KiwiSaver PIR Rate Explained NZ: Which Rate Are You On?

Your KiwiSaver PIR (prescribed investor rate) determines the tax rate applied to your investment returns inside your fund. Your provider uses the rate you give it (or 28% if you give none), so a wrong PIR means the wrong amount of tax is deducted during the year until IRD squares it up in your annual assessment. Here is how the rate is set and what happens when it’s wrong.

What Is a PIR Rate?

PIR stands for prescribed investor rate. It is the tax rate applied to your KiwiSaver investment income — capital gains, dividends, and interest earned inside the fund. KiwiSaver funds are structured as PIE (Portfolio Investment Entity) funds, which means tax is calculated and deducted inside the fund at your individual PIR, rather than being included in your personal tax return.

There are three PIR rates for KiwiSaver:

PIR rate	Taxable income (excl. PIE income)	AND combined income (taxable + PIE income)
10.5%	≤ $15,600	≤ $53,500
17.5%	≤ $53,500	≤ $78,100
28%	Above either threshold, OR non-resident	—

Thresholds effective from the 2025–26 income year (previously $14,000 / $48,000 / $70,000), per the Taxation (Budget Measures) Act 2024. Both the “taxable income” test AND the “combined income” test must be satisfied for a given row to apply — if either figure exceeds the threshold, you move to the next-higher rate. For most members whose only PIE income is their KiwiSaver fund’s returns, the combined-income test rarely changes the outcome, but it matters if you also hold other PIE investments (e.g. managed funds outside KiwiSaver) or have a high-growth year on a large balance.

The rate is based on your taxable income from the previous two income years: IRD uses the lower rate either year gives.

How PIR Rates Are Calculated

IRD uses a two-year lookback rule. To find your correct PIR:

Look at your taxable income for the previous two tax years (31 March year-end)
Your PIR is the lower of the rates the two years give, so one year under a threshold is enough. IRD’s guide to PIEs (IR855) puts it this way: “Your PIR is determined based on the lower rate from either of the last 2 years’ income.”
IRD’s test technically also checks your combined income (taxable income plus PIE income, e.g. KiwiSaver/PIE fund returns) against a second, higher threshold for each rate ($53,500 combined for the 10.5% rate, $78,100 combined for the 17.5% rate); see the table above. This rarely changes the outcome if your only PIE income is a typical KiwiSaver balance, but it can matter if you hold other PIE investments too.

Simple rule of thumb (thresholds effective from the 2025–26 income year), assuming no other PIE income:

Earned ≤ $15,600 in either of the last two years → 10.5%
Otherwise, earned ≤ $53,500 in either of the last two years → 17.5%
Earned over $53,500 in both of the last two years → 28%

Examples

Example 1: Emma earned $62,000 last year and $58,000 the year before. → Both years over $53,500 → PIR = 28%

Example 2: Tom earned $41,000 last year and $38,000 the year before. → Both years between $15,601–$53,500 → PIR = 17.5%

Example 3: Sarah earned $12,000 last year (part-time student) and $11,000 the year before. → Both years ≤ $15,600 → PIR = 10.5%

Example 4: Alex earned $56,000 last year and $43,000 the year before. → The year before was under $53,500, and IRD uses the lower rate from either year → PIR = 17.5% (as long as taxable plus PIE income that year was $78,100 or under)

Why Your PIR Rate Matters

Your PIR is applied to all investment income earned inside your KiwiSaver fund. On a $100,000 balance earning 8% per year:

PIR rate	Tax on $8,000 return	After-tax return
10.5%	$840	$7,160
17.5%	$1,400	$6,600
28%	$2,240	$5,760

Difference between 10.5% and 28%: $1,400/year on a $100,000 balance. Compounded over 20 years, this adds up to tens of thousands of dollars.

What IRD does with a wrong rate. IRD’s end-of-year PIE calculation, part of your annual income tax assessment, works out the PIR you should have used for the full year and compares the tax paid with the tax due:

PIR too high: the overpaid tax becomes a PIE credit. In IRD’s words, “This can be used to reduce any income tax you might have to pay. Any remaining credit is refunded.” Until then the extra tax sits with IRD rather than growing in your fund.
PIR too low: the shortfall is a PIE debt, added to any income tax you have to pay. If your residual income tax including a PIE debt is more than $5,000, provisional tax applies for the following year.
A loss year: when a fund makes a loss it credits you tax at your PIR, so too high a PIR gives you too large a credit and IRD collects the difference as a PIE debt.

The square-up happens after the tax year ends, so the rate your provider holds decides what is deducted in the meantime.

The top PIR cap for higher earners

The top PIR is 28%, below the top two income tax rates, so returns inside a PIE are taxed at less than the same income would be at your marginal rate:

Income tax bracket (from 1 April 2026)	PIR on KiwiSaver	Difference on returns
33% ($78,101 to $180,000)	28%	5 percentage points
39% (over $180,000)	28%	11 percentage points

For example, a fund returning $16,000 in a year (8% on a $200,000 balance) would pay $5,280 if taxed at 33%, against $4,480 at a 28% PIR: $800 less tax that year.

