# How to start a home bakery in New Zealand: the cake exemption, national programmes, IRD and your first month

> Start a home bakery in New Zealand: whether the MPI cake exemption covers you, when you need a Food Control Plan or National Programme, and GST at $60,000.

To start a home bakery in New Zealand, first work out whether you are a
home-based maker or decorator of shelf-stable cakes selling direct to
consumers. If you are, a Food Notice issued by MPI on 30 October 2025 exempts
you from registering a Food Control Plan or National Programme until 31 October 2028,
though you must still follow good hygiene practice, trace your ingredients and
be able to recall food. If you sell anything else, such as bread, biscuits,
cream cakes or other bakery products, you register under the Food Act 2014,
usually with your council: National Programme 2 for shelf-stable grain
products such as bread and biscuits, or a Food Control Plan for a retail
bakery with cream or custard. Then tell Inland Revenue you are self-employed,
get a free NZBN, and register for GST once turnover reaches $60,000.

How the exemption compares with other countries is in
[home baking laws by state and country](/blog/home-baking-laws-by-state-and-country),
and the questions to ask your regulator are in
[do I need a license to sell cakes from home](/blog/do-i-need-a-license-to-sell-cakes-from-home).
MPI's and your council's pages are the authority; check with them before you
rely on any step here.

## Step 1: check whether the cake exemption covers you

The exemption applies only if every one of these is true:

| Test | Covered | Not covered |
|---|---|---|
| What you make | Cakes, or decorating cakes | Bread, cookies, slices, pastries, pies, other bakery products |
| Shelf-stable | Safe at room temperature until eaten, or eaten within 3 to 5 days without refrigeration | Fresh cream, custard, cheesecake, anything needing the fridge |
| Where | Your home kitchen | A hired or commercial kitchen |
| Who buys | The person eating it, or buying for them | Cafes, shops or anyone reselling; export |

A buttercream or ganache celebration cake, a fondant wedding cake and a tray
of iced cupcakes sold to a customer are the core case. A loaf of sourdough is
not, and neither is a cream sponge.

If you are exempt, you must still:

- operate under good hygiene practice, including making sure anyone handling
  the food is competent to do it
- tell MPI if something is wrong with a product that is likely to be an
  immediate threat to public health
- be able to trace where your ingredients came from
- manage a recall if one is needed

Those last two mean records: which batch of flour, butter and decorations went
into which customer's cake. Keep them from the first order.

The exemption runs out on 31 October 2028. Plan as if you may need to
register after that.

## Step 2: if you are not exempt, find your plan or programme

Under the Food Act 2014 your products set your risk level, and your risk
level sets what you register:

- **National Programme 2** covers lower-risk manufacturers, including
  bakeries that make only bread, and makers of shelf-stable grain products
  such as biscuits and crackers. A home sourdough baker or biscuit maker
  usually lands here.
- **A Food Control Plan** is for higher-risk food. MPI publishes a template
  for specialist retail bakeries, because products with cream or custard can
  support harmful bacteria. Fresh cream and custard fillings must be kept at
  5°C or colder.

MPI's website has an online tool that asks about your products and tells
you which one applies. Run it with your full menu, not just your best
seller, because one cream product can move the whole business up a level.

## Step 3: register with your council

For most home bakers the registration authority is your local council.
Registration, verification and any renewal fees are set by each council, so
get them from your council's food business pages before you budget. Ask:

1. Is my home kitchen suitable for my plan or programme?
2. Do I need resource consent to run a food business from home?
3. Who verifies me, how often, and what does each visit cost?

Auckland Council and other councils publish home-based food business guides
with their own expectations for the kitchen. Exempt cake makers do not
register, but it is still worth asking your council whether it wants to know
you exist, and checking district plan rules on home businesses.

