You pay provisional tax in New Zealand once the residual income tax (RIT) on your last return, meaning the income tax left after PAYE and other credits, was more than $5,000, according to IRD's provisional tax page. The following year's tax is then paid in instalments, which for a 31 March balance date on the standard or estimation option fall on 28 August, 15 January and 7 May under IRD's payment dates page, and you choose between the standard, estimation, ratio and accounting income method (AIM) options.
Residual income tax and when the threshold bites
IRD's glossary defines RIT as the income tax you pay for the year less any PAYE and other tax credits, except Working for Families. For a creator with a day job, that means only the tax on your untaxed creator profit counts, because wages already had PAYE taken out. The provisional tax page gives the timing: RIT of more than $5,000 on one year's return means provisional tax during the next year, and it lists self-employment, contracting and overseas income among the usual reasons people become provisional taxpayers.
You can also opt in. IRD's page on choosing to be a provisional taxpayer says that if you expect RIT above $5,000, you can elect in when you file that year's return, provided you paid at least $5,000 by the final instalment date and were reasonably sure, when you made the first payment, that you would be liable. Creators whose income is clearly climbing often do this to keep interest predictable. Our overview of content creator tax in New Zealand covers what goes into the profit figure in the first place.
The first year: no instalments, then a double bill
IRD's page on paying tax in your first year in business says the standard, estimation and ratio options require no provisional tax during your first year, while AIM users pay when the business makes a profit. The first year is still taxed: that income tax is usually due on 7 February the following year, or 7 April if you have an agent, which can land at the same time as your first provisional instalments for year two.
IRD's Provisional tax guide (IR289) shows the scale with an example of a new business owner whose first-year RIT was $75,000: in her second year she paid that $75,000 on 7 February as well as $78,750 of provisional tax for the new year, because she made no voluntary payments in year one. Voluntary payments during the first year spread the cost, and the first-year page says they may earn an early payment discount, set at 4.25% for the 2027 income year, if, among other conditions, your income comes mainly from the business, you pay before the end of the income year and you have not had to pay provisional tax in that year or the 4 before it.
Leaving a job to create full time? IRD's page on interest on provisional tax describes a new provisional tax liability for an individual whose RIT was less than $5,000 in each of the last 4 years, who stops earning employment income during the year and starts a taxable activity with no tax deducted, and whose RIT for the current year is $60,000 or more. In that case provisional tax applies in the same year, with interest calculated from the first instalment date that falls more than 30 days after the business started.
Method chooser
IRD's page on provisional tax options offers four methods. Each row below links to the IRD page that sets out its conditions.
| Method | How the amount is set | Creator situations it fits | Source |
|---|---|---|---|
| Standard | Last year's RIT plus 5%, or the RIT from 2 years ago plus 10%, depending on when last year's return was filed and any extension of time | Income that grows steadily, where last year is a fair guide and you want the default with the least admin | Standard option |
| Estimation | Your own estimate of this year's RIT, which can be $0 and can be revised up to the final instalment date | A sharp fall in income, a loss to offset, or a move from self-employment to salaried work | Estimation option |
| Ratio | A percentage IRD calculates, applied to the GST turnover in each of 6 instalments | Seasonal or uneven sales, if you were in business and GST-registered for the whole previous year and part of the one before, file GST monthly or two-monthly, and last year's RIT was over $5,000 and up to $150,000 | Ratio option |
| AIM | Calculated by approved accounting software from profit to date, with a statement of activity each period | A new or fast-growing channel, irregular brand income, or anyone already keeping books in software, for turnover under $5 million | AIM |
Two restrictions shape the choice. The standard option page lets you move from standard to AIM or estimation at any time, but not to ratio in the same year, and the ratio page requires you to elect before the income year begins, without backdating. AIM users are switched back to the standard method at the start of each tax year until they file their first statement of activity for that year. If GST registration is still ahead of you, our GST guide for New Zealand creators explains how filing frequency interacts with these options.
Payment calendar worksheet
This worksheet assumes a 31 March balance date and the standard option, which IRD applies unless you choose otherwise. Enter your own RIT; the uplifts and dates come from the pages in the source column.
| Line | Your figure or the calculation | Source |
|---|---|---|
| A | Last year's RIT from your notice of assessment; if it is $5,000 or less, stop here unless you elect in or the new provisional taxpayer rule applies | IRD provisional tax |
| B | Standard provisional tax for this year: line A multiplied by 1.05 | Standard uplift |
| C | If last year's return will not be filed in time and you have an extension, the RIT from 2 years ago multiplied by 1.10 for the early instalments | Extension rules |
| D | Each instalment: line B divided by 3, or by 2 if you file GST six-monthly | IR289 |
| E | Dates for line D: 28 August, 15 January and 7 May, or 28 October and 7 May for six-monthly GST filers | IR289 due dates |
| F | After year end: this year's actual RIT minus everything paid in lines D and E, due 7 February, or 7 April with a tax agent's extension | End-of-year due date |
| G | Your set-aside rule: the share of each payout you move to a tax account so lines D and F are covered | Your own budget |
Ratio users pay 6 instalments instead, on 28 June, 28 August, 28 October, 15 January, 28 February and 7 May, and AIM users pay in line with their GST periods, all listed on IRD's payment dates page. For line G, our irregular income budgeting worksheet shows how to size a tax bucket when payouts swing month to month.
Use-of-money interest, method by method
IRD stresses that interest is a charge for the use of money, not a penalty, and its page on interest on provisional tax says nothing is charged or paid where you under or overpay by $100 or less. Beyond that, the method you picked decides the exposure.
- Standard, RIT under $60,000. The same IRD page says interest runs only from the day after the end-of-year due date, a rule that applies from the 2023 income year.
- Standard, RIT of $60,000 or more. Under the interest rules, interest runs from the day after the final instalment date, and earlier late or short instalments attract interest from their own due dates.
- Estimation. Interest is worked out against your actual RIT from each instalment date, even if you paid your estimate in full and on time, and penalties are possible for a low estimate.
- Ratio. Applied correctly and paid on time, it carries no interest either way during the year, and IRD's interest page charges interest only if more than $100 is owed after the end-of-year due date.
- AIM. Interest applies from the day after any late or short instalment, but IRD does not pay interest on AIM overpayments.
If you use the standard, estimation or ratio options, IRD's tax pooling page explains that payments can be made through a registered intermediary whose pool lets one member's underpayment be offset by amounts in the pooling account, reducing the interest charged. It is a commercial service, so compare its cost with simply paying on time.
Where IRD's pages differ
- Threshold history. IRD's creator page on paying your tax still frames the threshold as more than $5,000 for returns from 2020 onwards and $2,500 before that, while the current provisional tax page simply says more than $5,000 from your last return. The current page governs.
- The new provisional taxpayer test. The interest page says RIT less than $5,000 for the last 4 years, while the April 2025 IR289 guide says $5,000 or less in each of the 4 previous years. If your past RIT sits right on that figure, ask IRD or your agent which reading applies.
- Missing dates. The payment dates page lists the standard, ratio and AIM calendars but not the two-instalment dates for six-monthly GST filers, which appear in IR289 instead.
Limitations of this provisional tax guide
This guide reflects IRD web pages and the IR289 guide as checked on 1 October 2026, and assumes an individual sole trader with a 31 March balance date. Non-standard balance dates, companies, trusts, partnerships, student loan repayments and look-through companies change the dates and rules, and the interest examples on IRD's pages are the authority, not this summary. A tax agent can change your due dates through an extension of time and run the method comparison with your real figures, so if your income is rising quickly or arrives in large brand payments, get one involved before the first instalment rather than after the first interest notice.