Agency and consultancy expenses in New Zealand: the complete guide

A New Zealand agency’s costs are mostly people and software. For people, the question is whether tax comes out at source: some freelance work is a listed schedular activity with withholding, and the rest can be by agreement. For software, overseas suppliers should not charge GST to a registered business that gives them its GST number, and most agencies have nothing to self-assess. Then entertainment, which New Zealand treats more generously than its neighbours: half of a client lunch is deductible. This guide walks through the whole ledger with a verdict before the detail. Every figure is sourced to Inland Revenue in the Sources section, retrieved 10 October 2026.

What this guide covers: freelancers and schedular payments, offshore software and GST, entertainment at 50%, the home office, equipment and depreciation, staff and KiwiSaver, and the GST, provisional tax and records that tie it together.

The agency’s ledger at a glance

The rest of this guide walks through each row, and every section opens with its verdict.

Where ExpenseFlow fits

An agency’s purchase ledger is freelancer invoices, monthly SaaS receipts in US dollars, ad platform statements, travel and the odd client lunch. ExpenseFlow captures each document (email forward, upload or phone), reads the line items, currency and GST, codes each line with a written reason, and routes anything uncertain to a person before it posts. Its agency checks come from the rules on this page: a line that reads as a contractor, freelancer, consultancy or day-rate payment is flagged to check whether it is a schedular payment needing an IR330C and withholding before you pay in full, and a software, subscription or hosting line from an overseas supplier is flagged for the reverse charge question rather than a GST claim from the invoice. After approval the bill syncs to Xero with the source document attached, or to QuickBooks Online as a coded bill.

What it does not do: it never withholds schedular tax, never files an employment information return and never computes a reverse charge. The agency chart of accounts for Xero and for QuickBooks line up with the categories below.

The ExpenseFlow for agencies and consultancies page covers these checks across all five countries.

Freelancers and schedular payments

Schedular payments are payments to contractors for activities listed in Schedule 4 of the Income Tax Act 2007; the IR330C lists the activities and the rate the contractor chooses ^{[1] [2]} . The standard rates relevant to agencies are ^[2] :

• freelance contributions to newspapers and journals (articles, photographs, cartoons) or to radio, television or stage productions: 25%;
• modelling: 20%;
• television, video or film on-set and off-set production by New Zealand residents: 20%;
• payments by a labour hire business to a person working directly for its client: 20%;
• voluntary schedular payments, where you and the contractor agree: 20%;
• a non-resident contractor not otherwise listed: 15%.

If the contractor hasn’t given you an IR330C, the non-notified rate is 45% ^[2] . A web developer or brand strategist who doesn’t fall under a listed activity is paid gross, and pays their own tax and provisional tax. The freelancer’s GST is claimable only if they are registered, which is required once turnover passes $60,000 ^[3] .

Offshore software and GST

An overseas supplier of remote services doesn’t need to register for GST if it only supplies GST-registered New Zealand businesses for business use, and it treats a customer as unregistered unless the customer says otherwise or gives a GST number or NZBN ^[4] . So enter your GST number in each tool’s billing settings; a supplier that charged 15% because you didn’t is charging consumer GST, which you ask to have reversed. The section 8(4B) reverse charge, under which a registered recipient self-accounts for GST on imported services, applies only to businesses that fall below a 95% threshold of taxable use, typically those with financial services or other exempt income ^[5] . The software and subscriptions guides cover deductibility.

Entertainment at 50%

Entertainment that is not completely business related is 50% deductible and not liable for FBT; that covers corporate boxes, holiday homes and boats, social events, senior-staff dining areas, and gifts of food and drink ^[6] . Meals an employee buys while travelling on business, light meals for senior managers and public promotions are 100% deductible ^[6] . A self-employed consultant’s own meals are usually private, even when working away, unless the work is in a remote location or at unusual hours ^[12] . For GST, you claim the full amount in Box 11 when you pay, then make an annual adjustment in Box 9 of 15% of the non-deductible GST-exclusive amount, on the earlier of your income tax return’s due date and the date you file it ^[7] . A team lunch at a restaurant and a client lunch both sit in the 50% bucket. The business meals guide has more examples.

The home office

The square metre rate option is available when the business area is set aside and used mainly for business ^[8] . The rate covers utility-type costs and is $57.30 per square metre for 2025-2026 and $55.60 for 2024-2025 ^[8] . Mortgage interest, rates and rent are claimed separately, as the business share of floor area; only the interest portion of a mortgage counts, and there is no GST on it ^[8] . If you use this option, you cannot claim other home expenses or depreciation for business use of the home ^[8] . The proportional method instead apportions all household costs by time and space ^[8] . The home office guide walks through both.

Equipment and depreciation

Assets that cost less than the $1,000 low-value threshold can be deducted immediately instead of depreciated; a GST-registered business uses the price less GST ^[9] . Pooling rules stop you splitting one purchase to get under the threshold ^[9] . Separately, a new (or new-to-New Zealand) depreciable asset first available on or after 22 May 2025 qualifies for Investment Boost: 20% of its cost is deducted upfront and the remaining 80% is depreciated ^[13] . The equipment guide covers depreciation rates.

Staff, KiwiSaver, GST and provisional tax

The default employer KiwiSaver rate rose from 3% to 3.5% on 1 April 2026, and rises to 4% on 1 April 2028 ^[10] . You must register for GST once turnover reaches $60,000 in the last or next 12 months ^[3] . Provisional tax applies when your residual income tax is more than $5,000 ^[11] . The GST guide, GST return guide, record-keeping guide and year-end checklist cover the rest.

Common mistakes

• Paying a freelance photographer or writer for a publication gross, when it is a schedular activity ^[2] .
• Withholding nothing when the contractor never supplied an IR330C, instead of 45% ^[2] .
• Paying GST to overseas software suppliers because your GST number was never entered ^[4] .
• Claiming a team restaurant lunch at 100% ^[6] .
• Forgetting the annual Box 9 GST adjustment on 50% entertainment ^[7] .
• Claiming home office depreciation on top of the square metre rate ^[8] .