Business tax obligations.


18th June, 2018

Business tax obligations

Understanding business tax in the time it takes to book an Uber.

While you’re watching the car move closer towards you on your smart phone, you could be moving closer to understanding the tax obligations your business may have.

That’s about two minutes reading time between you and a five-star knowledge rating.

Building a business brings its fair share of surprises and uncertainty. But if there’s one thing that’s always consistent, it’s business taxes.

There are many taxes that businesses may have to pay, but three of the most common are GST, PAYE and company tax.

Goods and Services Tax (GST)

Goods and Services Tax (GST) is applied to most goods and services. In New Zealand, GST is taxed at 15 percent of the price of goods and services.

You must register your business for GST with the Inland Revenue Department (IRD) when your annual turnover exceeds $60,000 in any 12-month period.

A registered person can choose to file returns monthly, two-monthly or six-monthly depending on their turnover.

You can read more about GST for business here.

Pay as you earn (PAYE)

As a small business owner, you need to help employees take care of their tax obligations with PAYE withholding.

PAYE withholding means that employers collect income tax payments from their employees, which they then pass onto the IRD.

PAYE payments are made either on a monthly basis or a payday basis, with an additional payment made at the end of financial year.

You can read more about your PAYE obligations here.

Company tax

Company tax, which is sometimes referred to as corporate tax, is a tax on the profit your business makes.

In New Zealand, companies and corporates are taxed at a flat rate of 28 percent to be paid at the end of the tax year.

Top 3 takeaways

  1. All businesses are required to pay tax to the government.
  2. Company or corporate tax, GST and PAYE are three common business taxes that most businesses will be required to pay.
  3. Check your business tax obligations with the government or an accountant or bookkeeper.


READ NEXT: Business accounting basics