide is for

This guide covers reporting obligations - not tax rates or deductions. For tax rates and what you can claim, see the Sole trader tax guide.

You're self-employed and filing your own taxes

You want to know what to file and when

You're not sure whether to use myIR or the Companies Office

You want to know what records you actually need to keep

Tax time is coming and you want to prepare

You're wondering whether to stay sole trader or go company

The 4 jobs to stay on top of

As a sole trader, your financial reporting comes down to four ongoing jobs.

Track your income

Record every payment you receive - invoice by invoice. Your taxable income is everything earned from your business, less legitimate business expenses. Good records throughout the year mean no scramble at tax time.

Track GST (if registered)

If your turnover reaches $60,000 in the last twelve months, or you expect it to in the next twelve, GST registration is compulsory. Once registered, you collect 15% GST from clients and file regular GST returns through myIR. Keep every tax invoice received.

Keep records

The IRD requires business records for at least 7 years. That includes income records, expense receipts, bank statements, contracts, and tax invoices. Good record habits make everything else easier.

Prepare for filing

Each year you file an IR3 income tax return. If you have provisional tax obligations, you make payments through the year too. Reviewing your income summary before the end of the tax year prevents surprises.

myIR vs Companies Office

These two portals serve very different purposes. Sole traders mainly deal with myIR - not the Companies Office.

myIR (IRD)

myir.ird.govt.nz

This is your main portal as a sole trader. Use it for:

  • Filing your annual IR3 income tax return
  • Filing GST returns (if registered)
  • Checking what tax is owed or refunded
  • Setting up and paying provisional tax
  • Updating your contact details and bank account
  • Viewing IRD correspondence and notices
Sole traders use myIR for all tax matters.

Companies Office

companiesoffice.govt.nz

This is for limited liability companies only - not sole traders. Use it only if you:

  • Register a limited liability company
  • File annual company returns
  • Update company directors or shareholders
  • Register a business name as a company
As a sole trader, you generally don't need the Companies Office. See the sole trader vs company comparison below if you're considering incorporating.

What records to keep

The IRD requires 7 years of business records. Here's what that means in practice.

Income records

  • Invoices you sent to clients
  • Receipts of payment received
  • Bank statements showing income deposits
  • Contracts for work done

Expense records

  • Receipts and invoices for business purchases
  • Tax invoices for GST claims (must show GST number)
  • Vehicle logbook (if claiming vehicle use)
  • Home office calculation records

Bank & financial records

  • Business bank account statements
  • Loan documents if business-related
  • Credit card statements for business expenses
  • Records of any asset purchases

GST records (if registered)

  • All tax invoices received and issued
  • GST return copies
  • Records of GST adjustments or corrections
  • Copies of any IRD correspondence
7-year rule
Records must be kept for at least 7 years from the end of the tax year they relate to. Digital records are accepted. A failed IRD audit due to missing records can result in penalties.

Reports to review before tax time

Before you file your IR3, review these summaries to make sure your figures are accurate and complete.

Income summary

Total revenue received during the tax year. Cross-check this against your invoices and bank deposits. Any discrepancies need to be resolved before filing.

GST summary

If GST registered, reconcile total GST collected on sales against total GST credits claimed on expenses. Invio's export formats make this straightforward.

Expense summary

Total deductible business expenses for the year. Group by category so your accountant or IR3 filing is straightforward.

Owner Money Reports (free)

Invio's Money tab shows earned vs received vs owed by period (month, quarter, or financial year), a who-owes-you list sorted by most overdue, your top 5 clients by money received, a 6-month received trend with month-on-month change, and a GST set-aside estimate for GST-registered businesses. Free on every plan - no export needed to see where you stand.

Export your data before seeing an accountant

Invio lets you export invoice data as CSV, Xero-compatible, or MYOB-compatible files covering the full financial year. Export from Reports in your Invio account, then hand it to your accountant or use it to complete your own IR3.

Sole trader vs company

When does it make sense to incorporate? Here's a practical NZ comparison.

