AIM vs Standard Provisional Tax Calculator NZ 2026/27

Quick answer: Standard uplift fixes your instalments at 105% (or 110%) of last year's residual income tax, paid in three instalments regardless of how this year turns out. AIM calculates each payment from your actual accounting income as the year goes, so it moves with your real results instead. Neither method changes your total tax bill, only the timing. Enter your figures below to compare them.

This calculator compares New Zealand's two most different provisional tax methods: the standard uplift method, which fixes your instalments to last year's residual income tax plus a set percentage, and AIM, the Accounting Income Method, which calculates each payment from your actual accounting profit as the year unfolds. Both are simply ways of paying the same year's income tax bill in instalments rather than as one lump sum at year end, so neither method reduces or increases the tax you ultimately owe. What changes is the timing, the cash flow, and your exposure to use of money interest if your income moves a long way from last year's result. Enter your prior year residual income tax, whether you have already filed last year's return, and your expected taxable profit for the current year, and the calculator works out your standard uplift instalments and due dates, estimates what AIM would collect based on your expected profit, and shows the gap between the two so you can see which method fits your situation. It updates instantly as you type, with no need to press a button. This is built for self-employed people, contractors, and small business owners deciding how to handle provisional tax, particularly those whose income has changed noticeably from last year. Figures are indicative only, so confirm your final method and numbers with Inland Revenue or your accountant.

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Updated July 2026  Current rates and legislation applied.

Verification & Methodology

Provisional tax threshold: required once residual income tax (RIT) exceeds $5,000 for the prior year.
Standard uplift: 105% of prior year RIT if last year's return was already filed, or 110% if it was not, split into three equal instalments.
2026/27 instalment dates (31 March balance date, two-monthly GST filer): 28 August 2026, 15 January 2027, 7 May 2027. Terminal tax: 7 February 2028, or 7 April 2028 with a tax agent.
AIM estimate: calculated on the 2026/27 income tax brackets (10.5% to $15,600, 17.5% to $53,500, 30% to $78,100, 33% to $180,000, 39% above), applied to your expected profit, using the central paye-data.js rate file.
Last verified: 26 July 2026, against current Inland Revenue provisional tax guidance and the AIM method guidance.
Source data: Inland Revenue (ird.govt.nz) and the central rate file paye-data.js (TAX_BRACKETS, incomeTax()).

How the two methods actually work

The standard uplift method is the default for most provisional taxpayers. It takes your residual income tax from the prior year and multiplies it by 105% if you have already filed that year's return, or 110% if you have not, then splits the total into three equal instalments. It does not look at what you are actually earning this year at all. The advantage is certainty: if you pay the correct uplift amount by each due date, you are generally protected from use of money interest even if your actual tax bill for the year turns out higher. The trade-off is that a fixed uplift can drift a long way from reality if your income has genuinely changed.

AIM works differently. Instead of a fixed formula based on last year, AIM-capable accounting software calculates your provisional tax from your actual accounting income as each period closes, generally in line with your GST filing cycle. If profit is strong in a period, the payment is higher; if it is quiet, the payment is lower. Because each payment reflects real, current results rather than a guess based on the past, there is little scope to build up a large shortfall or a large overpayment, provided the software is kept up to date and used correctly.

Worked example: a growing sole trader business

Consider a self-employed tradesperson whose prior year residual income tax was $14,000, based on a return already filed with Inland Revenue. Under the standard uplift method, this year's provisional tax is $14,000 × 105% = $14,700, split into three instalments of $4,900 each, due 28 August 2026, 15 January 2027 and 7 May 2027.

Business has picked up, and this year's expected taxable profit is $80,000. Using the 2026/27 income tax brackets, the tax on $80,000 works out to $16,277.50: $15,600 taxed at 10.5% ($1,638), the next $37,900 at 17.5% ($6,632.50), the next $24,600 at 30% ($7,380), and the remaining $1,900 at 33% ($627), which totals $16,277.50.

That is $1,577.50 more than the $14,700 the standard uplift instalments will collect during the year. Paying the standard uplift amount on time still protects this taxpayer from use of money interest, but the extra $1,577.50 becomes payable as a single top-up at terminal tax on 7 February 2028 (or 7 April 2028 with a tax agent). Under AIM, that same growth would have been picked up period by period through the year in six smaller increases rather than arriving as one bill after balance date, at the cost of needing AIM-capable software and up-to-date books throughout the year.

When standard uplift suits you better

• Your income is fairly steady, or changing only modestly, from year to year.
• You would rather have three fixed, predictable amounts to budget for than track periodic accounting income.
• You do not currently use, or do not want to pay for, AIM-capable accounting software.
• You are comfortable that any top-up at terminal tax can be met from savings if your income has grown, since paying the standard uplift on time protects you from use of money interest regardless of the final result.

