{"id":961,"date":"2020-12-08T13:44:14","date_gmt":"2020-12-08T13:44:14","guid":{"rendered":"http:\/\/nz.legalvision.com.au\/?p=961"},"modified":"2026-01-16T14:59:30","modified_gmt":"2026-01-16T01:59:30","slug":"operate-business-as-sole-trader","status":"publish","type":"post","link":"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/","title":{"rendered":"Operating My NZ Business as a Sole Trader"},"content":{"rendered":"\n<p>If you are considering starting your own business, you should consider which business structure best suits your needs. Operating as a sole trader is one of the most common structures in New Zealand because it is easy and cheap to set up and run. Before choosing this structure, you should consider:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>whether becoming a sole trader is right for you;<\/li>\n\n\n\n<li>your tax obligations as a sole trader; and<\/li>\n\n\n\n<li>what is involved in setting yourself up as a sole trader.<\/li>\n<\/ul>\n\n\n\n<p>This article explains the pros and cons of becoming a sole trader to help you decide whether it is the correct business structure for you, including some legal and financial implications of this decision.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What Does it Mean to Operate as a Sole Trader?<\/h2>\n\n\n\n<p>As a <a href=\"https:\/\/legalvision.co.nz\/business-structures\/employed-sole-trader-same-time\/\">sole trader<\/a>, you are in business for yourself. You control the direction of the business and retain all profits. You also bear full legal responsibility, which means your personal assets can be at risk if your business runs into debt or faces legal action.<\/p>\n\n\n\n<div  class=\"box box--icon box--star\">\n    <p>You do not need to register a company, and you can use your own name or trade under a business name.<\/p>\n<\/div>\n\n\n\n<p>Sole traders can still access many government business benefits, such as:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/legalvision.co.nz\/employment\/annual-parental-leave\/\">paid parental leave<\/a>;<\/li>\n\n\n\n<li>Kiwisaver; and<\/li>\n\n\n\n<li>ACC covering <a href=\"https:\/\/legalvision.co.nz\/employment\/acc-refund-accident\/\">workplace injuries<\/a>.&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>The start-up costs to set up your new business as a sole trader are low. Importantly, you can offset your losses against other income sources. You may also be entitled to government benefits and other programmes to help you get your business running.&nbsp;<\/p>\n\n\n\n<p>This flexibility appeals to many small business owners, especially if you are:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>operating a trade, such as being a plumber, tiler, electrician, carpenter or hairdresser;<\/li>\n\n\n\n<li>involved in creative pursuits, such as being an artist, actor, model or journalist; or<\/li>\n\n\n\n<li>in the service industry, such as being a consultant or gardener.<\/li>\n<\/ul>\n\n\n\n<p>However, being a sole trader also has some drawbacks, including that:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>you may be putting your personal assets at risk unless you take steps to protect them;<\/li>\n\n\n\n<li>it is harder to obtain a loan and raise capital;<\/li>\n\n\n\n<li>there is no one else to share ideas or decisions with; and<\/li>\n\n\n\n<li>it can be challenging to grow or sell your business.&nbsp;&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>If you think these factors will be problematic for your business, consider establishing a company or partnership instead. These options allow you to operate your business as a separate legal entity.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Is Becoming a Sole Trader Right for You?<\/h2>\n\n\n\n<p>Before you set yourself up as a sole trader, you should consider whether you:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>want to share the responsibilities of managing your business;<\/li>\n\n\n\n<li>want to split the income and losses of your business with other people;<\/li>\n\n\n\n<li>plan to sell your business in the future; and<\/li>\n\n\n\n<li>will require any large loans or debts to expand your operations.<\/li>\n<\/ul>\n\n\n\n<p>If you are not interested in pursuing any of these considerations, then a sole trader business structure will likely suit your needs. This is because it is:\u00a0<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>a cost-effective and straightforward structure to set up and run; and\u00a0<\/li>\n\n\n\n<li>has lower tax compliance compared to a company.&nbsp;<\/li>\n<\/ul>\n\n\n\n<div  class=\"box box--icon box--info\">\n    <p>If you are not sure, it may be a good idea to talk to someone who is already trading in your industry. Alternatively, you may obtain advice from a lawyer or accountant specialising in this area.<\/p>\n<\/div>\n\n\n\n\n<a href=\"#content-next\"\n   class=\"block p-4 mt-10 text-xl font-bold text-center text-white no-underline bg-gray-800 rounded-t-xl\">\n    Continue reading this article below the form\n    <i class=\"text-xl fa-regular fa-arrow-down\"><\/i>\n<\/a>\n<div class=\"px-6 pt-10 pb-12 mb-10 text-center bg-gray-100 rounded-b-xl sm:px-12 test\">\n    <div class=\"mb-8 text-2xl font-bold text-orange\">\n        Need legal advice?\n        <br>\n        <span class=\"text-lg not-prose\">\n                            Call <a href=\"tel:+64800005570\" class=\"not-prose\">0800 005 570<\/a> for urgent assistance.\n                <br>\n                Otherwise, complete this form, and we will contact you within one business day.\n                    <\/span>\n    <\/div>\n\n    \n\n<div class=\"not-prose flex justify-center text-left gform_input_bg_white    \">\n    <script>\nvar gform;gform||(document.addEventListener(\"gform_main_scripts_loaded\",function(){gform.scriptsLoaded=!0}),document.addEventListener(\"gform\/theme\/scripts_loaded\",function(){gform.themeScriptsLoaded=!0}),window.addEventListener(\"DOMContentLoaded\",function(){gform.domLoaded=!0}),gform={domLoaded:!1,scriptsLoaded:!1,themeScriptsLoaded:!1,isFormEditor:()=>\"function\"==typeof InitializeEditor,callIfLoaded:function(o){return!(!gform.domLoaded||!gform.scriptsLoaded||!gform.themeScriptsLoaded&&!gform.isFormEditor()||(gform.isFormEditor()&&console.warn(\"The use of gform.initializeOnLoaded() is deprecated in the form editor context and will be removed in Gravity Forms 3.1.