Being a Sole Trader in New Zealand comes with a lot of freedom — you call the shots, choose your hours, and run your business your way. But that freedom also means you’re responsible for keeping your finances in order.
For Tradies and Contractors, staying on top of your bookkeeping isn’t just ticking boxes — it’s about making sure your business stays financially healthy and avoiding headaches with Inland Revenue (IRD).
In this guide, we’ll go through the key things every NZ Sole Trader needs to know to keep their books accurate, simple, and stress-free.
Why Bookkeeping matters for Sole Traders
Bookkeeping is the backbone of every business, no matter how small. For Sole Traders, it helps you:
Track income and expenses so you know exactly how your business is performing.
Meet IRD requirements such as GST, PAYE (if you employ staff), and Income tax filing.
Claim business expenses to reduce your tax bill.
Stay cashflow positive and avoid financial stress.
Without proper records, you risk missing tax deadlines, overpaying the IRD, or worse—facing penalties.
Bookkeeping basics every NZ Contractor should know
1. Keep business and personal finances separate
Set up a separate bank account just for your business. Mixing personal and business transactions makes it much harder to track your money and reconcile your accounts accurately.
2. Stay on top of invoicing
In contracting, cashflow is everything. Make it a habit to send invoices promptly and follow up on any overdue payments. Digital tools like Xero or MYOB can make this faster, easier, and less stressful.
3. Track your expenses
Whether it’s petrol, tools, office supplies, or internet bills, many of your business costs are tax-deductible. Keep accurate receipts and records so you can claim everything you’re entitled to at tax time.
4. Understand GST obligations
If your turnover goes over $60,000 a year, you need to register for GST. This means adding GST to your invoices and filing returns — usually every two or six months — so you stay compliant with IRD.
5. Manage Payroll if you hire Staff
If you take on Staff, you’ll need to run a weekly (or fortnightly) Payrun, handle PAYE, KiwiSaver contributions, and Leave entitlements. Staying on top of P)ayroll ensures your staff are paid correctly and keeps you compliant with IRD requirements.
6. Keep accurate records for at least 7 years
By law, Sole Traders in New Zealand must keep financial records — like invoices, receipts, and bank statements — for at least seven years. Using cloud-based systems makes it much easier to store and organise everything without the stress of piles of paperwork.
FAQs
Do I need an Accountant if I’m just a Sole Trader?
Not legally, but it’s highly recommended. An Accountant can help you reduce tax, stay compliant, and save hours of admin stress.Can I claim home office expenses?
Yes, if you work from home, you may claim a portion of expenses like rent, power, and internet.What’s the difference between Bookkeeping and Accounting?
Bookkeeping is about recording day-to-day transactions, while Accounting involves interpreting that data for decision - making and tax filing.How often should I update my books?
Ideally, weekly. Waiting until tax season creates stress and increases the chance of errors.What Software should Sole Traders use?
Popular choices include Xero, COUNT or MYOB. At CB Solutions, we work with, can recommend and set up Xero for you.
Bookkeeping might not be the most exciting part of running your business, but it’s one of the most important. By keeping your records up to date — or outsourcing to trusted experts — you can save time, reduce stress, and make sure your Kiwi business stays compliant with the IRD.
👉 Ready to simplify your Bookkeeping? Get in touch with CB Solutions for professional Bookkeeping, Accounting, and Payroll services tailored to Kiwi Sole Traders and Contractors.
