We’ll use the standard option for your provisional tax unless you choose otherwise.
If you use the standard option, you’ll pay 3 instalments during the year unless you're registered for GST and file 6-monthly GST returns. Then you'll only pay 2 instalments.
- your previous year’s residual income tax (RIT) plus 5%
- your RIT from 2 years ago plus 10%.
The uplift to use depends on when you file your previous year’s return and whether you have an extension of time to file your return.
Work out which uplift you need to use for each payment, then calculate how much each instalment will be.
Work out provisional tax using the standard option
No extension of time to file your income tax return
If you don’t have an extension of time to file your return, your provisional tax will be your previous year’s RIT plus 5%. This includes if you file your return after any of your provisional tax dates.
When you have an extension of time to file your income tax return
Calculate your instalments according to when your previous year’s return is filed.
Return filed on or before the first provisional tax date
If you have filed your previous year’s return on or before your first provisional tax due date, you’ll pay 3 equal instalments during the year. These will be using your previous year’s residual income tax (RIT) plus 5%.
Return filed after the first but on or before the second provisional tax date
Your provisional tax will be based on your RIT:
- from 2 years ago plus 10% for your first instalment
- from last year plus 5% for your second and third instalments.
If you file on or before your second provisional tax date, or the next working day if it falls on a public holiday or weekend, your provisional tax for that instalment will be based on your previous year’s RIT plus 5%.
Return filed after the second or third provisional tax dates
Your first and second instalments will be based on your RIT from 2 years ago plus 10%.
Your final instalment will be based on your previous year’s RIT plus 5%.
If you file after your final provisional tax date, your final instalment will be based on what you expect your previous year’s RIT to be plus 5%. This is because your return is expected to have been filed before your final provisional tax date. If your previous year’s RIT is different from expected, you will have paid more or less than needed.
Changing provisional tax methods
You can change from the standard option to AIM or the estimation option at any time, but you cannot change to the ratio option during the same year.
Amendments to your previous year’s return
If your previous year’s return is reassessed or amended within 30 days of one of your provisional tax instalment dates, your provisional tax instalment will not change. You will need to calculate it using the original assessment.
Filing your return for the current year
You may have more tax to pay once you’ve filed your income tax return if your RIT for the current year is more than the provisional tax you have paid.
For more information, read our Provisional tax guide - IR289.