How to Find Your Current PIR Rate

Via myIR:

Log in to ird.govt.nz
Go to “Income tax” and check your income for the last two years
Use the thresholds above to work out your correct PIR

Via your provider: Your KiwiSaver provider holds your nominated PIR. You can see it in your member portal or annual statement.

Via IRD’s questions: IRD’s Find your prescribed investor rate (PIR) page walks through the tests using your income for each of the last two tax years.

Common PIR Rate Mistakes

Being stuck on 28% when you should be on 17.5%

This is the most common issue. If you initially set 28% (or were defaulted to it) and your income has since dropped to $53,500 or below in either of the last two income years, you are overpaying tax (IRD uses the lower rate from either year).

Fix: Update your PIR with your provider. See our how to update your KiwiSaver PIR rate guide.

Being defaulted to 28% without reviewing it

Many providers default new members to 28% — the maximum rate — if no PIR is provided. If you never actively nominated your PIR, you may be on 28% regardless of your actual income.

Fix: Your provider portal or annual statement shows the rate it holds. A 28% rate with taxable income of $53,500 or under in either of the last two years (and the combined-income test met) means more tax is deducted during the year than is due, until the rate is updated or IRD squares it up.

PIR not reflecting a career change or return to study

If you took time off, changed careers or returned to study, one lower-income year is enough for your correct PIR to drop, because IRD uses the lower rate from either of the last two income years. Tell your provider the new rate.

Confusing PIR with your income tax rate

These are different. Your income tax rate (PAYE) applies to your wages. Your PIR applies only to investment income inside your KiwiSaver (and any other PIEs). They can be different rates, and the PIR calculation uses a different income threshold scale.

PIR Rate and Other Income Sources

Your PIR calculation uses all taxable income — not just your salary. This includes:

Wages and salary
Rental income
Business income
Interest (from bank accounts etc.)
Overseas income

If you have rental property or self-employment income that pushes your total income above a threshold, your PIR needs to reflect that — even if your salary alone would put you in a lower bracket.

New to New Zealand

The two-year test still applies when you have just arrived. IRD’s guide for resident individuals who invest in PIEs (IR855, April 2025) says you must include your worldwide income when working out your PIR in your first two years as a New Zealand tax resident, although transitional residents may choose to leave out their foreign-sourced income for either or both of those years.

What Happens at Age 65?

When you reach 65 and become eligible to withdraw your KiwiSaver balance, PIE tax rules still apply to any funds you leave invested. Your PIR continues to be applied to investment returns inside the fund until you withdraw. If you take a lump sum, there is no additional tax — the PIE tax already paid inside the fund is your final tax obligation on that investment income.

For more on retirement withdrawal options, see our KiwiSaver at 65 guide.

Frequently Asked Questions

What is a PIR rate for KiwiSaver? A PIR (prescribed investor rate) is the tax rate applied to investment income earned inside your KiwiSaver PIE fund. The three rates are 10.5%, 17.5%, and 28%, based on your taxable income in the previous two years.

How do I know which PIR rate I should be on? Check your taxable income for each of the last two income years and use whichever year gives the lower rate (thresholds updated for the 2025–26 income year). If, in either year, taxable income was ≤ $15,600 and combined income including PIE income was ≤ $53,500: 10.5%. Otherwise, if in either year taxable income was ≤ $53,500 and combined income was ≤ $78,100: 17.5%. If neither year meets those tests: 28%.

What happens if I’m on the wrong PIR rate? IRD’s end-of-year PIE calculation, part of your annual income tax assessment, works out the tax at the correct PIR. If your PIR was too high, the extra tax becomes a PIE credit that reduces any income tax you owe, and any remaining credit is refunded. If it was too low, the shortfall is a PIE debt added to your income tax bill. In a year your fund makes a loss, too high a PIR works the other way: the fund’s tax credit was too large and IRD collects the difference.

Can I choose my own PIR rate? You nominate your PIR when you join a KiwiSaver scheme, and you can update it at any time by contacting your provider. However, you must nominate the correct rate based on your income — you cannot choose a lower rate to reduce tax if you don’t qualify.

Does the PIR rate apply to my entire KiwiSaver balance? No. The PIR applies only to investment income (returns) earned inside the fund each year — not the principal balance. Each year, your provider calculates the taxable income, applies your PIR, and deducts the tax before reporting your after-tax return.

Is KiwiSaver tax different from income tax? Yes, if your scheme is a PIE (Portfolio Investment Entity); a widely-held superannuation scheme is taxed at 28% instead (IRD: taxing KiwiSaver income). In a PIE, investment income inside the fund is taxed at your PIR, not at your marginal income tax rate. If your PIR is correct, KiwiSaver returns don’t go in your personal tax return; IRD’s end-of-year PIE calculation only changes your assessment when the rate was wrong.

What if I don’t provide a PIR rate? Your provider will default you to 28%: the maximum rate. This is IRD’s required default. If 28% is higher than your correct rate, more tax is deducted than is due until you update your PIR; IRD’s end-of-year PIE calculation credits the difference against your income tax or refunds it.