Provisional tax – impact on employees who receive one-off amounts of income without tax deducted
This is an update of QB 19/03 Provisional tax – impact on employees who receive one-off amounts of income without tax deducted. The update is necessary to reflect various amendments made to the provisional tax regime to better integrate it with IR filing systems and provide some debit interest relief, as well as to accommodate the change to automatic assessments and to capture bright-line income which can result in provisional tax obligations.
It is aimed at salary and wage earners who derive one-off income not taxed at source.
Recent changes mean debit interest exposure for persons with residual income tax (RIT) of $60k or less no longer apply to provisional tax instalments that have been missed or are short paid, provided RIT is paid by the terminal tax date. In addition, provisional taxpayers with RIT of more than $60k can now pay their expected amount of RIT by the third instalment date (P3) and not have exposure to debit interest.
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