NZ Provisional Tax Comparison Calculator
Compare the three provisional tax methods — Standard, Estimation, and AIM — side by side. See exactly how much you'll pay and when for the 2025-26 tax year.
From your previous year's tax assessment (IR3/IR4)
Your best estimate of this year's income tax liability
AIM requires annual gross income of $5 million or less for the previous tax year (some larger businesses qualify through Commissioner approval or a large business AIM-capable system)
Method Comparison
1st instalment
28 August
2nd instalment
15 January
3rd instalment
7 May
- •Based on prior year residual income tax (RIT) × 105%.
- •Paid in 3 equal instalments on 28 August, 15 January, and 7 May.
- •If your residual income tax for the year is under $60,000, use-of-money interest (UOMI) runs only from the day after the end-of-year tax due date.
1st instalment
28 August
2nd instalment
15 January
3rd instalment
7 May
- •Based on your estimate of current year residual income tax.
- •Use-of-money interest (UOMI) applies if your estimate is too low.
- •You can revise your estimate at any time during the year.
- •If your estimate is less than the standard method amount, UOMI may apply from the first instalment date.
Period 1
29 June
Period 2
28 August
Period 3
28 October
Period 4
15 January
Period 5
1 March
Period 6
7 May
- •Payments are based on actual accounting income for each 2-monthly period.
- •Requires AIM-capable accounting software (e.g. Xero, MYOB).
- •No use-of-money interest (UOMI) exposure — payments match actual income.
- •Available if your annual gross income for the previous tax year was $5 million or less.
- •Amounts shown are estimates; actual amounts are determined by your AIM software.
Tip: Your estimated RIT ($11,000.00) is higher than the standard method amount ($10,500.00). The standard method may result in lower provisional tax payments.
What is Provisional Tax?
Provisional tax is income tax paid in advance during the year, rather than as a lump sum at the end. If your residual income tax (RIT) from the previous year exceeded $5,000, you are required to pay provisional tax in the current year.
There are three methods to calculate how much provisional tax to pay: the Standard method, Estimation method, and the AIM (Accounting Income Method). Each method has different risk and cashflow implications.
The Three Provisional Tax Methods
Standard Method
Pay prior year RIT × 105% in three instalments (two if you are GST-registered and file 6-monthly). The simplest option — no use-of-money interest (UOMI) on the instalments as long as you pay on time.
Due: 28 Aug · 15 Jan · 7 May
Estimation Method
Estimate your current year's tax liability and pay in three instalments. Useful if income has fallen significantly — but UOMI applies if your estimate is too low.
Due: 28 Aug · 15 Jan · 7 May
AIM (Accounting Income Method)
Pay based on actual income each 2-month period using AIM-capable accounting software. No UOMI exposure. Available if last year's annual gross income was $5 million or less.
Due: 6 payments per year (2-monthly), or 12 if you file GST monthly
Method comparison at a glance
You must pay provisional tax if last year's residual income tax (RIT) was over $5,000. Pick the method that fits your cashflow and income stability.
| Method | Based on | Instalments | UOMI risk |
|---|---|---|---|
| Standard | Prior-year RIT × 105% | 3 (28 Aug · 15 Jan · 7 May) | None on instalments paid on time; interest on any shortfall at year end |
| Estimation | Your estimate of this year's RIT | 3 (28 Aug · 15 Jan · 7 May) | Yes, if you under-estimate |
| AIM | Actual income each 2-month period | 6 (2-monthly) or 12 (monthly GST filers), via software | None if paid in full and on time |
Dates are for a standard 31 March balance date. AIM is available if your annual gross income for the previous tax year was $5 million or less, using AIM-capable software (Xero, MYOB). For the full 2026-27 schedule — including the GST-ratio option's six instalments and what happens if a date falls on a weekend — see the provisional tax due dates reference page.
Already have a shortfall? Compare a current intermediary quote with IRD interest in the tax pooling savings calculator.
Worked example — standard method
Last year's RIT was $8,000. Under the standard method you pay 105% of that = $8,400 this year, split into three instalments of about $2,800 on 28 Aug, 15 Jan and 7 May. Any difference against your actual RIT is squared up (refund or terminal tax) when you file. If your income has dropped sharply, the estimation method can lower these payments — but UOMI applies if you under-estimate.
Frequently Asked Questions
Who needs to pay provisional tax in New Zealand?
You need to pay provisional tax if your residual income tax (RIT) from the previous tax year was more than $5,000. RIT is the income tax you owe after all credits and deductions. This commonly applies to self-employed people, contractors, landlords, and investors with significant income not subject to PAYE.
What is residual income tax (RIT)?
RIT is your total income tax liability for a tax year, minus any tax credits (such as PAYE already withheld). It is the net amount you owe (or are refunded) after filing your income tax return. Your prior year RIT is shown on your IR3 or IR4 tax assessment.
What is use-of-money interest (UOMI)?
UOMI is interest charged by IRD when you underpay provisional tax. It applies when your actual tax liability turns out to be higher than the provisional tax you paid. The estimation method carries UOMI risk. The standard method charges no interest on instalments paid on time, but any shortfall against your final RIT attracts UOMI (from the day after the end-of-year due date if RIT is under $60,000). AIM charges none if you pay in full and on time.
Which provisional tax method is best?
The standard method is simplest and safest — ideal if your income is stable. Use the estimation method if your income has dropped substantially (paying 105% of last year's tax would over-pay). AIM suits businesses with AIM-capable software (Xero, MYOB) who want to match payments to actual income and eliminate UOMI risk.
What are the provisional tax due dates for 2025-26?
Standard and estimation methods: 28 August 2025, 15 January 2026, and 7 May 2026. AIM method: instalments follow your GST periods. If you file 2- or 6-monthly GST returns (or are not GST-registered) there are 6, due 28 June, 28 August, 28 October, 15 January, 28 February and 7 May; if you file GST monthly there are 12.
Can I switch methods during the year?
Yes. You can change from the standard method to the estimation method at any time by filing a revised estimate with IRD. However, UOMI will apply from the first instalment date if your revised estimate turns out to be too low.
What if I don't pay provisional tax on time?
If you miss a provisional tax payment, IRD will charge use-of-money interest and may also charge late payment penalties. It is important to pay by each due date to avoid these additional charges.
Is AIM the same as GST-ratio method?
No. AIM (Accounting Income Method) calculates provisional tax based on actual accounting income each 2-monthly period. The GST-ratio method is a separate, still-available option that sets instalments as a percentage of your GST-period sales. AIM requires AIM-capable accounting software.
Sources
Provisional tax rules from Inland Revenue (IRD) — Provisional Tax . AIM rules from IRD — Accounting Income Method .
Rates and thresholds sourced from IRD. This calculator is for informational purposes only. Consult a tax professional for advice specific to your situation.
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