\"),o(),0))},initializeOnLoaded:function(o){gform.callIfLoaded(o)||(document.addEventListener(\"gform_main_scripts_loaded\",()=>{gform.scriptsLoaded=!0,gform.callIfLoaded(o)}),document.addEventListener(\"gform\/theme\/scripts_loaded\",()=>{gform.themeScriptsLoaded=!0,gform.callIfLoaded(o)}),window.addEventListener(\"DOMContentLoaded\",()=>{gform.domLoaded=!0,gform.callIfLoaded(o)}))},hooks:{action:{},filter:{}},addAction:function(o,r,e,t){gform.addHook(\"action\",o,r,e,t)},addFilter:function(o,r,e,t){gform.addHook(\"filter\",o,r,e,t)},doAction:function(o){gform.doHook(\"action\",o,arguments)},applyFilters:function(o){return gform.doHook(\"filter\",o,arguments)},removeAction:function(o,r){gform.removeHook(\"action\",o,r)},removeFilter:function(o,r,e){gform.removeHook(\"filter\",o,r,e)},addHook:function(o,r,e,t,n){null==gform.hooks[o][r]&&(gform.hooks[o][r]=[]);var d=gform.hooks[o][r];null==n&&(n=r+\"_\"+d.length),gform.hooks[o][r].push({tag:n,callable:e,priority:t=null==t?10:t})},doHook:function(r,o,e){var t;if(e=Array.prototype.slice.call(e,1),null!=gform.hooks[r][o]&&((o=gform.hooks[r][o]).sort(function(o,r){return o.priority-r.priority}),o.forEach(function(o){\"function\"!=typeof(t=o.callable)&&(t=window[t]),\"action\"==r?t.apply(null,e):e[0]=t.apply(null,e)})),\"filter\"==r)return e[0]},removeHook:function(o,r,t,n){var e;null!=gform.hooks[o][r]&&(e=(e=gform.hooks[o][r]).filter(function(o,r,e){return!!(null!=n&&n!=o.tag||null!=t&&t!=o.priority)}),gform.hooks[o][r]=e)}});\n<\/script>\n\n                <div class='gf_browser_gecko gform_wrapper gravity-theme gform-theme--no-framework lawyer-form_wrapper gplaceholder_wrapper form-with-labels-no-asterisks_wrapper has-new-validation-error-styling_wrapper' data-form-theme='gravity-theme' data-form-index='0' id='gform_wrapper_2452' style='display:none'><div id='gf_2452' class='gform_anchor' tabindex='-1'><\/div><form method='post' enctype='multipart\/form-data' target='gform_ajax_frame_2452' id='gform_2452' class='lawyer-form gplaceholder form-with-labels-no-asterisks has-new-validation-error-styling' action='\/api\/wp\/v2\/posts\/961#gf_2452' data-formid='2452' novalidate>\n                        <div class='gform-body gform_body'><div id='gform_fields_2452' class='gform_fields top_label form_sublabel_below description_below validation_below'><div id=\"field_2452_15\" class=\"gfield gfield--type-honeypot gform_validation_container field_sublabel_below gfield--has-description field_description_below field_validation_below gfield_visibility_visible\"  ><label class='gfield_label gform-field-label' for='input_2452_15'>Instagram<\/label><div class='ginput_container'><input name='input_15' id='input_2452_15' type='text' value='' autocomplete='new-password'\/><\/div><div class='gfield_description' id='gfield_description_2452_15'>This field is for validation purposes and should be left unchanged.<\/div><\/div><div id=\"field_2452_1\" class=\"gfield gfield--type-text gfield--input-type-text gf_left_half gfield--width-half gfield_contains_required field_sublabel_below gfield--no-description field_description_below field_validation_below gfield_visibility_visible\"  ><label class='gfield_label gform-field-label' for='input_2452_1'>First Name<span class=\"gfield_required\"><span class=\"gfield_required gfield_required_text\">(Required)<\/span><\/span><\/label><div class='ginput_container ginput_container_text'><input name='input_1' id='input_2452_1' type='text' value='' class='medium'     aria-required=\"true\" aria-invalid=\"false\"   \/><\/div><\/div><div id=\"field_2452_12\" class=\"gfield gfield--type-text gfield--input-type-text gf_right_half gfield--width-half gfield_contains_required field_sublabel_below gfield--no-description field_description_below field_validation_below gfield_visibility_visible\"  ><label class='gfield_label gform-field-label' for='input_2452_12'>Last Name<span class=\"gfield_required\"><span class=\"gfield_required gfield_required_text\">(Required)<\/span><\/span><\/label><div class='ginput_container ginput_container_text'><input name='input_12' id='input_2452_12' type='text' value='' class='medium'     aria-required=\"true\" aria-invalid=\"false\"   \/><\/div><\/div><div id=\"field_2452_2\" class=\"gfield gfield--type-email gfield--input-type-email gf_left_half gfield--width-half gfield_contains_required field_sublabel_below gfield--no-description field_description_below field_validation_below gfield_visibility_visible\"  ><label class='gfield_label gform-field-label' for='input_2452_2'>Email Address<span class=\"gfield_required\"><span class=\"gfield_required gfield_required_text\">(Required)<\/span><\/span><\/label><div class='ginput_container ginput_container_email'>\n                            <input name='input_2' id='input_2452_2' type='email' value='' class='medium'    aria-required=\"true\" aria-invalid=\"false\"  \/>\n                        <\/div><\/div><div id=\"field_2452_3\" class=\"gfield gfield--type-phone gfield--input-type-phone gf_right_half gfield--width-half gfield_contains_required field_sublabel_below gfield--no-description field_description_below field_validation_below gfield_visibility_visible\"  ><label class='gfield_label gform-field-label' for='input_2452_3'>Phone<span class=\"gfield_required\"><span class=\"gfield_required gfield_required_text\">(Required)<\/span><\/span><\/label><div class='ginput_container ginput_container_phone'><input name='input_3' id='input_2452_3' type='tel' value='' class='medium'   aria-required=\"true\" aria-invalid=\"false\"   \/><\/div><\/div><div id=\"field_2452_14\" class=\"gfield gfield--type-select gfield--input-type-select gfield--width-full custom-select gfield_contains_required field_sublabel_below gfield--no-description field_description_below field_validation_below gfield_visibility_visible\"  ><label class='gfield_label gform-field-label' for='input_2452_14'>Number of Employees in Your Business<span class=\"gfield_required\"><span class=\"gfield_required gfield_required_text\">(Required)<\/span><\/span><\/label><div class='ginput_container ginput_container_select'><select name='input_14' id='input_2452_14' class='large gfield_select'    aria-required=\"true\" aria-invalid=\"false\" ><option value='' ><\/option><option value='0' >0<\/option><option value='1' >1-5<\/option><option value='6' >6-20<\/option><option value='21' >21-50<\/option><option value='51' >51-250<\/option><option value='250' >250+<\/option><\/select><\/div><\/div><div id=\"field_2452_4\" class=\"gfield gfield--type-textarea gfield--input-type-textarea gfield_contains_required field_sublabel_below gfield--no-description field_description_below field_validation_below gfield_visibility_visible\"  ><label class='gfield_label gform-field-label' for='input_2452_4'>Tell us about your enquiry<span class=\"gfield_required\"><span class=\"gfield_required gfield_required_text\">(Required)<\/span><\/span><\/label><div class='ginput_container ginput_container_textarea'><textarea name='input_4' id='input_2452_4' class='textarea medium'     aria-required=\"true\" aria-invalid=\"false\"   rows='10' cols='50'><\/textarea><\/div><\/div><div