How does GST apply to entertainment expenses in NZ?

If the entertainment is 100% income tax deductible (e.g. light meals at a board meeting, conference catering, overseas entertainment), you can claim 100% of the GST. If the entertainment is only 50% deductible (client lunches, Christmas parties, corporate boxes), you can initially claim 100% of the GST during the year and then make a year-end adjustment to pay back GST on the 50% non-deductible portion. Most businesses make this adjustment in their March GST return.

What entertainment is 50% deductible?

50% deductible entertainment includes: meals and drinks at restaurants with clients or staff, Christmas parties, year-end social events, food and drink at corporate boxes or yachts, gifts of food and drink (wine, hampers), social events at the office for staff, and entertainment with a 'significant private element'. The 50% rule applies even if you think the private element was more or less than 50% - it's a fixed statutory split.

What entertainment is 100% deductible?

100% deductible entertainment includes: light meals at board meetings or for senior managers consumed as part of duties, food and drink at conferences lasting 4+ hours, meals while travelling on business (unless with a client), entertainment that promotes the business and is open to the public, freebies and trade displays, samples for advertising, entertainment provided in the ordinary course of business (restaurant providing meals), and ALL entertainment enjoyed outside New Zealand.

How do I make the GST adjustment for 50% deductible entertainment?

Add up all the GST you claimed on 50% deductible entertainment during the year. Multiply by 50% to get the non-deductible portion of the GST. Add this amount to box 9 (adjustments) of your GST return for the period that includes your income tax balance date (typically March). For example, $1,000 of GST claimed on entertainment during the year produces a $500 GST adjustment in your March return.

GST on Entertainment Calculator NZ 2026

NZ entertainment expenses are either 50% or 100% deductible under the Income Tax Act, and the GST treatment mirrors the income tax split. This calculator categorises your entertainment expense, calculates the GST claim, and works out the year-end GST adjustment for 50% non-deductible items. Use it before you book that client dinner or Christmas party so you know the actual after-tax cost.

Updated April 2026 Implements sections DD 1-4 of the Income Tax Act 2007 and IR268 IRD entertainment expense guide.

The 50% / 100% rule

NZ tax law separates entertainment into two categories. Some entertainment is fully deductible (no private element, business benefit only). Other entertainment is treated as having a "significant private element" and only 50% is deductible regardless of the actual private content. The same split applies to GST: you claim full GST on 100% deductible items, and effectively half on 50% deductible items.

Common 50% deductible categories

Client lunches and dinners at restaurants
Staff parties and social events (Christmas parties, year-end functions)
Corporate boxes at sporting/cultural events
Yachts and pleasure craft
Food and drink gifts to clients (wine, hampers)
Social events held in areas reserved for senior staff

Common 100% deductible categories

Light meals at board meetings or for senior managers consumed as part of duties
Food and drink at conferences/training of 4+ hours
Meals while travelling on business (alone)
Trade displays and promotional events open to the public
Freebies and samples for advertising
Entertainment provided in the ordinary course of business
ALL entertainment enjoyed outside NZ (a true loophole)

The GST adjustment mechanic

For 50% deductible items, you have two options for GST: (1) only claim half the GST in the period of expenditure, or (2) claim the full GST in the period and make a single annual adjustment paying back 50% in your March (or year-end) GST return. Method 2 is more common because it's simpler to track.

Sources

Related calculators

GST Calculator — standard 15% GST
FBT Entertainment Decision Tool — for benefits to specific employees
FBT De Minimis Calculator — staff gifts under $300
Business GST Calculator — full business GST workflow

Total cost (GST inclusive)	$0
GST component (3/23)	$0
GST-exclusive amount	$0
Deductibility	100%
GST claimable in your GST return	$0
Income tax deductible amount	$0
Year-end GST adjustment required?	$0