Construction and tradie expenses in New Zealand: the complete guide for builders and trade businesses

New Zealand has no construction-specific scheme like the UK’s CIS, but it has the next closest thing: schedular payments, which make the business that pays a labour-only building contractor withhold tax from every invoice. Around that sit the rules every trade business deals with: a single 15% GST on everything, a $1,000 line between writing off a tool and depreciating it, two ways to claim the ute, and the April 2026 changes to minimum wage and KiwiSaver. This guide goes through the whole ledger of a New Zealand builder or tradie, category by category, with a verdict for each one before the detail. Every figure is sourced to Inland Revenue or Employment New Zealand in the Sources section, retrieved 10 October 2026.

What this guide covers: materials and consumables, labour-only subcontractors and schedular payments, tools and the low-value threshold, plant and equipment, vehicles and kilometre rates, wages, KiwiSaver and ACC, protective gear, repairs, insurance and licences, bank and payment costs, GST, provisional tax, and the records and year-end work that tie it together.

The trade ledger at a glance

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

Where ExpenseFlow fits

The trade-business pain is volume and timing: dockets from three merchants, fuel receipts, subbie invoices by text message. ExpenseFlow captures each receipt and supplier invoice (email forward, upload or phone), reads the line items and the GST, codes each line to your chart of accounts with a written reason, and routes anything uncertain to a person before it posts. Its New Zealand construction checks are built from the rules on this page: a payment that looks like labour-only contracting is flagged for schedular payment withholding, a vehicle cost is flagged for business-use apportionment, and a capital purchase is flagged for depreciation rather than an expense line. A line taxed at a rate that is not 15% is flagged, a bank fee coded with GST is flagged as exempt, and the line-level GST is recomputed against the totals. 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 does not run payroll, calculate or pay schedular tax, decide a contractor’s status, or file your GST return. Those stay with you and your accountant. The construction chart of accounts for Xero and for QuickBooks line up with the categories below.

The ExpenseFlow for construction and trade businesses page covers these checks across all five countries.

Materials and consumables

Timber, GIB, fixings, pipe, cable, paint, concrete and blades are the costs of the jobs you do, deductible in full, with GST at 15% on most goods and services ^[8] . A GST claim rests on the supplier’s taxable supply information, which a merchant’s docket usually provides. Materials on-charged to a client are still your cost when bought; the recharge is income when invoiced.

Labour-only subcontractors and schedular payments

Contracts wholly or substantially for labour only in the building industry are activity 8 in Inland Revenue’s schedular payment table, with a standard tax rate of 20% and a non-notified rate of 45% ^[1] . Schedular payments apply to contractors in listed activities where the supply mainly consists of labour ^[2] . The contractor tells you their rate using the IR330C tax rate notification; they can choose a rate other than the standard one, but they cannot use a rate lower than 10% without a tailored tax rate from Inland Revenue ^[2] . A subbie who quotes a fixed price for a finished job, supplies the materials and runs their own crew is not on a labour-only contract and is paid gross like any supplier.

Tools and the $1,000 low-value threshold

The low-value asset threshold has been $1,000 since 17 March 2021: an asset at or under it can be deducted immediately instead of being depreciated over its life ^[3] . 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 ^[11] . If you are registered for GST, you use the price of the asset less the GST charged ^[3] . A $990 drill set (excluding GST) is a one-year write-off; a $1,400 mitre saw is depreciated. Pooled assets cannot be buildings and cannot be taken out of the pool once in ^[3] . The equipment and tools guides cover the rates.

Plant, equipment and hire

Diggers, trailers, scaffolding and compressors you own are depreciating assets claimed at Inland Revenue’s rate for the asset class ^[3] . Plant hired for a job is an ordinary cost of the job. Repairs that keep plant in its existing condition are deductible as incurred; a rebuild that makes it something better is capital.

Vehicles and kilometre rates

For the 2025-2026 income year, the Tier 1 rates, which cover fixed and running costs for the business share of the first 14,000 km the vehicle travels including private use, are $1.20 for petrol, $1.30 for diesel, 90 cents for a petrol hybrid and $1.22 for an electric vehicle; above 14,000 km of total travel the Tier 2 rates of 37, 38, 24 and 23 cents apply ^[4] . Actual costs apportioned by a logbook are the alternative. The GST claim on vehicle costs follows the business share. The vehicle and mileage guides cover the method choice, and the mileage log template the logbook.

Wages, KiwiSaver and ACC

From 1 April 2026 the adult minimum wage is $23.95 an hour, with starting-out and training rates of $19.16 ^[5] , which matters for apprentices and labourers. On the same date the default employee and employer KiwiSaver rates rose from 3% to 3.5%, employers must apply the new rate to all pay days from 1 April, eligible 16 and 17 year olds qualify for employer contributions, and the default rises to 4% from 1 April 2028 ^[6] . ACC work levies are set by industry classification, and construction sits in the higher bands; ACC is the authority on your rate. Wages, KiwiSaver and ACC levies are all deductible employment costs.

Protective gear and workwear

Boots, hi-vis, hard hats, gloves, eye and ear protection bought by the business are ordinary costs of running a site, with 15% GST claimed from the supplier’s invoice ^[8] . Jeans and plain t-shirts worn on site are private clothing whoever pays for them.

Insurance, licences and fines

Public liability, contract works, tool and vehicle insurance are deductible costs of trading. LBP licence fees, plumbing and electrical registration and practising licences are deductible in the year paid; claim GST where the invoice shows it. Fines and penalties for breaking a law are not deductible.

Bank fees, software and the office

Bank fees, interest and loans are financial services, which Inland Revenue lists among exempt supplies that are not subject to GST ^[9] , so there is no GST to claim on them. Phone plans, quoting and job management software, and accountancy carry GST; a phone used privately is apportioned.

GST and provisional tax

You must register for GST once your turnover was at least $60,000 in the last 12 months or you expect it to reach that in the next 12 months, or as soon as you add GST to your prices ^[7] , and you charge 15% on most taxable supplies you make ^[8] . The New Zealand GST guide and the GST return guide cover the return. Provisional tax applies once you had to pay more than $5,000 of tax at the end of the year from your last return ^[10] , which catches most trade businesses in their second profitable year; the tax deadlines calendar has the instalment dates.

Records and year end

Business records are kept for seven years, as the record-keeping guide sets out. For subbies, keep each IR330C and the schedular tax you withheld; for vehicles, the logbook; for tools, the asset register that shows which items were written off under $1,000 and which are being depreciated. The year-end checklist walks the close.

Common mistakes

• Paying labour-only building subbies gross without schedular withholding ^[1] .
• Withholding at 20% when no IR330C has been given, instead of 45% ^[1] .
• Depreciating a $900 tool that could be written off, or writing off a $1,400 one ^[3] .
• Testing the $1,000 threshold on the GST-inclusive price when GST-registered ^[3] .
• Claiming 100% of the ute’s costs when it is also the family vehicle ^[4] .
• Running payroll at 3% KiwiSaver after 1 April 2026 ^[6] .
• Coding bank fees with GST ^[9] .
• Leaving GST registration until after turnover has already passed $60,000 ^[7] .