Provisional vs Terminal Tax Calculator

This calculator works out your terminal tax, the final wash-up between the income tax you actually owe for the year and the provisional tax you paid in instalments along the way. New Zealand businesses and the self-employed pay provisional tax during the year, in instalments, as an estimate of the tax on income that has no PAYE deducted. After the year ends and the actual result is known, the true tax liability, the residual income tax, is compared with what was paid: if you paid too little provisional tax, you owe the shortfall as terminal tax; if you paid too much, you receive a refund. Knowing this figure in advance helps you avoid a nasty surprise and set aside the right amount. This tool makes it clear. You enter your total income tax liability for the year, the residual income tax, and the provisional tax you have already paid, and the calculator works out the terminal tax to pay, or the refund due, and shows your inputs for reference. The results update as you type. Use it to estimate your terminal tax bill, to plan the cash you will need at the terminal tax date, or to check whether your provisional payments were on track. The terminal tax is simply your total tax liability minus the provisional tax paid: a positive figure is payable, a negative figure is refunded. Getting your provisional estimate close to the final liability matters, because a large shortfall can attract use-of-money interest from Inland Revenue, while a large overpayment ties up cash you could have used. If you find you have significantly underpaid, options like tax pooling can reduce the interest cost of catching up. This calculates the wash-up; the rules around provisional methods, interest and due dates are detailed, so confirm with your accountant.

Terminal tax = total tax liability (RIT) - provisional tax paid. Positive means pay; negative means a refund. Large shortfalls may attract use-of-money interest. Confirm with your accountant.