UOMI (Use of Money Interest)

Use of Money Interest (UOMI) is the interest Inland Revenue charges when tax is paid late or underpaid, and pays when tax is overpaid. It applies mainly to provisional tax instalments and terminal tax — if your payments during the year fall short of what you actually owed, UOMI accrues on the shortfall from the relevant instalment date until you pay.

The underpayment rate is currently 8.97% per annum (simple daily), effective 16 January 2026 — down from 9.89% (from 8 May 2025) and 10.88% (from 16 January 2025). IRD revises the rate periodically in line with market interest rates, so always check IRD's current published rate before relying on a figure for planning.

A 'safe harbour' protects taxpayers with residual income tax (RIT) of $60,000 or less from UOMI on the terminal-tax shortfall, provided they paid the standard-uplift amount at each provisional instalment date on time — in that case you only need to pay the residual by the terminal tax due date, interest-free. UOMI is separate from late-payment penalties, which apply on top: 1% immediately after the due date, plus a further 4% if the amount remains unpaid 7 days later.