Stress rising for New Zealand's small business owners

Xero research suggests stress is rising among small business owners in Aotearoa New Zealand, with almost half saying they have considered closing their business due to pressure.

The Emotional Tax Return research found 75% of respondents said the current financial year has been more stressful than previous years. Rising costs were the most common factor, cited by 48%, followed by unpredictable demand (30%).

Nearly half of those surveyed (47%) said stress had led them to consider giving up their venture. Financial management featured heavily: two-thirds (67%) said it was a source of stress.

Xero Aotearoa New Zealand Country Manager Bridget Snelling said the results reflected the personal strain that can sit behind business ownership.

"Running a small business is hard work and business owners often have to make significant sacrifices - missing a child's swimming sports or working all hours and not getting enough sleep. This is what we call an emotional tax - the hidden personal costs small businesses owners have to pay every year." 

Year-end pressure

The end of the financial year emerged as a focal point for anxiety, with 42% saying this period feels more stressful than the rest of the year.

Administrative tasks were a key driver: 34% said they needed to chase paperwork, while 31% worried about making mistakes.

Tax outcomes also added to uncertainty. More than half of respondents (54%) said they had been surprised by a tax outcome, and most of those surprises were negative.

Snelling said the end of the financial year can sneak up on owners focused on day-to-day work, and that being proactive can help avoid unexpected tax surprises.

Productivity hit

The research linked stress to lost output during the working week. On average, owners reported losing five hours of productive work each week because of stress-equating to around 30 working days per year.

The findings also pointed to physical effects, particularly sleep. More than half of owners (55%) said they have had less sleep since starting their business, while 12% said they were losing five or more hours of sleep a night.

Snelling described stress as both a performance and wellbeing issue.

"Stress isn't just a feeling - it slows decision‐making, reduces creativity, and leads to avoidable mistakes. It impacts the skills owners rely on to succeed."

Advice gap

Despite the scale of the concern, the research suggested many owners do not turn to professional support. Only 10% said they seek advice from an accountant or adviser when they are stressed.

Xero said advisers can reduce the likelihood of errors and unexpected liabilities, particularly around tax and financial planning.

"Small business owners carry so much on their own, and having someone who understands their tax obligations and financial landscape can make a huge difference."

"Advisors help map out what's ahead and reduce the chance of unexpected bills. Good advice doesn't just fix problems - it prevents them."

Xero also pointed to software as a way to reduce administrative load. A separate Xero customer survey of 485 small businesses globally using Xero, conducted in October 2025, found respondents said they save an average of five hours a week using the platform. The survey cited bill creation, payments, and reconciliation as processes handled automatically.

"With the right tools and support, business owners can reclaim time, reduce their emotional tax, and feel more confident heading into EOFY."

Marketing campaign

Alongside the research, Xero has launched an "Emotional Tax Refund" promotion aimed at small business owners in New Zealand. Participants are invited to share a missed moment from the past financial year via an Instagram Story and tag the company.

The initiative focuses on time missed outside work, such as family events, anniversaries, weekends, and delayed holidays. Xero said the campaign offers a chance for owners to reclaim time and experiences they feel work has displaced.

The research adds to a wider debate in New Zealand about pressures on smaller firms, including cost inflation, volatile demand, and compliance requirements. It also underlines how operational uncertainty can spill into personal wellbeing, particularly around financial year-end.

Xero said it encourages business owners who need support to seek it early, and referenced the Mental Health Foundation of New Zealand as a source of resources and guidance.