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Income tax and GST treatment of koha

E aku nui, e aku rahi, tēnā koutou katoa

Koha is sometimes given as a payment of money or by providing goods or services. It's given without any expectation on the part of the person receiving it. Although the term koha is used to describe these payments, the tax treatment of koha is assessed on a case by case basis depending on the type of payment.

Income tax and koha

These are guidelines only as the income tax treatment of koha depends on the situation. Generally a payment (koha) isn't liable for income tax if it's classed as a gift. That is, if:

  • it is made voluntarily
  • the payer doesn't receive a benefit or advantage in return
  • it's not made so that it is income to the person receiving it.

These examples outline the income tax treatment of koha.

Marae committee provides overnight accommodation

A marae committee provides overnight accommodation on the marae for tourists at a set cost per person. This is a service and payments received by the marae will be taxable income.

Marae committee lets wedding party walk across marae grounds

A marae committee agrees to let an American couple and their wedding party walk across their marae grounds to access a beach to take their wedding photos. No charge is made by the committee. The couple leave a sum of money in appreciation. This is a gift and not taxable income to the marae.

Mother provides food and other goods instead of kōhanga reo fees

A kōhanga reo charges fees for children to attend. A mother provides food and other goods instead of paying fees for her child. The value of the food and goods is taxable income to the kōhanga reo.

Another parent at the kōhanga reo has paid the fees for their child, but has a surplus of vegetables from their garden. They give these to the kōhanga reo, which provides lunches for the children. This is a gift and not taxable income.

Waka ama group rents outrigger canoes to the public

A waka ama group owns outrigger canoes which it rents commercially to the public. The rent is taxable income.

Situations that may change the tax status of a group

A marae or kōhanga reo registered as a charitable organisation with the Charities Services is exempt from paying income tax.

Find out more about charitable organisations

A marae or kōhanga reo approved by Inland Revenue as a non-profit organisation qualifies for a $1,000 deduction from the taxable income it receives.

Find out more about the non-profit organisations $1,000 income deduction

A waka ama group can be approved as a sporting body which is exempt from paying income tax

Find out more about sports clubs

GST and koha

The GST treatment on any payment depends on whether it's an unconditional gift or not. An unconditional gift is a voluntary payment to a non-profit body where the person making the payment doesn't receive any direct benefit from it in the form of goods or services.

If the payment isn't an unconditional gift it will be subject to GST.

Find out what income is liable for GST and income tax

These examples are based on a marae being a non-profit body registered for GST. The term koha here can mean money, goods or services.

Group gives koha to the tangata whenua

A group of people arrange to stay on a marae for a couple of nights at no charge by the marae. The group gives a koha to the tangata whenua at the pōwhiri.

The koha is an unconditional gift and is not liable for GST.

Ex-All Black presents personal cheque after speech

An ex-All Black is invited to speak to the taiohi on a marae, which is running a taiohi programme. The ex-All Black at the end of his speech presents a personal cheque to the marae to go toward the taiohi programme. The cheque's not a payment for goods or services supplied by the marae so is an unconditional gift not subject to GST.

Company holds staff workshop on a marae

A company holds a two-day staff workshop for thirty people on a marae. The marae charges a fee of $50 per person per day. The marae must charge GST, because the money is paid for the goods and services supplied by the marae. The marae can claim GST on all goods and services they purchase to host this workshop.

Participants give a koha after staff workshop

After the workshop (in the example above) some of the participants give a koha to the marae in appreciation of the hospitality shown. As this koha is not for goods and services supplied and gives no direct benefit to the payers/giver, it is an unconditional gift and not subject to GST.


If a marae isn't registered for GST, it can't charge GST for any goods and services supplied by the marae and can't claim GST back on goods and services they pay for.

Payments by members of a marae

When a member of a marae gives money, goods or a service (koha) to their marae and expects nothing in return, then it's not subject to GST or liable for income tax. When something is given in return, however, such as a koha for the use of a marae building for a 21st celebration, then the payment is subject to GST and is taxable income to the marae

Examples of payments by members of a marae

If ... then GST and income tax is ...
money is given to the bereaved family and/or the marae committee at a tangihanga not payable
money is given to the bereaved family and/or marae committee at a hura kōhatu (unveiling of a headstone) not payable
money is given to the married couple and/or the marae committee at a mārena by wedding guests not payable
koha is given to the marae committee to assist with paying for a building meeting house or church not payable
visitors on a marae take a collection to donate to the marae committee not payable
a government department has an agency on a marae with no charge, but gives a cheque anyway - see "Note" below payable
tourists are shown around a marae and are charged a fee payable
tourists give a donation not payable
a fund-raising activity is undertaken by the marae committee payable
a marae building is made available for a function (birthday party, wedding anniversary etc) in exchange for a koha payable



Funds given by the Crown or a Government department are not classed as a gift

Reimbursement of expenses

Payments of money, goods or services (koha) are sometimes provided to individuals who have provided the payer with a service as reimbursement for costs that they have incurred.