When AIM suits you better

• Your income is seasonal, volatile, or you are unsure what this year will look like compared with last year.
• You are in your first year or two of trading, so there is no reliable prior year RIT figure to uplift from.
• You want to avoid a large terminal tax bill building up unseen, or you want to avoid overpaying and tying up cash when income has genuinely dropped.
• You already keep current, accurate books in AIM-capable accounting software, so the extra reporting is not a new burden.

Use of money interest and why the timing matters

Use of money interest (UOMI) is what Inland Revenue charges when provisional tax is underpaid relative to your actual year-end liability. Standard uplift manages this risk by giving you certainty: pay the correct uplift amount by each due date and you are shielded from UOMI on any shortfall that only shows up at terminal tax, even if your income has grown considerably. AIM manages the same risk differently, by keeping each payment close to your real, current results, so a large shortfall has little chance to build up in the first place. Neither method is inherently cheaper over the full year; they simply spread the same tax bill differently and carry different risks if your estimate of the year ahead turns out to be wrong.

If your prior year residual income tax was $5,000 or less, none of this applies to you yet: you are not required to pay provisional tax under either method and simply settle your full tax bill as terminal tax after the year ends.

Getting started and what this calculator assumes

To use AIM, you need to keep your accounting records in software that Inland Revenue recognises as AIM-capable, with your income and expenses entered as you go rather than caught up at year end. AIM is open to companies, trusts, partnerships and sole traders alike, though it works best for those with organised, current bookkeeping, since the calculation depends on accurate period-by-period figures. If you are not sure whether your accounting software supports AIM, check with your provider or accountant before electing into it.

This calculator estimates your income tax using the individual and sole trader marginal tax brackets, not the flat 28% company tax rate, so company results will differ. The AIM per-period figure shown is a simple even split of the estimated annual tax across six periods for illustration only; real AIM payments follow your actual profit period by period, so they are rarely even. The 2026/27 instalment and terminal tax dates shown assume a standard 31 March balance date and two-monthly GST filing; other balance dates and filing frequencies have different due dates. All figures are indicative and rounded for display, so confirm your specific method, dates and amounts with Inland Revenue or a registered tax agent before relying on them.

Who this calculator is for

This tool is for self-employed people, contractors, and small business owners who already know they are, or expect to become, provisional taxpayers, and want a clear side-by-side view of what the standard uplift method and AIM would each ask of them this year. It is particularly useful if your income has moved noticeably from last year, since that is exactly the situation where the two methods diverge most.

Frequently Asked Questions

What is the difference between AIM and the standard uplift method?

The standard uplift method fixes your provisional tax instalments to last year's residual income tax plus 105% or 110%, paid in three instalments regardless of how this year actually turns out. AIM calculates each payment from your actual accounting profit as the year progresses, so instalments rise and fall with your real results instead of last year's figure.

Does AIM change how much total tax I pay?

No. Both methods are simply ways of paying the same year's income tax bill in instalments rather than as one lump sum. AIM and standard uplift can produce different instalment amounts and timing, but your final tax liability for the year is settled the same way either method is used, through your end of year tax return.

Do I need special software to use AIM?

Yes. AIM is only available if you keep your accounting records in software that Inland Revenue recognises as AIM-capable. The software calculates your provisional tax payment from your actual income and expenses each period. Without compatible, up-to-date bookkeeping, AIM is not practical to use correctly.

Which method protects me from use of money interest?

Under the standard uplift method, paying the correct uplift amount by each due date generally protects you from use of money interest even if your actual tax bill ends up higher. Under AIM, because each payment is based on your real accounting income at the time, you are not building up a hidden shortfall, so use of money interest risk is minimal if the software is used correctly and payments are made on time.

Can I switch from standard uplift to AIM partway through the year?

You generally need to elect into AIM through compatible software from the start of an instalment period, rather than switching mid-instalment. If you are considering a change, talk to your accounting software provider or tax agent about the earliest period you can move onto AIM.

What if my income has dropped a lot this year?

If your profit has fallen well below last year's, standard uplift instalments (based on last year's higher figure) can mean overpaying during the year, with the excess refunded after your return is filed. AIM would track the lower actual profit as you go, so you would not tie up that cash in the meantime. The estimation method is another option that lets you lower your standard instalments based on a revised forecast.

Is AIM available to companies as well as sole traders?

Yes. AIM is open to companies, trusts, partnerships and sole traders that keep their accounting records in AIM-capable software. It is not restricted to any one business structure, though it suits taxpayers with organised, current bookkeeping best, since the calculation depends on accurate period-by-period figures.

What if my prior year residual income tax was $5,000 or less?

If your residual income tax for the prior year was $5,000 or less, you are not required to pay provisional tax at all under either method. You simply pay your full tax liability as terminal tax after the year ends, so comparing AIM and standard uplift is not necessary in that situation.