How NZ charities actually report: reporting tiers, audit and review

Key findings

• The 2024 Tier 3 ceiling rise is already visible. Filings that moved from Tier 2 to Tier 3 with total expenses of $2M–$5M averaged 6 a year in FY2017–FY2023, then 113 in FY2024 and 136 in FY2025.
• Most Tier 2 filers in the $2M–$5M band have not moved yet. Of 843 charities whose latest return (period ending on or after 28 March 2024) shows $2M–$5M of expenses, 513 (61%) filed at Tier 3 and 322 (38%) still at Tier 2. Of 525 Tier 2 filers whose first return under the new thresholds was in that band, 118 switched to Tier 3 straight away.
• The $30M–$33M band is tiny. 19 charities' latest returns fall there (12 at Tier 2, 7 at Tier 1), and 0 Tier 1 → Tier 2 moves in that band have been filed since the change.
• Filing below the size-required tier is rare; filing above it is common. Each year only a handful of returns sit at Tier 3 or 4 while expenses were over the Tier 3 ceiling in that and both preceding periods. Around 2,683 Tier 3 returns a year come from charities whose total expenses were under the Tier 4 limit in all three periods.
• Tier 1 filings by very small charities jumped in FY2025. Tier 1 returns reporting under $550,000 of expenses averaged 48 a year to FY2024, then 239 in FY2025; 172 of those charities filed at Tier 4 the year before. That pattern looks more like a recording issue than a choice of Tier 1 standards, and may be worth a check against the filed performance reports.
• Assurance often comes from a charity's own rules, not the Act. In FY2023, 42% of 7,995 Tier 1–3 returns under the statutory review threshold said their own rules require an audit or review, and 325 of those said the report was not audited or reviewed.

The thresholds, period by period

Every comparison on this page uses the threshold in force for that return's period, not today's.

1. Filed reporting tier by financial year

The tier each return was filed under, as recorded on the register. Financial year is the calendar year of the balance date. FY2026 is still being filed (returns are due six months after balance date).

"No tier" is mostly FY2016 returns for periods that began before 1 April 2015, recorded as "Not Applicable (Pre 1-Apr-2016)".

2. Filed tier against size

A return counts as filed below or above its size only when total expenses were on the same side of the threshold in that period and both preceding periods. That holds whatever way you read the size test, so these counts are a lower bound. A higher tier is always allowed, and Tier 1 can also follow from public accountability, so the "elected" columns describe choices, not breaches.

* Tier 4 eligibility is set on operating payments (cash). The register's total expenditure is the closest figure available for every tier, so these two columns are approximations. The FY2024 rise in "Tier 2, under Tier 3 ceiling" is the new $5M ceiling taking effect, not a change in behaviour.

3. The 2024 threshold rise

Tier changes between consecutive returns

Where charities sit now (latest return, period ending on or after 28 March 2024)

n = 27,983 charities and reporting groups whose latest return has a tier and an expense figure.

Tier 2 filers: their first return under the new thresholds

n = 1,579 charities whose last return for a period ending before 28 March 2024 was Tier 2 and whose next return falls after it. Some charities move one year later, so the switch table above is the fuller picture.

4. Audit and review

Tier 1–3 annual returns record the charity's own answer to the Charities Act size test (under the review threshold, review band, or audit band), whether its own rules require an audit or review, and whether the financial report was audited or reviewed. The register holds that last answer as a single yes/no, so audit and review cannot be told apart. These questions thin out from FY2024 returns onward, so the table stops at the last year in which at least 90% of review- and audit-band returns answered them (FY2023).

In FY2023, 99.8% of review-band and 99.9% of audit-band returns that answered said the report was audited or reviewed. Below the threshold the form asks about assurance only when the charity's own rules require it.

Tier against the statutory size answer, FY2023

Is the self-reported size answer right?

We recomputed the test from each charity's total expenditure in its two preceding returns, using the thresholds for the period. For FY2019–FY2025, the charity's own answer matched ours on 69,317 of 74,427 returns (93.1%). Differences can come from expenditure close to a threshold, a missing year between returns, or total expenditure differing from operating expenditure; we have not examined them individually.

Who signs the assurance report, FY2023

Firm names are free text on the return; we group obvious variants (for example regional BDO offices) but sole practitioners may be split across spellings, so the distinct-firm count is an upper bound.