PIR Rate — Frequently Asked Questions

Your PIR is the tax rate applied to income from your KiwiSaver and other PIE (Portfolio Investment Entity) funds. Your fund pays tax at this rate on your behalf — it's a final tax, so you don't include this income in your personal return.

It matters because many New Zealanders are on the wrong rate. The default when you join is 28%, and providers never update it automatically. If your income qualifies you for 17.5%, you're permanently overpaying until you tell your fund.

The thresholds changed on 1 April 2025 — the first change in many years. The new rates are:

• 10.5% — taxable income ≤ $15,600 in both prior years (and combined income including PIE ≤ $53,500)
• 17.5% — taxable income ≤ $53,500 in both prior years (and combined income ≤ $78,100)
• 28% — income exceeded $53,500 in either prior year, or combined income exceeded $78,100. Also the default if you've never set a PIR.

The 17.5% threshold increased by $5,500 from $48,000 to $53,500 — the most impactful change for the most people.

Your PIR for the current year is based on the two most recently completed tax years — not your current year income. For 2025–26, that means your income in 2023–24 and 2024–25.

Crucially: you use whichever year gives you the lower PIR. You don't need both years to be below a threshold — one qualifying year is enough. If you earned $70,000 in 2023–24 but only $45,000 in 2024–25, your PIR is 17.5% because the lower year wins.

Recalculate every April when a new tax year closes. Look back at the two most recently completed years and use whichever gives you the lower rate. If one year was below $53,500 and the other was above, the lower year wins and your PIR is 17.5%.

For anyone with variable income — self-employed, part-time, career breaks, parental leave — this rule often means you qualify for a lower rate than you'd expect based on your average earnings.

Almost certainly 28%. IRD requires funds to apply 28% as the default when no PIR is provided or when the PIR hasn't been updated. If you joined KiwiSaver, were auto-enrolled, or haven't actively logged in and changed your rate, 28% is what your fund is using.

Check your online account — look for 'tax settings', 'PIR', or 'tax rate' in your provider's portal. If it says 28% and your income was under $53,500 in either of the last two years, you're overpaying.

Too high: IRD issues a tax credit at year end for the overpayment. You get the difference back, but with no interest — you've effectively given IRD an interest-free loan for the year, and lost the compounding returns on that money.

Too low: IRD calculates a PIE debt added to your income tax assessment. There's no grace period — the shortfall plus use-of-money interest is owed. If you think your PIR might be too low, update it immediately to stop the debt growing.

Yes. Your PIR needs to be updated with every PIE fund you hold separately. IRD doesn't push the update to your providers — you must notify each one directly. Log in to your KiwiSaver portal and your bank's online banking and update each tax settings section individually.

Potentially yes — but it depends on your prior year income, not your current year. Your PIR for 2025–26 is based on 2023–24 and 2024–25. If your income in 2024–25 dropped below $53,500 due to parental leave, your PIR for 2025–26 is 17.5%, even if you're back earning more now.

Parental leave payments from the government count as income for PIR purposes. Factor those in when calculating your total income for the year.