GST in NZ: A Simple Guide for Salon Owners & Stylists

August 20, 2025

Teréze Taber

Co-Founder, BTB Salon Services – Written with Lynden Mason

At Behind the Brand, we work with salons and small businesses every single day – and one thing we hear all the time is confusion about GST.

We get it (after 20 years being self-employed, we REALLY get it!). GST feels about as thrilling as cleaning out your colour bowls at the end of a 12-hour Saturday. And then there’s the IRD… the three little letters that can send a shiver down even the most confident business owner’s spine.

Let’s be honest, we’ve all had that nightmare where you get a Very Official Letter in the mail and your heart drops into your boots. It’s not because you’ve actually done anything wrong. It’s because you might have… without even knowing it. That’s the fear talking. And like anything else in life, you fear what you don’t understand.

So let’s change that. Here’s a little GST 101 – minus the boring bits (as much as we can avoid!) – so you can understand it, own it, and decide if it’s right for your business.

What is GST and What Happens When You Register to GST?

GST stands for Goods and Services Tax. In New Zealand, it’s 15%.

If you’re self-employed and your turnover goes over $60,000 in any rolling 12-month period, IRD says you must register for GST.
If you’re under that line, registering is totally optional – your choice.

Once you’re in the GST club, you’ll need to:

Add 15% GST to your prices

File GST returns (usually every 2 months, though some file 6-monthly; bigger businesses may file monthly)

Keep receipts so you can claim GST back on your business costs like: hair colour and stock, rent or chair hire, tools and equipment

Things Stylists Often Don’t Realise They Can Claim

Beyond the obvious stock and rent, there are lots of little business costs that add up. As a stylist or salon owner, you may also be able to claim GST back on:

1. Education & training – workshops, courses, online classes, and even travel costs to get there

2. Marketing – Facebook/Instagram ads, Canva Pro, website hosting, domain names, flyers, signage

3. Professional fees – accountant, bookkeeper, business coach, liability insurance

4. Subscriptions – Spotify/Apple Music for the salon, industry magazines, scheduling software like Timely or Fresha

5. Home office costs – if you do admin at home, a portion of internet, power, and phone bills

6. Vehicle use – petrol, rego, WOF, repairs (if used for business trips), or mileage claims

7. Salon extras – towels, laundry costs, cleaning supplies, PPE, and even client refreshments

👉 Many stylists leave money on the table by not claiming these. Keep your receipts – every little bit adds up.

When GST Could Be Your New Best Friend

GST can work in your favour if:

You’ve got high expenses compared to your sales (e.g., 40% of your income goes back into the business)

You’re confident raising your prices and holding that price

You’ve got big growth goals, like hiring staff or expanding your services

When GST Might Be a Frenemy

You might hold off registering if:

Most of your clients are private (most can’t/won’t claim GST back anyway)

You’re not ready to bump your prices just yet

You want to keep your business simple, small, and under $60k for now

Let’s Break It Down – Real Numbers

Here’s a simple look at what happens once you cross that $60k line:

Example Income	Not GST Registered	GST Registered
$59,000	You keep it all (before income tax & expenses). No GST to worry about.	N/A — you’re under the threshold.
$65,000	Over the threshold, so IRD will require you to register.	About $8,500 of that $65k is GST owed to IRD. If you don’t raise prices, it comes out of your pocket. But you can claim GST back on stock, rent, tools, training, and more, which helps soften the impact.

The key? If you raise your prices to include GST, your clients cover it and you simply pass it on to IRD. If you don’t raise prices, you’re effectively paying it yourself.

Is GST a Trap?

No… but it is a commitment.
Think of GST like adopting a puppy. It can bring a lot of joy and once in a rhythm will become part of the family, but it also needs feeding, training, and regular walks. It’s not something you sign up for “just because.”

If you’re growing, confident in your pricing, and ready to scale up, GST can work in your favour. If you’re happy in your sweet spot and want to keep admin light, staying under $60k is totally fine.

Still Not Sure?

We’ve seen it all: the business owners who register for GST before they’re ready and feel like they’ve chained themselves to a tax return… and the ones who avoided it so long they missed out on thousands in GST refunds

One of the sneaky traps is that if you go over the $60k threshold and don’t realise, IRD can backdate your registration. That means you’ll still need to pay GST on the income you’ve already earned – even if you didn’t charge it at the time. Ouch.

GST isn’t scary once you understand it — it’s about knowing when it’s right for your business and being prepared.

✨ Quick Salon Owner Checklist

Track your income monthly

Review pricing regularly

Keep invoices & receipts tidy

Watch the $60k threshold

Know what you can (and should) claim

Ask for advice before you hit it

Final Word

GST isn’t scary once you understand it.
It’s about knowing when it’s right for your business and being prepared.

👉 Need help? BTB can run the numbers with you and give straight-up, no-pressure advice.

And if you want the short version, grab our One-Page GST Beginner Guide – perfect to keep on hand.

GST: Friend, Foe…or Just Misunderstood?