Stay as a sole trader if…

  • You're earning under ~$70,000/year in profit
  • You work mostly for a small number of clients
  • You want minimum compliance overhead
  • You're just starting out and testing demand
  • Your personal liability exposure is low
Simple, cheap, and fast to maintain. Most NZ freelancers and tradespeople stay sole trader for years.

Consider a company if…

  • Profit consistently over $70,000-$100,000
  • You want limited liability protection
  • You're bringing in business partners or investors
  • Clients require you to invoice as a company
  • You want more flexibility to retain earnings at the company tax rate (28%)
Cost to consider: Annual Companies Office filing fee ($46), higher ongoing accounting costs, and more compliance obligations.

Tax rates: Sole traders pay personal income tax rates on all profit. Companies pay 28% on retained earnings, but you still pay personal tax on any salary or dividends drawn. For the actual tax rate tables, see our Sole trader tax guide.

ACC levies for sole traders

ACC is New Zealand's accident compensation scheme. As a sole trader, you're both the employer and the employee.

How ACC levies work

ACC invoices you based on your income declared to the IRD. Sole traders pay two levies:

  • Earners' levy - Based on your income; covers personal injuries
  • Working cover levy - Rate depends on your work type or industry classification

Practical points

  • ACC invoices arrive after the IRD processes your tax return
  • You can pay in instalments - contact ACC if cash flow is tight
  • Cover can be increased voluntarily for more income replacement
  • CoverPlus Extra lets you set a fixed agreed income level
  • ACC invoices can include different levy components. If you're unsure how they should be treated for tax purposes, check the breakdown on your invoice or confirm with your accountant.

Common reporting mistakes

Not setting aside tax through the year

A common rule of thumb: set aside 25-30% of every payment received. This covers income tax and ACC.

Mixing personal and business bank accounts

A separate business account makes income and expense tracking far simpler. It's not legally required, but makes every report and audit cleaner.

Losing receipts for expense claims

Photograph receipts the same day. Most apps can export PDFs for IRD purposes. You need these for at least 7 years.

Missing GST registration at $60,000

Once your earnings reach $60,000 in the last twelve months - or you expect to in the next twelve - you must register. Missing this brings back-tax obligations and penalties.

Using the wrong GST calculation

To remove GST from a total, multiply by 3 and divide by 23 - not by 15%. Use the GST calculator to get it right.

Filing an IR3 without reconciling invoices

Before filing, cross-check your total invoiced income against bank deposits. Unexplained gaps can trigger IRD queries.

Need to check GST on an amount? Use the free GST calculator

Common Questions

What does a sole trader need to file with the IRD?
An annual IR3 income tax return, filed through myIR. If you're GST registered, you also file regular GST returns. Provisional tax applies if you owe more than $5,000 residual income tax.
What is myIR and how do I use it?
myIR is the IRD's online portal at myir.ird.govt.nz. Log in to file returns, check what's owed, make payments, and view correspondence. Most sole traders only need it a few times a year.
How long do I need to keep business records?
At least 7 years from the end of the tax year the records relate to. The IRD can audit past years at any time within that window.
Do I need to use an accountant?
No - sole traders can file their own IR3 via myIR. That said, most NZ sole traders benefit from at least an annual review with a tax agent, especially once income grows or expenses become complex.
What is provisional tax?
Provisional tax is an advance payment of income tax paid through the year rather than all at once after filing. It applies if your previous year's residual income tax was over $5,000.
How do I invoice correctly while running my business?
Invoicing correctly as a sole trader is covered step-by-step in our How to Invoice as a Sole Trader guide.
Should I operate as a sole trader or company in NZ?
Sole trader suits most small freelancers and contractors - simple to set up and income taxed at personal rates. A company offers limited liability and flexibility but costs more to maintain. Most NZ sole traders only consider switching when consistently earning over $70,000-$100,000.
Why does 7 May appear so early on the tax year calendar above?
Because it really does fall that early on the calendar. The tax year runs 1 April to 31 March, and 7 May is barely five weeks after 1 April - it just happens to be a deadline for the year that JUST closed on the 31 March before it, not the year that's beginning. The same is true of 7 July. Both are drawn at their true calendar position, not grouped with the deadlines for the year in progress.

Stop tracking manually use Invio

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