Reference
NZ Use of Money Interest (UOMI) Rates 2026
Last updated:
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8.97%
Underpayment Rate
2.25%
Overpayment Rate
16 Jan 2026
Rates Effective From
Use of Money Interest (UOMI) is the interest IRD charges when you pay tax late or underpay, and pays you when you have overpaid. It is set in line with market interest rates and updated by Order in Council. Interest is calculated daily, does not compound, and is separate from late payment penalties. It matters most for provisional taxpayers.
Provisional Tax Calculator Income Tax Calculator Tax Refund CalculatorCurrent UOMI Rates
| Direction | Rate (per annum) | Effective |
|---|---|---|
| Underpayment (IRD charges you) | 8.97% | From 16 January 2026 (was 9.89%) |
| Overpayment (IRD pays you) | 2.25% | From 16 January 2026 (was 3.27%) |
How UOMI Works
| Point | Detail |
|---|---|
| Calculated | Daily on the underpaid or overpaid amount |
| Compounding | No, it is simple interest |
| Penalties | Separate; UOMI is interest, not a penalty, though late payment penalties can also apply |
| Who it affects most | Provisional taxpayers whose residual income tax is over the safe-harbour threshold |
| Rate setting | Adjusted by Order in Council to track market rates; the underpayment rate sits well above the overpayment rate |
Because the underpayment rate is much higher than the overpayment rate, it is expensive to underpay tax and poor value to deliberately overpay. Provisional taxpayers can manage UOMI exposure through the standard, estimation or AIM methods, or by using tax pooling.
Source: IRD - Interest on overpayments and underpayments. See also our NZ Provisional Tax reference.
Cite this page
NZ Use of Money Interest (UOMI) Rates 2026. Calculate.co.nz. https://www.calculate.co.nz/reference/nz-uomi-rates.php (retrieved 16 October 2026).
Figures are compiled from the official sources listed above and reviewed twice monthly.