Are you paying the right
KiwiSaver tax rate?

Q: What is a PIR (Prescribed Investor Rate) in New Zealand?

A PIR is the tax rate applied to your income from KiwiSaver and other multi-rate PIE funds. It is set by IRD based on your taxable income in the prior two tax years and can be 10.5%, 17.5%, or 28%. It caps your investment tax rate — even if your marginal income tax rate is 30%, 33%, or 39%, you only pay up to 28% on PIE income.

Q: What are the PIR income thresholds for 2025-26?

From 1 April 2025, the PIR thresholds are: 10.5% if your taxable income (including PIE income) was $15,600 or less in both of the prior two tax years; 17.5% if your income was $53,500 or less in both years (and you don't qualify for 10.5%); 28% if your income exceeded $53,500 in either of the prior two years, or exceeded $78,100 in either year when combined with PIE income.

Q: What happens if I use the wrong PIR?

If your PIR is too high, IRD will issue a PIE tax credit which offsets any income tax owed, with any remainder refunded. If your PIR is too low, IRD will calculate the shortfall as a PIE debt which is added to your income tax bill. You will not be penalised for overpaying (using a higher PIR than required), but underpaying means a tax bill at year end.

Q: How often should I check my PIR?

You should check your PIR every year, ideally at the start of each tax year (1 April). Your PIR is based on the prior two years' income, so if your income has changed significantly — due to a pay rise, job change, rental income, or investment income — your correct PIR may have changed. Your PIE fund will use whatever PIR you last told them, and will not update it automatically.

Q: Does PIE income count toward the PIR threshold?

Yes. When checking whether you cross the $78,100 upper threshold, you must include both your taxable income and your attributed PIE income. For the lower $53,500 threshold check, it is your taxable income and PIE income combined. The $15,600 threshold uses the same combined income figure.

Question 1

Why is PIE tax capped at 28% when my income tax rate is 33% or 39%?

Answer

The 28% PIE cap is a deliberate government policy to encourage New Zealanders to invest through managed funds rather than directly. It creates a tax incentive — a high-income earner on 39% pays only 28% on their KiwiSaver and PIE fund returns. On a $50,000 balance earning 6%, that cap saves around $550 per year compared to being taxed at the marginal rate. This is one of the primary financial advantages of KiwiSaver for high earners.

Question 2

How do I check what PIR my KiwiSaver provider is using?

Answer

Log in to your KiwiSaver provider's online portal or app — your current PIR is usually shown in your account settings or profile. Providers include Simplicity, Kernel, Milford, Fisher Funds, Generate, BNZ KiwiSaver, ANZ KiwiSaver, and others. You can also check via myIR on the IRD website, which shows your PIR on record. If you want to update it, contact your provider directly — most have an online form or in-app option.

Question 3

What income do I include when calculating my PIR?

Answer

Include all taxable income — salary and wages, self-employment income, rental income, interest, dividends from non-PIE sources, and any other assessable income. Also include your attributed PIE income from the relevant year (shown on your PIE tax certificate). Do not include income that is exempt from tax, such as most government benefits, child support received, or tax-exempt income from a transitional residency period.

Question 4

I've been on 28% for years. How much have I been overpaying?

Answer

If you've been on 28% when 17.5% was correct, IRD will calculate a PIE credit for each affected year and refund the difference (after offsetting any income tax owed). However, this only applies going forward from when IRD assesses it — you cannot generally claim back several years of overpaid PIE tax in a lump sum. The best time to correct your PIR is now, at the start of a new tax year. Contact your provider to update immediately, then ensure you're filing your IR3 so IRD performs the year-end PIE reconciliation.

Question 5

Does the PIR threshold change apply to me if I'm already invested?

Answer

Yes — the April 2025 threshold changes affect all existing investors. The new thresholds are $15,600, $53,500, and $78,100 (previously $14,000, $48,000, and $70,000). If your income sits between the old and new thresholds — for example, you earned $50,000 and were previously on 28%, you may now qualify for 17.5%. Your fund will not update your PIR automatically. You need to check your eligibility and notify your provider.

Question 6

Can I set a higher PIR than I need to — for example, 28% even if I qualify for 17.5%?

Answer

Yes — you are allowed to use a higher PIR than required. Many investors do this deliberately to avoid an underpayment risk. If you overpay, IRD will credit the difference at year end and refund any surplus. However, there is no financial advantage to overpaying — you're effectively giving IRD an interest-free loan. If you qualify for 17.5%, setting 17.5% means more money in your fund growing through the year and a possible refund at year end rather than a credit. Setting the correct rate is always recommended.

Are you paying the right
KiwiSaver tax rate?

PIR and PIE tax: quick answers

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Are you paying the rightKiwiSaver tax rate?

PIR and PIE tax: quick answers

About this calculator

Disclaimer

Are you paying the right
KiwiSaver tax rate?