My organisation is over $60,000 a year. Do we need to register for GST?

It’s one of the most common things we hear from small charities and incorporated societies:

“We’re over $60,000 a year now — so we have to register for GST, right?”

Not necessarily.

There’s a long-standing bit of “community wisdom” that if your organisation earns or spends more than $60,000 a year, you must register for GST. But the real rule, as set out by Inland Revenue Department (IRD), is more specific than that.

It’s about taxable activity, not just total income.

What counts as taxable activity for a non-profit?

Examples that are likely taxable activities:

• Delivering a contract and invoicing for it
• Charging for workshops
• Selling tickets to events where GST is included
• Selling merchandise

Under the XRB reporting standards, this would typically fall under:

Sale of goods or services (commercial activities)

Examples that are usually not taxable activities:

• Receiving grants
• Receiving donations
• Membership fees (in many cases)

“But we take in more than $60,000!”

Yes — and you may still not need to register.

Here’s a real-world style example:

A philanthropic foundation receives $500,000 a year to distribute to community groups.

• The money coming in is grants and donations
• The money going out is grants made
• No GST is charged on those flows

Even though the total money flowing through is high, there is no taxable activity.

In that situation, IRD may:

• Decline a GST registration application, or
• Question why the organisation is registered

IRD takes a fairly dim view of organisations registering just to claim GST back on things like:

• Coffee meetings
• Catering
• Computers
• General office expenses

If none of your income includes GST, you are not automatically entitled to claim GST back on your spending.

It gets more complicated…

Even where an organisation does have some taxable activity, GST can become messy.

If only part of your organisation’s work is taxable, you may:

• Only be able to claim GST on expenses related to that taxable activity
• Have to apportion GST on shared costs

For example:

• You run a ticketed fundraiser (GST included in ticket price).
  → You can likely claim GST on the event costs.
• You host a free workshop for grantees.
  → You likely cannot claim GST on catering.
• You buy a computer used partly for fundraising and partly for grant admin.
  → You may only be able to claim a portion of the GST.

Now we’re in apportionment territory — and that’s where compliance complexity increases quickly.

So should small non-profits register?

For many smaller community organisations, if you can avoid registering, life is often simpler:

• No GST returns
• No apportionment calculations
• No risk of claiming incorrectly
• Less compliance stress for volunteer treasurers

That said, every situation is different.

If your organisation is:

• Charging for services regularly
• Delivering contracts
• Running significant commercial activities

…then GST registration may be required. We always suggest talking to a relevant professional if your organisation is in a grey area.