NZ Agency Chart of Accounts for Xero: Imported Services + Contractors

An agency’s costs are mostly people and software, and a surprising share of the software comes from overseas. That makes the two questions worth getting right: when an offshore supplier’s charge attracts New Zealand GST, and when a contractor’s pay is a schedular payment with tax withheld at source. This is a New Zealand agency chart of accounts for Xero built around those, as a readable reference CSV and a Xero import CSV.

Offshore software and the reverse charge

Most agencies buy at least some tools from suppliers outside New Zealand. If the overseas vendor is not registered for New Zealand GST, no GST is charged, and you code the cost on software subscriptions as Zero Rated. The reverse charge under section 8(4B) only bites when a GST-registered business makes more than a minimal level of exempt or other non-taxable supplies; a fully taxable agency is generally outside it. The chart leaves software defaulting to 15% GST on Expenses for local vendors and lists Zero Rated as the common alternative, with a note that a practice carrying exempt income (for example, financial services) may need to self-account. That nuance is exactly the kind of thing a generic chart glosses over.

Contractors and schedular payments

Agencies lean on freelancers and contractors, so the chart adds a contractor and freelancer costs account. Some of those payments are schedular payments, where the activity is a listed one and the payer withholds tax at source. The contractor completes an IR330C and chooses a rate; the standard rate applies if none is chosen. The note prompts you to check whether the work is a listed activity before paying in full, so the withholding is not missed.

Home office, apportioned

Many consultants work partly from home. The home office account defaults to 15% GST on Expenses but carries No GST as an alternative, because parts of a home office claim (mortgage interest, for instance) carry no GST. You either apportion actual costs by floor area and time or use Inland Revenue’s square-metre rate; either way the account keeps the claim in one place rather than smeared across utilities and rent.

Recharged client costs and memberships

Two more accounts keep agency life tidy: client costs recharged for disbursements paid on a client’s behalf and billed back, tracked so both sides are visible, and professional memberships for the industry bodies and subscriptions that creative and consulting firms carry. Both are standard-rated at 15% for New Zealand suppliers. Where a project is billed as a single fixed fee, the whole supply is standard-rated at 15%; only true disbursements paid for the client and recharged at cost belong in the recharge account, which keeps your fee income from being understated.

How to use it

1. Open the CSV: each account shows its class, default Xero GST code, the alternatives, and a note. The contractor, home office and recharge accounts are the agency additions.
2. In Xero go to Accounting, then Chart of accounts, then Import, and upload the CSV into a demo organisation first.
3. Confirm the New Zealand GST rates exist in your organisation.
4. Decide how offshore subscriptions are coded so the team is consistent on the Zero Rated treatment.

The recurring work is coding each cost correctly as the bills arrive:

• Hubdoc pulls recurring software and supplier invoices into the file.
• ExpenseFlow reads each receipt and bill, applies the right New Zealand GST treatment including the zero-rated overseas software case, and posts it into Xero against the correct account, so offshore subscriptions and contractor costs are coded right at capture.
• Dext applies supplier rules for repeat subscriptions.

On QuickBooks instead? See the NZ agency chart of accounts for QuickBooks. For the detail on imported services and schedular payments, see the New Zealand agency expenses guide.