Examples of such reimbursements may be:

  • the cost of travel to attend a hui (petrol, oil, parking fees, passenger fares, meals),
  • or
  • administration costs for voluntary work done at home (phone calls, faxes, stationery, printing).

The tax treatment of these reimbursements will vary depending on the reason, nature of the expense and the relationship between the payer and payee. Generally, a reimbursement of the actual cost incurred by the payee in providing a service will not incur liability for PAYE/ schedular payments.

If the person being reimbursed is self-employed, PAYE/withholding tax doesn't have to be deducted, but the excess payment is income and should be considered by them as self-employed income.

Examples where reimbursement isn't taxable income

Kaumatua and kuia are asked to accompany a group to a hui

They act in the traditional roles of kaumatua and kaikaranga. They use their own vehicle to travel to and from the venue. So they're not out of pocket, the group gives a payment to the kaumatua and kuia for their actual travel costs. These payments are a reimbursement of actual expenses not income to the kaumatua and kuia, so tax doesn't need to be deducted.


Records should be kept of the expenses and payments made. Any amount paid over the actual expenses incurred would be classed as income and is taxable.

Calculate employee reimbursement of travel expenses


Kaumatua, a retired fisherman, gives a talk to children at a kura

The kaumatua lives 20km away so the kura makes a payment to him to cover his actual petrol costs for this travel. These payments are a reimbursement of actual expenses not income to the kaumatua and kuia, so tax doesn't need to be deducted.

Examples where payments are taxable income

Kaumatua provides cultural support to a bereaved whānau

The kaumatua provides the support at a three day tangi. The whānau gives the kaumatua a payment of $150. This payment is taxable income to the kaumatua, because a service has been provide by the kaumatua to the whānau.

Farmer provides meat to marae gathering and receives a payment

The marae pays $200 for the food provided. This is a payment for goods to the marae and is taxable income that should be returned by farmer as self-employed income. The marae doesn't deduct any income tax.

In most cases where money, goods or vouchers are given to someone for any work they've done then PAYE should be deducted from the payment, the value of vouchers or goods that are given instead.

Find out about deducting PAYE

Some situations where tax is deducted

Person mows lawns and does general maintenance work for kōhanga reo

All products used to complete the work are paid for or owned by the kōhanga reo, petrol, paint, wood, lawn mower etc. The kōhanga reo decides to pay the person for what they have done. This isn't a donation because the payment is for services provided, similar to an employee so the payment is income to the recipient.

Kuia on NZ Super helps at a community centre for two days a week

She doesn't want to receive any payments because it might affect her tax. The community centre wants to give her something for helping so they give her grocery vouchers. These are still classed as income so the community centre pays PAYE on the value of the vouchers and records this in the wage records as net earnings. The value of the vouchers are income and will affect the kuia taxes.

Organisation pays treasurer for work done over the past three years

There was no agreement for any honorarium payment to be made and no expectation by the treasurer of payment for services. This is taxable income to the treasurer and withholding tax must be deducted and paid to Inland Revenue.

Find out about deducting withholding tax

Māori trust board pays its board members an attendance fee

The fee or honorarium is to cover costs for its members to attend their monthly meetings. The honorarium is $100 per meeting. Withholding tax must be deducted in this case. Members must keep records of the actual expenses of attending the meeting, so they can claim them when putting in their income tax return at the end of the year. Members will also have to pay their own ACC levies.

Find out about deducting withholding tax

A payment such as an honorarium can be partly for services provided (taxable) and partly for reimbursement of expenses (non-taxable) for more information on taxing payments to volunteers

Find out more about honoraria

Find out more about PAYE, withholding tax and other deductions

Find out more

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Other useful information
GST registration
Employers responsibilities
Charitable organisations
Non-profit organisations $1,000 income deduction