NZ Nonprofit Chart of Accounts for Xero: Taxable Activity vs Exempt Income

The trap in New Zealand charity finance is reading “tax exempt” too broadly. A registered charity’s income-tax exemption is real but narrow: it does not reach GST or PAYE. So a charity that runs an op shop, sells event tickets or charges for services sits inside the GST system even while its surplus is income-tax free. This is a New Zealand nonprofit chart of accounts for Xero that draws that line clearly, as a readable reference CSV and a Xero import CSV.

The income-tax exemption is not a GST exemption

This is the distinction the whole chart turns on. Being registered with Charities Services and income-tax exempt does not take you out of GST. If the organisation carries on a taxable activity and its turnover passes the registration threshold, normal GST applies. The chart therefore codes the income side by what each receipt actually is, not by the charity’s overall tax status.

Donations, grants and the funding question

The income accounts separate money that is outside GST from money that is not:

• Donations and koha received are unconditional gifts, outside GST, and coded No GST.
• Grants received default to No GST too, because most grants are outside GST. But a grant that is consideration for a specific supply can be subject to GST, so the account lists GST on Income as the alternative with a note to read the funding agreement. This is the single most common place charity GST goes wrong.
• Fundraising and event income and membership subscriptions are trading income, a taxable activity, and use GST on Income at 15% when the charity is registered.

The op shop and programme costs

Many charities run a shop, so the chart includes cost of goods sold (shop). Donated stock has no input tax to recover, so the account defaults to 15% on bought-in goods but lists No GST as the alternative for donated stock sold. Programme and grant costs captures the spending that delivers the charity’s purpose, standard-rated where GST applies. Volunteer and koha payments sit on No GST, since they are generally outside the GST system.

Apportionment, kept in view

A charity with both taxable activity and non-taxable activity recovers input tax only on the part used for taxable supplies, so some costs need apportioning. The chart cannot do the apportionment for you, but keeping taxable trading income, donations and grants in distinct accounts gives you the figures the apportionment calculation needs at year end. One subtlety to watch: where a koha is given in return for goods or services, that exchange can be a taxable supply rather than a gift, so the substance of the transaction, not the word used to describe it, decides whether GST applies.

How to use it

1. Open the CSV: each account shows its class, default Xero GST code, the alternatives, and a note. The donation, grant and fundraising accounts are the nonprofit additions.
2. In Xero go to Accounting, then Chart of accounts, then Import, and upload the CSV into a demo organisation first.
3. Confirm the New Zealand GST rates exist in your organisation.
4. Set a rule for reviewing each grant against its funding agreement before coding, so the No GST versus GST on Income choice is deliberate.

The recurring work is coding each receipt to the right income or cost account:

• Hubdoc brings recurring supplier invoices into the file.
• ExpenseFlow reads each receipt and bill, applies the right New Zealand GST treatment, and posts it into Xero against the correct account, so taxable trading costs and out-of-scope items stay separated for the apportionment.
• Dext applies supplier rules for repeat suppliers.

On QuickBooks instead? See the NZ nonprofit chart of accounts for QuickBooks. For the detail on the exemption and taxable activity, see the New Zealand nonprofit expenses guide.