id=\"field_2452_5\" class=\"gfield gfield--type-html gfield--input-type-html gfield_html gfield_html_formatted gfield_no_follows_desc field_sublabel_below gfield--no-description field_description_below field_validation_below gfield_visibility_visible\"  >By submitting this form, you agree to receive emails from LegalVision and can unsubscribe at any time. View our <a href=\"https:\/\/legalvision.co.nz\/privacy-policy\/\" target=\"_blank\">Privacy Policy<\/a>. <\/div><div id=\"field_2452_8\" class=\"gfield gfield--type-hidden gfield--input-type-hidden gform_hidden field_sublabel_below gfield--no-description field_description_below field_validation_below gfield_visibility_visible\"  ><div class='ginput_container ginput_container_text'><input name='input_8' id='input_2452_8' type='hidden' class='gform_hidden'  aria-invalid=\"false\" value='http:\/\/legalvision.co.nz\/api\/wp\/v2\/posts\/961' \/><\/div><\/div><div id=\"field_2452_13\" class=\"gfield gfield--type-hidden gfield--input-type-hidden gform_hidden field_sublabel_below gfield--no-description field_description_below field_validation_below gfield_visibility_visible\"  ><div class='ginput_container ginput_container_text'><input name='input_13' id='input_2452_13' type='hidden' class='gform_hidden'  aria-invalid=\"false\" value='generic_form' \/><\/div><\/div><\/div><\/div>\n        <div class='gform-footer gform_footer top_label'> <button type=\"submit\" id=\"gform_submit_button_2452\" class=\"gform_button button\" onclick=\"gform.submission.handleButtonClick(this);\" data-submission-type=\"submit\"><span class=\"gform_submit_button__text\">Submit Now<\/span><\/button> <input type='hidden' name='gform_ajax' value='form_id=2452&amp;title=&amp;description=&amp;tabindex=0&amp;theme=gravity-theme&amp;hash=8d907caff460821c366ed2411b0c45b3' \/>\n            <input type='hidden' class='gform_hidden' name='gform_submission_method' data-js='gform_submission_method_2452' value='iframe' \/>\n            <input type='hidden' class='gform_hidden' name='gform_theme' data-js='gform_theme_2452' id='gform_theme_2452' value='gravity-theme' \/>\n            <input type='hidden' class='gform_hidden' name='gform_style_settings' data-js='gform_style_settings_2452' id='gform_style_settings_2452' value='' \/>\n            <input type='hidden' class='gform_hidden' name='is_submit_2452' value='1' \/>\n            <input type='hidden' class='gform_hidden' name='gform_submit' value='2452' \/>\n            \n            <input type='hidden' class='gform_hidden' name='gform_currency' data-currency='AUD' value='gkO2X2XFW9sQ2PjLSfjWLcWC9hq6Sevid3RLazLMm7slnVQVi3LEI4ntl3DtLz49QrWxORilDkf99kY2o5R8yltDQ5ea+8+aLHTgr45Swb2boJQ=' \/>\n            <input type='hidden' class='gform_hidden' name='gform_unique_id' value='' \/>\n            <input type='hidden' class='gform_hidden' name='state_2452' value='WyJ7XCIxNFwiOltcIjIyODY0N2ViMWU3NTcxZjA4YTY4NGJmMDcwMTk3Y2I0XCIsXCJiMzk3YmQ1MDBmMmFjNjk1ODE4MzdmNTBhYTA2MzQ0OFwiLFwiNGYyNGZkZGEwMzlkNDUxMWFhZGE1NGYwZmQwZmNiZTdcIixcIjUyMmJkMDE2M2I2ZmEwOTI3NDZhZjU5YTg0ZmM1NDk5XCIsXCIzODRlNjk1YjQxMTAzMWFiYmQ2ODEyMGYyZWFhMDYyNlwiLFwiYjkzNDcwNTE2MjkxOGRjZWViMjQzNzRjNmE0NGVmNTlcIixcIjQxMTliODZhMzVjYzJiMWViNDZiMmQ4NjRlNGUzZmNjXCJdfSIsIjQ3MjNiMzA2ZDIyZGVkODA2N2YyMjYyOThkYzI1ODVmIl0=' \/>\n            <input type='hidden' autocomplete='off' class='gform_hidden' name='gform_target_page_number_2452' id='gform_target_page_number_2452' value='0' \/>\n            <input type='hidden' autocomplete='off' class='gform_hidden' name='gform_source_page_number_2452' id='gform_source_page_number_2452' value='1' \/>\n            <input type='hidden' name='gform_field_values' value='' \/>\n            \n        <\/div>\n                        <\/form>\n                        <\/div>\n\t\t                <iframe style='display:none;width:0px;height:0px;' src='about:blank' name='gform_ajax_frame_2452' id='gform_ajax_frame_2452' title='This iframe contains the logic required to handle Ajax powered Gravity Forms.'><\/iframe>\n\t\t                <script>\ngform.initializeOnLoaded( function() {gformInitSpinner( 2452, 'https:\/\/legalvision.co.nz\/wp-content\/themes\/legalv-v6\/img\/spinner.svg', true );jQuery('#gform_ajax_frame_2452').on('load',function(){var contents = jQuery(this).contents().find('*').html();var is_postback = contents.indexOf('GF_AJAX_POSTBACK') >= 0;if(!is_postback){return;}var form_content = jQuery(this).contents().find('#gform_wrapper_2452');var is_confirmation = jQuery(this).contents().find('#gform_confirmation_wrapper_2452').length > 0;var is_redirect = contents.indexOf('gformRedirect(){') >= 0;var is_form = form_content.length > 0 && ! is_redirect && ! is_confirmation;var mt = parseInt(jQuery('html').css('margin-top'), 10) + parseInt(jQuery('body').css('margin-top'), 10) + 100;if(is_form){form_content.find('form').css('opacity', 0);jQuery('#gform_wrapper_2452').html(form_content.html());if(form_content.hasClass('gform_validation_error')){jQuery('#gform_wrapper_2452').addClass('gform_validation_error');} else {jQuery('#gform_wrapper_2452').removeClass('gform_validation_error');}setTimeout( function() { \/* delay the scroll by 50 milliseconds to fix a bug in chrome *\/ jQuery(document).scrollTop(jQuery('#gform_wrapper_2452').offset().top - mt); }, 50 );if(window['gformInitDatepicker']) {gformInitDatepicker();}if(window['gformInitPriceFields']) {gformInitPriceFields();}var current_page = jQuery('#gform_source_page_number_2452').val();gformInitSpinner( 2452, 'https:\/\/legalvision.co.nz\/wp-content\/themes\/legalv-v6\/img\/spinner.svg', true );jQuery(document).trigger('gform_page_loaded', [2452, current_page]);window['gf_submitting_2452'] = false;}else if(!is_redirect){var confirmation_content = jQuery(this).contents().find('.GF_AJAX_POSTBACK').html();if(!confirmation_content){confirmation_content = contents;}jQuery('#gform_wrapper_2452').replaceWith(confirmation_content);jQuery(document).scrollTop(jQuery('#gf_2452').offset().top - mt);jQuery(document).trigger('gform_confirmation_loaded', [2452]);window['gf_submitting_2452'] = false;wp.a11y.speak(jQuery('#gform_confirmation_message_2452').text());}else{jQuery('#gform_2452').append(contents);if(window['gformRedirect']) {gformRedirect();}}jQuery(document).trigger(\"gform_pre_post_render\", [{ formId: \"2452\", currentPage: \"current_page\", abort: function() { this.preventDefault(); } }]);        if (event && event.defaultPrevented) {                return;        }        const gformWrapperDiv = document.getElementById( \"gform_wrapper_2452\" );        if ( gformWrapperDiv ) {            const visibilitySpan = document.createElement( \"span\" );            visibilitySpan.id = \"gform_visibility_test_2452\";            gformWrapperDiv.insertAdjacentElement( \"afterend\", visibilitySpan );        }        const visibilityTestDiv = document.getElementById( \"gform_visibility_test_2452\" );        let postRenderFired = false;        function triggerPostRender() {            if ( postRenderFired ) {                return;            }            postRenderFired = true;            gform.core.triggerPostRenderEvents( 2452, current_page );            if ( visibilityTestDiv ) {                visibilityTestDiv.parentNode.removeChild( visibilityTestDiv );            }        }        function debounce( func, wait, immediate ) {            var timeout;            return function() {                var context = this, args = arguments;                var later = function() {                    timeout = null;                    if ( !immediate ) func.apply( context, args );                };                var callNow = immediate && !timeout;                clearTimeout( timeout );                timeout = setTimeout( later, wait );                if ( callNow ) func.apply( context, args );            };        }        const debouncedTriggerPostRender = debounce( function() {            triggerPostRender();        }, 200 );        if ( visibilityTestDiv && visibilityTestDiv.offsetParent === null ) {            const observer = new MutationObserver( ( mutations ) => {                mutations.forEach( ( mutation ) => {                    if ( mutation.type === 'attributes' && visibilityTestDiv.offsetParent !== null ) {                        debouncedTriggerPostRender();                        observer.disconnect();                    }                });            });            observer.observe( document.body, {                attributes: true,                childList: false,                subtree: true,                attributeFilter: [ 'style', 'class' ],            });        } else {            triggerPostRender();        }    } );} );\n<\/script>\n<\/div>\n<\/div>\n<div id=\"content-next\"><!-- scroll anchor --><\/div>\n<h2 class=\"wp-block-heading\">Tax Obligations as a Sole Trader<\/h2>\n\n\n\n<p>As a <a href=\"https:\/\/legalvision.co.nz\/business-structures\/sole-trader-mistakes\/\">sole trader<\/a>, you are personally taxed on your business profits, which is the income remaining after expenses, so it is important to set aside funds to cover your tax obligations. Working with a tax adviser can help you save both time and money.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Income Tax&nbsp;<\/h3>\n\n\n\n<p>As a sole trader, you are taxed on your net profit, that is, your total income minus any allowable business expenses. It is essential to keep detailed and accurate financial records throughout the year to ensure your tax return is correct and to avoid surprises at the end of the year.<\/p>\n\n\n\n<p>In New Zealand, sole traders pay tax at personal income rates, which are progressive, meaning the more you earn, the higher the rate you pay. The top tax rate is 39% for income over $180,000 per year. Sole traders must file an IR3 income tax return each year with Inland Revenue (IRD).<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Provisional Tax&nbsp;<\/h3>\n\n\n\n<p>Provisional tax is not an additional tax. It is a way of managing your <a href=\"https:\/\/legalvision.co.nz\/corporations\/income-tax\/\">income tax<\/a> by paying instalments during the year instead of a lump sum payment at the end of the year. This helps you avoid having to front a large tax bill all at once.&nbsp;<\/p>\n\n\n\n<p>There are four options available to calculate your provisional tax. Your accountant or tax agent can help you choose the most effortless method depending on your circumstances. For example, the standard option is useful if your income is steady or increases over the next year.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">GST<\/h3>\n\n\n\n<p>Most goods and services (including imports) are subject to GST at a rate of 15% of the product price. If you supply goods or services (for example, your labour) and expect to earn more than $60,000 a year, you are required to register for GST. On the other hand, if you are expecting to earn less than $60,000 a year, you can voluntarily register for GST.<\/p>\n\n\n\n<p>Once registered, you must add GST to your prices and include it in your invoices. You can also claim GST on eligible business expenses, helping reduce your overall tax burden. Moreover, you will need to file GST returns with IRD, typically on: <\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>a monthly;<\/li>\n\n\n\n<li>two-monthly; or <\/li>\n\n\n\n<li>six-monthly basis, depending on your turnover. <\/li>\n<\/ul>\n\n\n\n<div  class=\"box box--icon box--info\">\n    <p>Proper record-keeping is essential to stay compliant.<\/p>\n<\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Flat-Rate Tax on Schedular Payments&nbsp;<\/h3>\n\n\n\n<p>Schedular payments are payments made to contractors who perform specific activities. For example:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>builders contracted to a labour-hire business;&nbsp;<\/li>\n\n\n\n<li>freelance journalists paid to write a magazine article; or&nbsp;<\/li>\n\n\n\n<li>contractors working in the horticulture or film sectors.<\/li>\n<\/ul>\n\n\n\n<p>Unlike regular employment income, schedular payments are subject to withholding tax deducted by the payer at specified rates. This simplifies tax collection for these types of engagements. <\/p>\n\n\n\n<div  class=\"box box--icon box--info\">\n    <p>It is important to account for this when managing your tax obligations.<\/p>\n<\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Expenses&nbsp;<\/h3>\n\n\n\n<p>You can reduce your income tax liability at the end of the year by claiming back some of the expenses you incur while carrying out your business activities.<\/p>\n\n\n\n<p>For example, you may be able to claim the costs of running:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>your vehicle for business purposes; or&nbsp;<\/li>\n\n\n\n<li>the area of your family home that you use for work.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Record Keeping&nbsp;<\/h3>\n\n\n\n<p>As a business, you must maintain tax records and keep these for at least seven years from the end of the tax year to which they relate. Whether you are managing your own taxes or getting help from an agent, maintaining records makes it easier to work out your taxes, meet your employer obligations and confirm your accounts.<\/p>\n\n\n\n<p>These requirements can change with updates to government policy. When deciding whether you need to register for GST, always refer to the <a href=\"https:\/\/www.ird.govt.nz\/gst\/what-gst-is\">IRD website<\/a> or talk to your tax advisor.