Estimate the standard uplift amount
Provisional tax is a way of paying income tax during the year. This calculator models the arithmetic of the standard uplift option using residual income tax from a previous year. It is useful for setting aside cash or checking the starting point of an assessment. It does not decide whether you must pay provisional tax, calculate your current year's final tax liability, or replace the instalment amounts shown in myIR.
Enter residual income tax, often called RIT, from the selected year's assessment. Do not enter turnover, accounting profit, taxable income or the total GST collected. Those are different measures. If the input is wrong, an accurately applied uplift will still produce a misleading reserve. Keep the assessment or return reference beside the calculation so the year and amount can be checked later.
Previous year or two years ago
The standard arithmetic is 105% of the previous year's RIT or 110% of RIT from two years ago. The applicable basis depends on filing timing and extension-of-time circumstances. The selector represents that basis; it is not a choice to use whichever result is lower. A taxpayer's basis can also change during the year as a return is filed. Review the IRD standard-option guidance before relying on a particular selection.
For previous-year RIT of $10,000, multiplying by 1.05 gives a $10,500 annual planning amount. Dividing that amount into three equal parts gives $3,500 each. If the relevant two-year-old RIT is $10,000, multiplying by 1.10 gives $11,000 instead. With two equal instalments, the illustrative amount is $5,500. These examples isolate the uplift calculation; they do not imply that every taxpayer has either of those schedules.
Instalments are not always an equal split
The calculator offers two or three equal instalments to help with budgeting. Three instalments are common under the standard option, while six-monthly GST filing can change the count. Due dates also depend on balance date and other circumstances. This page does not generate a payment calendar. Check the actual dates in myIR and do not assume that dividing the year into equal months identifies a tax deadline.
A return filed partway through the provisional year can change the uplift basis for later payments. Earlier payments and any reassessment may need to be taken into account. Simply dividing the latest annual amount by three can therefore differ from the amount currently due. When checking a payment notice, compare its underlying RIT year, uplift, prior payments and filing dates rather than only comparing the final number.
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Using the estimate in a cash-flow plan
Suppose the illustrative annual amount is $10,500 and you want to reserve cash monthly. Dividing by 12 suggests an $875 monthly reserve. That is a budgeting convention rather than an IRD instalment schedule. If the first payment falls soon after you begin saving, twelve future monthly deposits will not fund it in time. Work backwards from the real due date and the cash already reserved.
Keep the reserve separate from GST and business operating cash in your own planning records. A business may have several obligations with different periods and payment dates. Combining them into one unexplained tax percentage can hide a shortfall. This tool only supplies the standard uplift amount; a useful cash forecast also records actual receipts, payroll, supplier payments and any other tax reserves.
Comparing with expected current income
The standard option uses historical tax rather than directly calculating tax on current profit. A growing business may find the uplift amount differs from the eventual liability. A business with declining income may also find the reserve differs from what it ultimately owes. Neither difference by itself makes the standard calculation incorrect. It reflects the method's use of a previous assessment as its starting point.
If circumstances have changed substantially, discuss the available provisional-tax methods with an accountant or consult IRD. Changing methods can have consequences that are not represented by a simple annual multiplication. This calculator does not estimate use-of-money interest, penalties, safe-harbour treatment, pooling arrangements or special rules for new provisional taxpayers. Avoid treating the smallest displayed scenario as the best tax choice without considering those issues.
Records and limitations
Save the RIT amount, its tax year, the selected uplift basis and the date you ran the scenario. Also record whether the amount was taken from a filed return, an assessment or an estimate. That distinction helps explain later changes. If the previous year's return is amended, recheck the relevant IRD rules before assuming every upcoming instalment should immediately be recalculated from the amended number.
All inputs must be non-negative and the tool rounds displayed amounts to cents. A zero input returns a zero uplift estimate, but does not establish that no tax is due under every applicable rule. The output is an arithmetic aid for the standard method. Before paying, reconcile it with the current assessment and payment schedule, including credits already available and amounts already paid.
Frequently asked questions
Can I choose the smaller uplift?
The applicable basis depends on filing and extension-of-time circumstances, rather than which amount you prefer. Confirm the relevant basis with IRD.
Are these my payment dates and amounts?
No. The equal split is for planning. Actual instalments can change with filing timing, earlier payments and the taxpayer's schedule.