September Tax News
- Apex Accountancy
- Sep 20, 2022
- 2 min read
About Provisional Tax
Provisional tax helps you manage your income tax. You pay it in instalments during the year instead of a lump sum at the end of the year. You'll have to pay provisional tax if you had to pay more than $5,000 tax at the end of the year from your last return.
It's payable the following year after your tax return. For example, if your residual income tax from your 2022 return is more than $5,000, then you'll need to pay provisional tax during the 2023 tax year.
Provisional taxpayers often earn:
self-employed income- extra income like Uber income and side hustle income
rental income
income earned as a contractor
income from a partnership
overseas income.
There are some situations where you may need to pay provisional tax on your reportable income.
Reportable income is income information that Inland Revenue receives regularly from a third party (e.g. an employer, a bank, etc) for an individual and a tax year.
This includes:
PAYE income payments
income payments
ACC attendant care payments
Prescribed Investment Entity (PIE) income
Employee share scheme income with tax withheld
NZ resident interest/dividends
Non-Resident interest/dividends/royalties
Taxable Maori Authority distributions
These can be due to:
incorrect use of tax code or rate for PAYE, interest, or dividends
lump sum payments that did not have tax deducted, or not enough tax deducted
employee share scheme income that did not have tax deducted
property sales subject to the bright-line property rule.
Please budget for your August 28, 2022 Provisional tax.
Calculating YOUR Charge out rate
In order to calculate an accurate charge out rate there are many factors you need to take into account. From your target income to the amount of hours you can manage ANZ has all the tips and tricks.
INFLATION RATE - NOW 7.3%
The consumers price index (CPI) is a measure of inflation for New Zealand households. It records changes in the price of goods and services. It influences interest rates and is used to calculate changes to benefit payments.
