Avoid Tax Surprises - Take Control of Your Provisional Tax
What is Provisional Tax?
Provisional tax is simply the way you pay your income tax throughout the year, rather than all at once at the end.
If your last tax bill (after PAYE or other credits) is more than $5,000, the IRD requires you to pay income tax in instalments - usually three times a year (or twice if you file GST every six months).
Those payments are based on last year’s profit, with the IRD assuming you’ll earn about the same again (plus a 5% uplift). Your provisional tax payments go towards your final or “terminal” tax bill once your accounts are completed.
If you’ve paid too much, you’ll receive a refund or credit.
If you’ve paid too little, you’ll have terminal tax to pay (usually by 7 April).
Because provisional tax is based on the past, it often needs reviewing when profits change.
Why review your Provisional Tax?
A review before your next payment can help you:
• Avoid overpaying tax – if profits are down, we can often reduce your next payments.
• Avoid surprise bills – if profits are up, we can plan ahead or use tax pooling to top up later.
• Protect cash flow – keep more cash in your business.
• Stay compliant – meet IRD expectations and avoid unnecessary interest or penalties.
Our goal: no surprises at year-end.
How we can help
Our Provisional Tax Review service includes:
• Reviewing your year-to-date results against last year.
• Checking if your current payments reflect how the business is tracking (expected profit levels).
• Recommending adjustments or tax pooling options if needed to smooth things out.
• Confirming you’re using the right calculation method – whether that’s the IRD’s standard approach or an alternative that better suits your current position.
We’ll explain everything in plain language and give you clear, practical next steps.
Ready for peace of mind?
A Provisional Tax Review starts from $300 + GST.
Chat with your CT advisor or give us a call – we’ll help you make sure your tax payments fit your business reality.