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Service changes and updates IR offices, myIR and phone lines (SPK2IR) are unavailable until the morning of Thursday 28 October for planned system maintenance. Find out more

Resurgence Support Payment (RSP) You will not be able to apply for the RSP in myIR until the morning of Thursday 28 October. Businesses affected by the alert level increase that started on 17 August can apply in myIR from 28 October. Applications for a 4th payment round are planned to open on 29 October. Find out more

Resurgence Support Payment (RSP) The government has announced an increase to the amount and frequency of the RSP from 12 November. Find out more

Provisional tax helps you manage your income tax. You pay it in instalments during the year instead of a lump sum at the end of the year.

You'll have to pay provisional tax if you had to pay more than $5,000 tax at the end of the year from your last return. $2,500 before the 2020 return.

It's payable the following year after your tax return. For example, if your residual income tax from your 2020 return is more than $5,000, then you'll need to pay provisional tax during the 2021 tax year.

Provisional taxpayers often earn:

  • self-employed income
  • rental income
  • income earned as a contractor
  • income from a partnership
  • overseas income.

There are some situations where you may need to pay provisional tax on your reportable income.

These can be due to:

  • incorrect use of tax code or rate for PAYE, interest, or dividends
  • lump sum payments that did not have tax deducted, or not enough tax deducted
  • employee share scheme income that did not have tax deducted
  • property sales subject to the bright-line property rule.

In light of COVID-19 the provisional tax threshold has been increased from $2,500 to $5,000. This means any current provisional taxpayers with provisional tax payments of less than $5,000 will have until 7 February following the year they file to pay their tax bill. This is intended to lower compliance costs for smaller taxpayers and allow them to retain cash for longer.

Last updated: 16 Jun 2021
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