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How to Set Yourself Up as a Sole Trader<\/h2>\n\n\n\n<p>There are several key tasks that you need to do to set yourself up as a sole trader. These include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Choosing a business name and protecting your intellectual property (IP):<\/strong> Check if your preferred business name, web domain, trademark, and social media usernames are available using the free <a href=\"https:\/\/www.business.govt.nz\/onecheck\">OneCheck service<\/a>.<\/li>\n\n\n\n<li><strong>Applying for a <\/strong><a href=\"https:\/\/www.nzbn.govt.nz\/get-an-nzbn\/get-your-nzbn\"><strong>New Zealand Business Number (NZBN)<\/strong><\/a><strong>:<\/strong> You can register for an NZBN at no cost, using your IRD number and proof of identity. Obtaining an NZBN is optional but recommended, as this unique number helps streamline your interactions with government agencies and other businesses.<\/li>\n\n\n\n<li><strong>Setting aside funds for tax obligations:<\/strong> Plan to cover income tax and, if your turnover is expected to exceed $60,000 per year, GST payments.<\/li>\n\n\n\n<li><strong>Registering with Inland Revenue (IRD) as an employer:<\/strong> If you hire staff, including spouses or partners, ensure you complete employer registration and obtain any necessary approvals.<\/li>\n\n\n\n<li><strong>Registering with ACC:<\/strong> Choose the correct business type so ACC can accurately calculate your levies, which cover workplace injuries.<\/li>\n\n\n\n<li><strong>Opening a dedicated business bank account: <\/strong>Keeping your business finances separate from personal accounts helps with clear record-keeping and financial management.<\/li>\n\n\n\n<li><strong>Choosing the right financial management system: <\/strong>Decide on software or tools that suit your business needs to track income, expenses, and tax obligations efficiently.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">What are my Intellectual Property Considerations?<\/h2>\n\n\n\n<p>You should consider your intellectual property requirements if you are operating your business as a sole trader. Your intellectual property may be a significant source of income, so you must know how to protect it. One of the best ways to protect your intellectual property is by copyrighting, trademarking or patenting it. <\/p>\n\n\n\n<div  class=\"box box--icon box--info\">\n    <p>It is also important to note that sole traders cannot advertise using their own name if someone has registered it as a trademark in the same industry.<\/p>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\">Anti-Money Laundering Rules<\/h2>\n\n\n\n<p>You should also consider anti-money laundering rules when you are operating your business as a sole trader. This will only apply if you manage clients&#8217; money or sell real estate. To comply with the new anti-money laundering rules, consider putting someone in charge of anti-money laundering rules and identifying risks to create a compliance programme.&nbsp;<\/p>\n\n\n    <div class=\"my-7 lg:my-10 border-y-2 border-gray-100 py-7 lg:py-10 flex flex-col sm:flex-row items-start gap-10\">\n                    <img decoding=\"async\" class=\"w-52 mx-auto my-0! rounded\" src=\"https:\/\/img.legalvision.com.au\/wp-content\/uploads\/sites\/2\/2021\/10\/21140438\/NZ-Startup-Manual-251x360-2.png\" alt=\"Front page of publication\"\n                 loading=\"lazy\" width=\"208\" height=\"298\">\n                <section>\n            <div class=\"text-2xl font-bold\">NZ Startup Manual: A Legal Handbook For Founders<\/div>\n            <div class=\"body-text\">\n                <p>Essential reading for anyone building their startup. This free guide includes practical advice and seven real-life case studies.<\/p>\n            <\/div>\n            \n\n<a href=\"https:\/\/go.legalvision.co.nz\/NZ-Startup-Manual.html\" class=\" block px-5 py-3.5 max-w-fit bg-orange button__hover transition rounded text-white font-bold text-lg no-underline uppercase leading-tight text-center\" target=\"\" rel=\"\">Download Now<\/a>        <\/section>\n    <\/div>\n\n\n\n\n<h2 class=\"wp-block-heading\">Key Takeaways<\/h2>\n\n\n\n<p>Setting up and running your business as a sole trader in New Zealand is relatively easy and cost-effective. However, before choosing a structure, consider whether this is the best outcome for you by considering the legal and financial implications. Importantly, although a sole trader business structure can save you time and money, it can also have some drawbacks. You will need to plan ahead and consider your future needs to determine the best way to set up your business. Finally, sole traders must follow a range of tax obligations. This means that you may need to set aside funds to pay your taxes at the end of the year.\u00a0<\/p>\n\n\n\n<p>LegalVision provides ongoing legal support for New Zealand businesses through our fixed-fee legal membership. Our experienced lawyers help businesses manage contracts, employment law, disputes, intellectual property and more, with unlimited access to specialist lawyers for a fixed monthly fee. To learn more about LegalVision\u2019s legal membership, call <a href=\"tel:+64800005570\" class=\"AVANSERnumber dynamic-number\">0800 005 570<\/a> or <a href=\"https:\/\/legalvision.co.nz\/membership\/\" target=\"_blank\" rel=\"noreferrer noopener\">visit our membership page<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Frequently Asked Questions<\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1670367242847\"><strong class=\"schema-faq-question\"><strong>What is the difference between being a sole trader and being self-employed?<\/strong><\/strong> <p class=\"schema-faq-answer\">Many self-employed people are also sole traders. This is because many people who are not employed by somebody else choose to register their business under a sole trader structure. For example, freelance writers or designers are often self-employed under a sole trader structure. However, it is also possible to be self-employed without being a sole trader if you have registered your business as a company.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1670367252603\"><strong class=\"schema-faq-question\"><strong>Is it better to be a sole trader or a company?<\/strong><\/strong> <p class=\"schema-faq-answer\">This will depend on your specific circumstances and business plans. Being a sole trader is beneficial because the start-up costs are low, you are entitled to many government benefits, and you can offset any losses against other income streams. It is also easier to set up because you do not need to register with regulatory authorities like a company. However, unlike companies, as a sole trader, you may be putting your personal assets at risk. Furthermore, it can also be harder to get a loan, raise capital or sell your business.