GST Penalty & Interest Calculator

Calculate the total penalties and use-of-money interest on late GST payments. Enter the GST owing, the due date, and when you expect to pay.

How GST Penalties Work in New Zealand

Inland Revenue applies a structured penalty regime for late GST payments. The penalties are calculated as a percentage of the unpaid tax and accumulate over time, making it increasingly expensive to delay payment.

The Penalty Timeline

Day 1 (the day after the due date): A 1% initial late payment penalty is charged on the unpaid balance. If you owe $10,000 in GST and miss the due date by even one day, that's an immediate $100 penalty.

Day 7: If the GST is still unpaid after 7 days, an additional 4% incremental penalty is charged on the unpaid balance (including the initial 1% penalty). On the original $10,000, that's $404 ($10,100 x 4%).

Monthly thereafter: A further 1% incremental penalty is charged on the unpaid balance (including all prior penalties) on the same day of each subsequent month until the debt is paid in full. These compound, so the balance grows each month.

Use-of-Money Interest (UOMI)

On top of penalties, IRD charges use-of-money interest on the unpaid GST from the original due date until the date of payment. The current taxpayer rate for underpaid tax is set by the Commissioner and is updated periodically. UOMI is calculated daily and compounds, making it a significant cost on larger debts held for extended periods.

Getting Penalties Remitted

IRD can remit (cancel) penalties in certain circumstances, including: if the late payment was due to circumstances beyond your reasonable control (natural disaster, serious illness), if you have a good compliance history and the late payment was an isolated incident, or if you enter into an instalment arrangement before the due date. Penalties are much harder to get remitted after the fact, so if you know you'll be late, contact IRD before the due date.

For the full suite of GST tools, visit the GST.co.nz homepage. For 200+ other NZ calculators, visit Calculate.co.nz.