The Primary Production (PP) averaging feature in TaxPlan calculates the averaging adjustment applied to a primary production client's taxable income. To calculate correctly, TaxPlan needs to know the client's taxable income for each year they were in the averaging system, including years where the actual income was zero. If a year is left blank or entered as $0, TaxPlan treats that year as outside the averaging system, which affects the adjustment calculation.
How primary production averaging works in TaxPlan
Primary production averaging in TaxPlan works the same way as the averaging calculation on the tax return. Each income year included in the averaging calculation requires a taxable income value to be entered. When TaxPlan sees a $0 in an averaging year, it cannot distinguish between "the client earned nothing that year" and "the client was not in the averaging system that year", so it excludes the year from the calculation.
This is expected behaviour, not a calculation error.
The zero income limitation
If your client had $0 taxable income in one or more years during their averaging period, entering $0 will cause those years to be excluded from the averaging adjustment. This produces an incorrect result — TaxPlan calculates as though the client has fewer years of averaging history than they actually do.
Example: A client who has been in averaging for five years (FY22–FY26) with $0 taxable income in FY22–FY25 and $200,000 in FY26. If FY22–FY25 are entered as $0, TaxPlan treats FY26 as the client's only averaging year and calculates a NIL adjustment — which understates the averaging benefit.
Workaround: enter $1 for zero income years
To correctly represent years where the client was in the averaging system but had $0 taxable income, enter $1 instead of $0 in the income field for those years.
To apply the workaround:
Open the relevant client in TaxPlan.
For each year where the client had $0 taxable income but was in the averaging system, enter 1 in the income field for that year.
Review the updated averaging adjustment — it should now reflect the correct number of averaging years.
Using $1 instead of $0 is a negligible difference in dollar terms but correctly signals to TaxPlan that the client was participating in the averaging system in those years.
Need help?
If you're unsure whether this applies to your client's situation or the adjustment still doesn't look right after applying the workaround, reach out to our support team through the chat widget.