<\/p> <\/div> <\/div>\n<div class=\"not-prose m-feedback-prompt\">\n    <!-- Thumbs up\/down bar -->\n    <div class=\"m-feedback-prompt__main\">\n        <div class=\"m-feedback-prompt__title\">Was this article helpful?<\/div>\n        <div>\n            <!--span class=\"m-feedback-prompt__button--text\">Thanks!<\/span-->\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--yes\"\n                    data-analytics-link=\"feedback-prompt:yes\" aria-label=\"Agree\">\n                <i class=\"fa-regular fa-thumbs-up fa-3x\"><\/i>\n            <\/button>\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--no\"\n                    data-analytics-link=\"feedback-prompt:no\" aria-label=\"Disagree\">\n                <i class=\"fa-regular fa-thumbs-down fa-3x\"><\/i>\n            <\/button>\n        <\/div>\n    <\/div>\n\n    <!-- Feedback form -->\n    <div class=\"m-feedback-prompt__form\">\n        <div class=\"m-feedback-prompt__form--thanks \">\n            <div>Thanks!<\/div>\n            <p>\n                We appreciate your feedback \u2013 your submission has been successfully received.            <\/p>\n        <\/div>\n        <form id=\"contact-form\" class=\"m-feedback-prompt__form--form\" action=\"\" method=\"post\">\n            <input type=\"hidden\" id=\"authenticity_token\" name=\"authenticity_token\" value=\"ed19fd34f0\" \/><input type=\"hidden\" name=\"_wp_http_referer\" value=\"\/api\/wp\/v2\/posts\/961\" \/>            <input value=\"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/\" type=\"hidden\" name=\"currenturl\"\n                   id=\"currenturl\">\n            <input value=\"Operating My NZ Business as a Sole Trader\" type=\"hidden\" name=\"currenttitle\"\n                   id=\"currenttitle\">\n            <label>\n                <!-- display on thumbs-up -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--yes\">\n                    Can you tell us <span class=\"font-semibold\">why<\/span> you found it helpful?\n                <\/span>\n\n                <!-- display on thumbs-down -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--no text-lg\">\n                    How can we better improve this article?\n                <\/span>\n                <textarea name=\"feedbackmessage\" id=\"feedbackmessage\" required><\/textarea>\n            <\/label>\n\n            <div class=\"m-feedback-prompt__form--error\" id=\"form-submit-error\"><\/div>\n            <button id=\"submit-contact-form-button\" type=\"submit\" name=\"commit\" class=\"m-feedback-prompt__form--submit\"\n                    data-analytics-link=\"feedback-prompt:submit\">\n                Submit            <\/button>\n        <\/form>\n    <\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>If you are considering starting your own business, you should consider which business structure best suits your needs. Operating as a sole trader is one of the most common structures in New Zealand because it is easy and cheap to set up and run. Before choosing this structure, you should consider: This article explains the<a href=\"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/\">Continue reading <span class=\"sr-only\">&#8220;Operating My NZ Business as a Sole Trader&#8221;<\/span><\/a><\/p>\n","protected":false},"author":13550,"featured_media":215606,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"1076,1378,210611,204157,217084,153","_relevanssi_noindex_reason":"","editor_notices":[],"footnotes":""},"categories":[4],"tags":[24,25,46,110],"class_list":["post-961","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-structures","tag-startup","tag-small-business","tag-tax","tag-sole-trader"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.1.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Operating a Business as a Sole Trader | LegalVision New Zealand<\/title>\n<meta name=\"description\" content=\"This article explains the pros and cons of running your business as a sole trader, including some legal and financial implications.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Operating a Business as a Sole Trader | LegalVision New Zealand\" \/>\n<meta property=\"og:description\" content=\"This article explains the pros and cons of running your business as a sole trader, including some legal and financial implications.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/\" \/>\n<meta property=\"og:site_name\" content=\"LegalVision New Zealand\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/LegalVision\" \/>\n<meta property=\"article:published_time\" content=\"2020-12-08T13:44:14+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2026-01-16T01:59:30+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/img.legalvision.com.au\/wp-content\/uploads\/sites\/2\/2022\/05\/25002115\/business-image-0522172.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"875\" \/>\n\t<meta property=\"og:image:height\" content=\"584\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Samira Suleiman\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@LegalVision_law\" \/>\n<meta name=\"twitter:site\" content=\"@LegalVision_law\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Samira Suleiman\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"8 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/\"},\"author\":{\"name\":\"Samira Suleiman\",\"@id\":\"https:\/\/legalvision.co.nz\/#\/schema\/person\/456b80bab4451bc8a1e9b11ed26ec88f\"},\"headline\":\"Operating My NZ Business as a Sole Trader\",\"datePublished\":\"2020-12-08T13:44:14+00:00\",\"dateModified\":\"2026-01-16T01:59:30+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/\"},\"wordCount\":1773,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/legalvision.co.nz\/#organization\"},\"image\":{\"@id\":\"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/img.legalvision.com.au\/wp-content\/uploads\/sites\/2\/2022\/05\/25002115\/business-image-0522172.jpg\",\"keywords\":[\"startup\",\"small business\",\"tax\",\"sole trader\"],\"articleSection\":[\"Business Structuring Articles\"],\"inLanguage\":\"en-NZ\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/#respond\"]}]},{\"@type\":[\"WebPage\",\"FAQPage\"],\"@id\":\"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/\",\"url\":\"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/\",\"name\":\"Operating a Business as a Sole Trader | LegalVision New Zealand\",\"isPartOf\":{\"@id\":\"https:\/\/legalvision.co.nz\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/img.legalvision.com.au\/wp-content\/uploads\/sites\/2\/2022\/05\/25002115\/business-image-0522172.jpg\",\"datePublished\":\"2020-12-08T13:44:14+00:00\",\"dateModified\":\"2026-01-16T01:59:30+00:00\",\"description\":\"This article explains the pros and cons of running your business as a sole trader, including some legal and financial implications.