When you register for GST, Inland Revenue (IRD) will ask you to choose two things: your accounting basis and your GST filing frequency – also known as your taxable period. You can file monthly, two-monthly, or six-monthly. If you don’t choose, IRD will default you to two-monthly.
This article explains the differences between each option, which types of business each suits best, how each affects cash flow, and what to watch out for when making your choice.
GST Tip
No matter which option you start with, you can change your filing frequency later through myIR, provided you meet the eligibility requirements for your chosen frequency. So don’t worry that you’ll be locked in to your initial choice.
At a Glance: Comparing Your GST Frequency Options
- Turnover (total sales income) threshold: Any (mandatory over $24M)
- Returns per year: 12
- Admin load: High
- Cash flow benefit: Best – fast refunds, frequent visibility
- Best suited to: Exporters, and high-volume transaction businesses, e.g. retail/hospitality
- Turnover (total sales income) threshold: Any up to $24M (default)
- Returns per year: 6
- Admin load: Moderate
- Cash flow benefit: Good – regular cycle
- Best suited to: Most small-medium businesses
- Turnover (total sales income) threshold: Under $500,000 only
- Returns per year: 2
- Admin load: Low (but potentially large jobs)
- Cash flow benefit: Limited – long wait for refunds
- Best suited to: Consultants, sole traders with low transaction volume and simple accounts
Monthly GST Filing
Who can (and must) file monthly?
- Anyone can choose to file monthly. It’s not restricted to large businesses.
- You must file monthly if your annual turnover exceeds, or is likely to exceed, $24 million.
When monthly filing makes sense
- You regularly receive GST refunds. For example, if you’re an exporter whose sales are zero-rated but you still pay GST on your expenses.
- You already file PAYE returns monthly, aligning your GST with your payroll rhythm can simplify your admin calendar.
- You have a very high volume of transactions (e.g. retail or hospitality) and prefer to process smaller data sets each period rather than accumulating months of records.
- You want maximum visibility over your GST position and the ability to course-correct quickly if something looks off.
Things to be aware of
- Monthly filing is admin-intensive. Twelve returns per year can feel relentless, especially for small business owners who wear many hats.
- Late penalties add up fast. Miss one return and the next one is already approaching. IRD charges a $50 (if on a payments basis) or $250 (if on an invoice/hybrid basis) late filing penalty per missed return, plus use-of-money interest on unpaid amounts. Staying on top of monthly filing requires solid systems.
- Due dates follow the standard 28th-of-the-following-month rule, with two exceptions: the period ending 30 November is due 15 January, and the period ending 31 March is due 7 May.
Cash flow upside: Monthly filing means you’re not sitting on GST collected for long, and refunds come around more quickly. For businesses with tight cash flow, this can be a meaningful benefit.
Two-Monthly GST Filing
Two-monthly is the standard GST filing frequency and the default if you don’t make a choice at registration. It applies to any business with annual turnover up to $24 million.
Choosing your cycle: odd or even months?
When filing two-monthly, you’ll choose one of two cycles:
- Odd months: periods ending January, March, May, July, September, November
- Even months: periods ending February, April, June, August, October, December
For most New Zealand businesses whose financial year ends on 31 March, odd months should be selected. This ensures your GST taxable periods align with your income tax balance date. If your balance date differs, choose the cycle that aligns with it.
When two-monthly filing makes sense
- You’re a typical small-to-medium business with reasonably consistent transaction volumes.
- You want a filing rhythm that keeps you on top of GST without the intensity of monthly returns.
- You have moderate transaction volumes. Six returns a year strikes a practical balance between staying current and not overdoing things.
Things to be aware of
- You’ll hold collected GST for up to two months before remitting it. Keep this in a separate account so it’s not accidentally spent.
- If your turnover grows above $24 million, IRD will move you to monthly filing.
GST Tip
Two-monthly is the most popular option because it balances compliance regularity with manageable admin. It’s a sensible default for most small businesses.
Six-Monthly GST Filing
Who is eligible?