## Step 4: set up the kitchen

Whether exempt or registered, the practical standard is the same:

- hand washing with warm water, soap and single-use towels, available while
  you work
- business ingredients stored apart from household food
- pets out of the kitchen during production
- a fridge thermometer and a log, if anything you make needs refrigeration
- clean, then sanitise, benches and equipment before each bake
- a batch record linking ingredients to orders, which is your recall plan

## Step 5: allergens and labels

New Zealand and Australia share the Food Standards Code, so plain English
allergen labelling applies to your packaged food. Allergens are named in
**bold** in the ingredient list using the required names (wheat, milk, egg,
soy, sesame, peanut, almond, and so on), with a separate "Contains" summary
statement. For unpackaged food, such as a custom cake in a box, allergen
information must be displayed with the food or available on request. Keep a
written allergen list for every product.

## Step 6: IRD, NZBN and GST

1. **IRD.** Tell Inland Revenue you are working for yourself through myIR,
   or get an IRD number first if you do not have one. You file an individual
   income tax return including your bakery profit.
2. **Provisional tax.** Not in your first year unless your previous year's
   residual income tax was over $5,000. After that, you pay provisional tax if
   you had more than $5,000 to pay at the end of the year.
3. **NZBN.** Optional but recommended, and free for sole traders. Most
   applications are processed instantly with a New Zealand driver licence or
   passport. Use it on invoices to cafes and stockists.
4. **GST.** Register if your turnover was at least $60,000 in the last 12
   months, or you expect it to be at least $60,000 in the next 12. Below that,
   registration is voluntary.

Set aside a share of every payment for tax from the first order, and keep
every receipt for ingredients, packaging and equipment.

## Step 7: insurance

Markets, venues and cafes usually ask for public liability cover before they
will deal with you, and product liability covers a customer who falls ill
from what you sold. Tell your home and contents insurer you run a food
business from home, since many policies limit business activity. Premiums
depend on your products and turnover, so get two or three quotes.

## Step 8: price your first products

Cost every product from what you paid: ingredients, packaging, your hours at
a wage you would accept, then margin. Worked examples in NZ dollars:
[cake prices by country](/blog/cake-prices-by-country),
[cake pricing calculator](/blog/cake-pricing-calculator),
[how to price cookies for a cookie business](/blog/how-to-price-cookies-for-a-cookie-business)
and [how to price sourdough bread](/blog/how-to-price-sourdough-bread).
If you expect to reach $60,000, decide now whether your prices will include
GST once you register.

## Step 9: orders and deposits

Write your order terms before you advertise: lead time, deposit, balance date,
cancellation and pickup or delivery. For custom cakes, 50 percent at booking
and the balance 7 to 14 days before the event is the common structure; see
[how much deposit for a custom cake](/blog/how-much-deposit-for-a-custom-cake)
and the [cake order terms template](/blog/terms-to-get-signed-for-custom-cake-orders).
Exempt cake makers can sell only direct to consumers, so turn down cafe and
reseller orders until you are registered.

## Your first-month checklist

| Week | Do |
|---|---|
| Before week 1 | Menu run through the exemption table; MPI's online rules tool if not exempt |
| Week 1 | IRD told you are self-employed; NZBN; council contacted if you need to register |
| Week 2 | Kitchen set up; batch and ingredient tracing record started; insurance quotes |
| Week 3 | Allergen list for every product; labels for anything packaged |
| Week 4 | Prices costed; order terms written; first orders |
| Ongoing | Turnover tracked against $60,000; diary note to review before 31 October 2028 |

## Where ibakepro fits

ibakepro is bakery management software for New Zealand bakers, from an exempt
home cake maker to a bakery with staff on a Food Control Plan. The trace and
recall the exemption still asks for is on record: each recipe lists the pantry
items that go into it, and each order shows what was made and the customer
who bought it. Deposits and balances are taken in New Zealand dollars, GST at 15
percent is added once you register, and Growth and Business keep the
temperature, cleaning and corrective action records a verifier reviews.
Essentials is NZ$29 a month, Growth NZ$37 and Business NZ$100, with a 14-day
free trial. See [allergen management](/features/allergen-management),
[payment schedules and deposits](/features/payment-schedules-and-deposits) and
[Compliance](/features/food-safety-and-compliance).