\",\"breadcrumb\":{\"@id\":\"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/#breadcrumb\"},\"mainEntity\":[{\"@id\":\"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/#faq-question-1670367242847\"},{\"@id\":\"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/#faq-question-1670367252603\"}],\"inLanguage\":\"en-NZ\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-NZ\",\"@id\":\"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/#primaryimage\",\"url\":\"https:\/\/img.legalvision.com.au\/wp-content\/uploads\/sites\/2\/2022\/05\/25002115\/business-image-0522172.jpg\",\"contentUrl\":\"https:\/\/img.legalvision.com.au\/wp-content\/uploads\/sites\/2\/2022\/05\/25002115\/business-image-0522172.jpg\",\"width\":875,\"height\":584,\"caption\":\"Navigating Regulatory Challenges for Startups | LegalVision NZ\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/legalvision.co.nz\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Articles\",\"item\":\"https:\/\/legalvision.co.nz\/articles\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"Business Structuring Articles\",\"item\":\"https:\/\/legalvision.co.nz\/category\/business-structures\/\"},{\"@type\":\"ListItem\",\"position\":4,\"name\":\"Operating My NZ Business as a Sole Trader\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/legalvision.co.nz\/#website\",\"url\":\"https:\/\/legalvision.co.nz\/\",\"name\":\"LegalVision New Zealand\",\"description\":\"LegalVision is a commercial law firm in NZ with a commitment to innovation\",\"publisher\":{\"@id\":\"https:\/\/legalvision.co.nz\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/legalvision.co.nz\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-NZ\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/legalvision.co.nz\/#organization\",\"name\":\"LegalVision New Zealand\",\"url\":\"https:\/\/legalvision.co.nz\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-NZ\",\"@id\":\"https:\/\/legalvision.co.nz\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/legalvision.co.nz\/wp-content\/uploads\/sites\/2\/2020\/11\/LegalVision_square_logo.png\",\"contentUrl\":\"https:\/\/legalvision.co.nz\/wp-content\/uploads\/sites\/2\/2020\/11\/LegalVision_square_logo.png\",\"width\":400,\"height\":400,\"caption\":\"LegalVision New Zealand\"},\"image\":{\"@id\":\"https:\/\/legalvision.co.nz\/#\/schema\/logo\/image\/\"},\"sameAs\":[\"https:\/\/www.facebook.com\/LegalVision\",\"https:\/\/x.com\/LegalVision_law\",\"https:\/\/www.linkedin.com\/company\/legalvision-group\"]},{\"@type\":\"Person\",\"@id\":\"https:\/\/legalvision.co.nz\/#\/schema\/person\/456b80bab4451bc8a1e9b11ed26ec88f\",\"name\":\"Samira Suleiman\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-NZ\",\"@id\":\"https:\/\/legalvision.co.nz\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/legalvision.co.nz\/wp-content\/uploads\/sites\/2\/2025\/04\/Samira-Suleiman--96x96.jpg\",\"contentUrl\":\"https:\/\/legalvision.co.nz\/wp-content\/uploads\/sites\/2\/2025\/04\/Samira-Suleiman--96x96.jpg\",\"caption\":\"Samira Suleiman\"},\"url\":\"https:\/\/legalvision.co.nz\/author\/samirasuleiman\/\"},{\"@type\":\"Question\",\"@id\":\"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/#faq-question-1670367242847\",\"name\":\"What is the difference between being a sole trader and being self-employed?\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"Many self-employed people are also sole traders. This is because many people who are not employed by somebody else choose to register their business under a sole trader structure. For example, freelance writers or designers are often self-employed under a sole trader structure. However, it is also possible to be self-employed without being a sole trader if you have registered your business as a company.\",\"inLanguage\":\"en-NZ\"},\"inLanguage\":\"en-NZ\"},{\"@type\":\"Question\",\"@id\":\"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/#faq-question-1670367252603\",\"name\":\"Is it better to be a sole trader or a company?\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"This will depend on your specific circumstances and business plans. Being a sole trader is beneficial because the start-up costs are low, you are entitled to many government benefits, and you can offset any losses against other income streams. It is also easier to set up because you do not need to register with regulatory authorities like a company. However, unlike companies, as a sole trader, you may be putting your personal assets at risk. Furthermore, it can also be harder to get a loan, raise capital or sell your business.\",\"inLanguage\":\"en-NZ\"},\"inLanguage\":\"en-NZ\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Operating a Business as a Sole Trader | LegalVision New Zealand","description":"This article explains the pros and cons of running your business as a sole trader, including some legal and financial implications.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/","og_locale":"en_US","og_type":"article","og_title":"Operating a Business as a Sole Trader | LegalVision New Zealand","og_description":"This article explains the pros and cons of running your business as a sole trader, including some legal and financial implications.","og_url":"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/","og_site_name":"LegalVision New Zealand","article_publisher":"https:\/\/www.facebook.com\/LegalVision","article_published_time":"2020-12-08T13:44:14+00:00","article_modified_time":"2026-01-16T01:59:30+00:00","og_image":[{"width":875,"height":584,"url":"https:\/\/img.legalvision.com.au\/wp-content\/uploads\/sites\/2\/2022\/05\/25002115\/business-image-0522172.jpg","type":"image\/jpeg"}],"author":"Samira Suleiman","twitter_card":"summary_large_image","twitter_creator":"@LegalVision_law","twitter_site":"@LegalVision_law","twitter_misc":{"Written by":"Samira Suleiman","Est. reading time":"8 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/#article","isPartOf":{"@id":"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/"},"author":{"name":"Samira Suleiman","@id":"https:\/\/legalvision.co.nz\/#\/schema\/person\/456b80bab4451bc8a1e9b11ed26ec88f"},"headline":"Operating My NZ Business as a Sole Trader","datePublished":"2020-12-08T13:44:14+00:00","dateModified":"2026-01-16T01:59:30+00:00","mainEntityOfPage":{"@id":"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/"},"wordCount":1773,"commentCount":0,"publisher":{"@id":"https:\/\/legalvision.co.nz\/#organization"},"image":{"@id":"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/#primaryimage"},"thumbnailUrl":"https:\/\/img.legalvision.com.au\/wp-content\/uploads\/sites\/2\/2022\/05\/25002115\/business-image-0522172.jpg","keywords":["startup","small