InvioWho 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
Looking for tax rates and deductions? See the Sole Trader Tax Guide →
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 exceeds $60,000 in any 12-month period, 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.
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.
NZ Tax Calendar: When to Check What
New Zealand's tax year runs 1 April to 31 March. Key dates to know:
1 April
New Tax Year Starts
The NZ tax year begins. Start fresh income and expense tracking for the new financial year.
GST due dates
GST Returns (if registered)
1-monthly: 28th of the following month. 2-monthly: 28th after the end of each period. 6-monthly: 28 April and 28 October. Check your return period in myIR.
28 Aug, 28 Jan, 7 May
Provisional Tax Payments
If your previous year's residual income tax (RIT) was over $5,000, you pay provisional tax in instalments. Check myIR for your exact method and dates.
31 March
Tax Year Ends
The tax year closes. A good time to reconcile income, expenses, and GST before filing.
7 July
IR3 Filing Deadline
Your annual income tax return (IR3) is due. If you use a tax agent, this deadline is often extended — confirm with your accountant.
7 February
End-of-Year Tax Payment
Any terminal tax (final balance of income tax owing) is generally due. Check myIR for your specific amount.
Note: Dates above are approximate. Always confirm your specific due dates in myIR or with a registered tax agent.
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 when crossing $60k
Once your earnings exceed $60,000 in any 12-month period 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.