You can choose to file six-monthly if the value of your total sales was less than $500,000 in the last 12 months, or is likely to be less than $500,000 in the next 12 months.
When six-monthly filing makes sense
- You’re a sole trader or small operator with a low and consistent volume of transactions – for example, an IT/business consultant, working from a home office.
- Your GST position is relatively predictable, and you’re rarely in a refund position.
- You don’t need frequent cash flow visibility from your GST returns.
Things to be aware of
- Each return covers six months of transactions. This can be a large and time-consuming job if your records aren’t kept up to date throughout the period or you have many transactions.
- If you’re in a regular GST refund position, waiting six months for a refund can put unnecessary pressure on cash flow. Monthly or two-monthly would serve you better.
- If your sales grow above $500,000 in any 12-month period, you’ll need to move to two-monthly filing. IRD monitors this and may initiate the change.
- Due dates for six-monthly filers:
- 28 October (for the period ending 30 September)
- 7 May (for the period ending 31 March).
Can You Change Your Filing Frequency?
Yes. It’s straightforward to do through myIR. However, there are a few things to know:
- Eligibility applies. You can only change to a frequency you’re eligible for based on your turnover.
- Balance date alignment is required. Your GST taxable periods must align with your income tax balance date, e.g. 31 March.
- Timing matters. Changes typically take effect from the start of your next taxable period. Check with IRD or your accountant to understand the transition period.
- Turnover changes may force a change. If your sales cross a threshold (up past $24M, or down through $500K), IRD may require or notify you of a mandatory frequency change.
GST Due Dates: What You Need to Know
Two important exceptions apply to all filing frequencies:
- Period ending 30 November: due 15 January (extended over the Christmas/New Year period)
- Period ending 31 March: due 7 May (extended to align with terminal tax dates)
If a due date falls on a weekend or public holiday, it moves to the next working day.
Missing a deadline carries real costs. IRD charges a $50-$250 late filing penalty per return, plus use-of-money interest on any unpaid amounts. Consistent late filing can also trigger a review and a forced move to monthly filing.
GST Tip
Regardless of your filing frequency, the general rule is that GST returns and payments are due on the 28th of the month following the end of your taxable period.
Three Tips for Staying on Top of GST
Whatever filing frequency you choose, these habits will make the process much easier:
- Keep GST in a separate bank account
Set aside the GST portion of your sales/income into a dedicated account. When your return is due, the money is already sitting there, so there is no scrambling or shortfall. - Use accounting software
Tools like Xero and MYOB automatically track GST on invoices and expenses, generate GST reports, and can file returns directly to IRD via myIR integration. This dramatically reduces errors and filing time. It can even save you from having to pay an accountant or bookkeeper to file for you, as these tools make DIY filing much easier. - Consider the payments basis (cash accounting)
The payments basis (also called cash accounting) means you account for GST when money actually changes hands – when you receive payment from a customer or pay a supplier – rather than when invoices are issued. This can help align your GST liability with your actual cash flow, which is particularly useful if you have customers who are slow to pay.
GST Tip
Regardless of your filing frequency, the general rule is that GST returns and payments are due on the 28th of the month following the end of your taxable period.
Frequently Asked Questions
IRD will default you to two-monthly filing, aligned to your income tax balance date.
The eligibility threshold is based on your total annual sales. Seasonal variation is fine as long as your annual total stays below $500,000. If it crosses that threshold, you’ll need to move to two-monthly.
IRD will charge a $50 (if on a payments basis) or $250 (if on an invoice/hybrid basis) late filing penalty and use-of-money interest on any unpaid amounts. If you’re struggling to pay, contact IRD before the due date to discuss instalment options — this can help avoid some penalties.
No. Many businesses file their own GST returns through myIR or via accounting software e.g. Xero/MYOB,. However, an accountant can help ensure your GST treatment of specific transactions is correct and can manage filing on your behalf if you prefer.
Yes, but the change will usually take effect from the start of your next taxable period. Contact IRD through myIR or ask your accountant/tax agent to arrange this.
For the most up-to-date information on GST filing requirements, visit ird.govt.nz/gst or speak with a registered tax agent.
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