Al lot of our clients are unsure how to make provision for income tax payable and sometimes they estimate or guess a certain percentage and then put that percentage of income aside in a separate bank account to make provision for future income tax payable.
If you are using Xero, then guessing a percentage is not the best way to estimate your income tax payable. With this video,
I will show you how to calculate your income tax payable at any stage during the year with quite a high level of accuracy.
An obvious prerequisite for the method explained in this video is that you must use Xero as a bookkeeping platform.
Link to the IRD Tax on Annual Income calculator: https://www.ird.govt.nz/income-tax/income-tax-for-individuals/how-income-is-taxed/work-out-tax-on-your-yearly-income
Link to the calculation Spreadsheet: https://1drv.ms/x/s!AqpEEv_Q3cKigsUMlJ01n8vyuFJH-Q?e=868py9