NZ Provisional Tax: Standard Option, Dates and Examples
17 October 2026 · Guide · Not tax advice
Educational information only. Not tax, legal or financial advice. We are not Inland Revenue (IRD) or ACC and are not affiliated with them. Check ird.govt.nz and acc.co.nz, or ask a qualified tax agent. Last checked against official sources: October 17, 2026. Anything marked expected should be re-checked. Examples use made-up numbers.
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Short answer: Provisional tax is a way of paying income tax during the year. The IRD says that under the standard option your provisional tax is generally your previous year's residual income tax (RIT) plus 5%, paid in three equal instalments on 28 August, 15 January and 7 May (March balance date). The IRD uses the standard option unless you choose another.
Who is a provisional taxpayer?
The IRD page on choosing to be a provisional taxpayer refers to expecting RIT of more than $5,000. If you are not one but expect RIT over $5,000, you may elect to be one (conditions apply). The IRD's guide excerpts also say that if your RIT from two years ago was under $5,000 you don't have to pay provisional tax in the case described.
Standard option: when you filed last year's return (excerpt of IRD guide)
| If you filed last year's return | P1 (28 Aug) | P2 (15 Jan) | P3 (7 May) |
|---|---|---|---|
| On or before 28 Aug | (RIT + 5%) ÷ 3 | same | same |
| After 28 Aug, on or before 15 Jan | (RIT 2 years ago + 10%) ÷ 3 | (last year's RIT + 5%) × 2 ÷ 3, less P1 | (last year's RIT + 5%) less (P1 + P2) |
Other cases (filed after 15 January) are in IR316; we did not transcribe them. The IRD says the uplift also depends on whether you have an extension of time.
Made-up example
Last year's RIT $12,000: provisional tax = $12,000 × 1.05 = $12,600; each of 3 instalments = $4,200. If you hadn't filed by 28 August and your RIT two years ago was $10,000: P1 = ($10,000 × 1.10) ÷ 3 ≈ $3,667 (IRD says use whole dollars); P2 = $12,600 × 2 ÷ 3 − $3,667 = $4,733; P3 = $12,600 − ($3,667 + $4,733) = $4,200.
Other options (summary)
- Ratio option: 6 instalments (28 June, 28 Aug, 28 Oct, 15 Jan, 28 Feb, 7 May).
- AIM (accounting income method): instalments line up with GST dates.
- Estimation: you estimate your tax; the IRD notes penalties for unreasonably low estimates (shortfall penalty, per its glossary; details not read).
If you file 6-monthly GST, the IRD says the standard option has two instalments rather than three.
FAQ
Can I pay extra at any time? Not verified here.
Are there penalties? See late payment penalties.
What we could not verify
- The full IR316 table and the dates for 6-monthly GST filers' instalments.
- Shortfall penalty rules.
- Tax rates and brackets, Working for Families, KiwiSaver and other rules are not covered.
- Public holidays (including regional anniversary days) can move dates; we only applied the cases shown in the IRD calendar.
Sources (official)
- IRD, Payment dates for provisional tax — official page (read October 17, 2026)
- IRD, Choosing to be a provisional tax payer — official page (read October 17, 2026)
- IRD, Standard option and IR316/IR289 (search excerpts only, pages not read in full) — official page ; official page (excerpts October 17, 2026)