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 spaced1 April
New tax year starts
Start fresh income and expense tracking for the year ahead.
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.
7 July
IR3 filing deadline
Your annual income tax return is due. Often extended if you use a tax agent.
28 August
Provisional tax - 1st instalment
Standard 31 March balance date.
28 October
GST due - 6-monthly filers
For 6-monthly GST filers whose other period ends 30 September.
15 January
Provisional tax - 2nd instalment
Standard 31 March balance date.
7 February
End-of-year tax payment
Terminal tax - the final balance of income tax owing - is generally due.
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
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
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
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
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%)
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