business","tax","sole trader"],"articleSection":["Business Structuring Articles"],"inLanguage":"en-NZ","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/#respond"]}]},{"@type":["WebPage","FAQPage"],"@id":"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/","url":"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/","name":"Operating a Business as a Sole Trader | LegalVision New Zealand","isPartOf":{"@id":"https:\/\/legalvision.co.nz\/#website"},"primaryImageOfPage":{"@id":"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/#primaryimage"},"image":{"@id":"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/#primaryimage"},"thumbnailUrl":"https:\/\/img.legalvision.com.au\/wp-content\/uploads\/sites\/2\/2022\/05\/25002115\/business-image-0522172.jpg","datePublished":"2020-12-08T13:44:14+00:00","dateModified":"2026-01-16T01:59:30+00:00","description":"This article explains the pros and cons of running your business as a sole trader, including some legal and financial implications.","breadcrumb":{"@id":"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/#breadcrumb"},"mainEntity":[{"@id":"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/#faq-question-1670367242847"},{"@id":"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/#faq-question-1670367252603"}],"inLanguage":"en-NZ","potentialAction":[{"@type":"ReadAction","target":["https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/"]}]},{"@type":"ImageObject","inLanguage":"en-NZ","@id":"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/#primaryimage","url":"https:\/\/img.legalvision.com.au\/wp-content\/uploads\/sites\/2\/2022\/05\/25002115\/business-image-0522172.jpg","contentUrl":"https:\/\/img.legalvision.com.au\/wp-content\/uploads\/sites\/2\/2022\/05\/25002115\/business-image-0522172.jpg","width":875,"height":584,"caption":"Navigating Regulatory Challenges for Startups | LegalVision NZ"},{"@type":"BreadcrumbList","@id":"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/legalvision.co.nz\/"},{"@type":"ListItem","position":2,"name":"Articles","item":"https:\/\/legalvision.co.nz\/articles\/"},{"@type":"ListItem","position":3,"name":"Business Structuring Articles","item":"https:\/\/legalvision.co.nz\/category\/business-structures\/"},{"@type":"ListItem","position":4,"name":"Operating My NZ Business as a Sole Trader"}]},{"@type":"WebSite","@id":"https:\/\/legalvision.co.nz\/#website","url":"https:\/\/legalvision.co.nz\/","name":"LegalVision New Zealand","description":"LegalVision is a commercial law firm in NZ with a commitment to innovation","publisher":{"@id":"https:\/\/legalvision.co.nz\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/legalvision.co.nz\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-NZ"},{"@type":"Organization","@id":"https:\/\/legalvision.co.nz\/#organization","name":"LegalVision New Zealand","url":"https:\/\/legalvision.co.nz\/","logo":{"@type":"ImageObject","inLanguage":"en-NZ","@id":"https:\/\/legalvision.co.nz\/#\/schema\/logo\/image\/","url":"https:\/\/legalvision.co.nz\/wp-content\/uploads\/sites\/2\/2020\/11\/LegalVision_square_logo.png","contentUrl":"https:\/\/legalvision.co.nz\/wp-content\/uploads\/sites\/2\/2020\/11\/LegalVision_square_logo.png","width":400,"height":400,"caption":"LegalVision New Zealand"},"image":{"@id":"https:\/\/legalvision.co.nz\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/LegalVision","https:\/\/x.com\/LegalVision_law","https:\/\/www.linkedin.com\/company\/legalvision-group"]},{"@type":"Person","@id":"https:\/\/legalvision.co.nz\/#\/schema\/person\/456b80bab4451bc8a1e9b11ed26ec88f","name":"Samira Suleiman","image":{"@type":"ImageObject","inLanguage":"en-NZ","@id":"https:\/\/legalvision.co.nz\/#\/schema\/person\/image\/","url":"https:\/\/legalvision.co.nz\/wp-content\/uploads\/sites\/2\/2025\/04\/Samira-Suleiman--96x96.jpg","contentUrl":"https:\/\/legalvision.co.nz\/wp-content\/uploads\/sites\/2\/2025\/04\/Samira-Suleiman--96x96.jpg","caption":"Samira Suleiman"},"url":"https:\/\/legalvision.co.nz\/author\/samirasuleiman\/"},{"@type":"Question","@id":"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/#faq-question-1670367242847","name":"What is the difference between being a sole trader and being self-employed?","acceptedAnswer":{"@type":"Answer","text":"Many self-employed people are also sole traders. This is because many people who are not employed by somebody else choose to register their business under a sole trader structure. For example, freelance writers or designers are often self-employed under a sole trader structure. However, it is also possible to be self-employed without being a sole trader if you have registered your business as a company.","inLanguage":"en-NZ"},"inLanguage":"en-NZ"},{"@type":"Question","@id":"https:\/\/legalvision.co.nz\/business-structures\/operate-business-as-sole-trader-new-zealand\/#faq-question-1670367252603","name":"Is it better to be a sole trader or a company?","acceptedAnswer":{"@type":"Answer","text":"This will depend on your specific circumstances and business plans. Being a sole trader is beneficial because the start-up costs are low, you are entitled to many government benefits, and you can offset any losses against other income streams. It is also easier to set up because you do not need to register with regulatory authorities like a company. However, unlike companies, as a sole trader, you may be putting your personal assets at risk. Furthermore, it can also be harder to get a loan, raise capital or sell your business.","inLanguage":"en-NZ"},"inLanguage":"en-NZ"}]}},"_links":{"self":[{"href":"https:\/\/legalvision.co.nz\/api\/wp\/v2\/posts\/961","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/legalvision.co.nz\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/legalvision.co.nz\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/legalvision.co.nz\/api\/wp\/v2\/users\/13550"}],"replies":[{"embeddable":true,"href":"https:\/\/legalvision.co.nz\/api\/wp\/v2\/comments?post=961"}],"version-history":[{"count":15,"href":"https:\/\/legalvision.co.nz\/api\/wp\/v2\/posts\/961\/revisions"}],"predecessor-version":[{"id":229811,"href":"https:\/\/legalvision.co.nz\/api\/wp\/v2\/posts\/961\/revisions\/229811"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/legalvision.co.nz\/api\/wp\/v2\/media\/215606"}],"wp:attachment":[{"href":"https:\/\/legalvision.co.nz\/api\/wp\/v2\/media?parent=961"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legalvision.co.nz\/api\/wp\/v2\/categories?post=961"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legalvision.co.nz\/api\/wp\/v2\/tags?post=961"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}