Your PIR (Prescribed Investor Rate) is the tax rate applied to returns inside PIE funds — which includes most managed funds, index funds, and KiwiSaver on NZ investing platforms. Setting it incorrectly is one of the most common and costly mistakes NZ investors make.
There are three PIR rates: 10.5%, 17.5%, and 28%. Your correct rate is based on your taxable income in the two most recent tax years. If your income exceeded $48,000 in both years, your PIR is 28%. If you're unsure, set 28% — setting it too high gets a credit; setting it too low means you owe IRD the shortfall.
What Is a PIR Rate?
PIR stands for Prescribed Investor Rate. It’s the flat tax rate that PIE (Portfolio Investment Entity) funds deduct from your investment returns before paying them to you.
PIE funds — which include most managed funds, index funds, and KiwiSaver products offered by Sharesies, InvestNow, Kernel, Simplicity, and others — are taxed differently from regular investments. Instead of being added to your personal income and taxed at your marginal rate, PIE returns are taxed separately at your PIR.
The key advantage: the maximum PIR is 28%, even if your marginal income tax rate is 33% or 39%. This makes PIE funds tax-efficient for higher earners.
The Three PIR Rates
| PIR | Who qualifies |
|---|---|
| 10.5% | Your taxable income was $14,000 or less in either of the two most recent tax years |
| 17.5% | Your taxable income was $48,000 or less in either of the two most recent tax years (and you don’t qualify for 10.5%) |
| 28% | Your taxable income exceeded $48,000 in both of the two most recent tax years |
Tax years run 1 April to 31 March. In May 2026, the two most recent tax years are 2024–25 and 2023–24.
Income thresholds include
- Salary and wages (before PAYE)
- Self-employment income
- Rental income
- Interest income
- Most other taxable income
PIE fund returns themselves are not included in the threshold calculation.
How to Work Out Your PIR
Step 1: Find your total taxable income for the 2023–24 tax year (1 April 2023 – 31 March 2024).
Step 2: Find your total taxable income for the 2024–25 tax year (1 April 2024 – 31 March 2025).
Step 3: Apply the table:
- If either year was $14,000 or under → 10.5%
- If either year was $48,000 or under (but not qualifying for 10.5%) → 17.5%
- If both years were over $48,000 → 28%
Example
Sarah earned $62,000 in 2023–24 and $71,000 in 2024–25. Both years exceed $48,000, so her PIR is 28%.
Tom earned $45,000 in 2023–24 and $55,000 in 2024–25. His 2023–24 income was under $48,000, so his PIR is 17.5% — even though his most recent year was over $48,000.
What Happens If You Set the Wrong PIR?
If you set your PIR too low
The PIE fund withholds less tax than you owe. At the end of the tax year, IRD assesses the shortfall and you must pay the difference. This isn’t a penalty — it’s just the correct tax — but it can come as a surprise.
If you set your PIR too high
The PIE fund over-withholds tax. The excess is credited against your income tax assessment. You effectively get a refund through your tax return. For this reason, if you’re unsure, it’s always safer to set 28% and let IRD refund any overpayment.
Why Your PIR Rate Matters More Than You Think
For a $100,000 portfolio earning 8% per year, the difference between 17.5% and 28% PIR on investment returns is roughly $840 per year. Over 20 years with compounding, that’s a significant sum.
For higher earners whose marginal income tax rate is 33% or 39%, PIE funds at 28% already represent a meaningful tax saving — but only if you’re using the correct PIR rather than accidentally overpaying.
How to Update Your PIR Rate
You should review your PIR each year in April when the new tax year begins.
On Sharesies
Settings → Tax → Prescribed investor rate → Select your rate
On InvestNow
My Profile → Tax Details → Prescribed Investor Rate
On Kernel
Account → Tax Settings → PIR Rate
On KiwiSaver providers
Contact your provider directly or update via their online portal. Some providers (e.g. Simplicity, Milford) let you update online.
PIR Rate and KiwiSaver
Your KiwiSaver is almost always a PIE fund, meaning it’s also subject to your PIR. Your KiwiSaver provider will ask for your PIR when you join. If your income has changed significantly, it’s worth checking your PIR on your KiwiSaver account too.
IRD also maintains a record of your PIR. If you don’t supply one to a provider, they’ll apply the default rate of 28%.
Frequently Asked Questions
Do I need to tell IRD my PIR? No — you tell your fund providers, not IRD directly. IRD receives the information from providers and reconciles at tax time.
My income varies a lot year to year — which year counts? The lower of your two most recent years. If either year was below $48,000, you can use 17.5%. If either year was below $14,000, you can use 10.5%.
I’m self-employed with variable income. How do I handle this? Use the actual taxable income from your IR3 (individual income tax return) for each year. If you had a low-income year, you may qualify for a lower PIR even if your current year is high.
Does PIR apply to interest from bank accounts? No. Standard bank savings accounts and term deposits are not PIE funds. Interest earned is added to your taxable income and taxed at your marginal rate. PIR only applies to PIE funds.
What if I’m a non-resident? Non-residents have different tax rates. Contact your provider or IRD for guidance.
Summary
| Situation | Your PIR |
|---|---|
| Both years income > $48,000 | 28% |
| At least one year income ≤ $48,000 | 17.5% |
| At least one year income ≤ $14,000 | 10.5% |
| Unsure / new investor | 28% (safe default) |
Getting your PIR right is a five-minute task that can save hundreds of dollars annually. Review it each April.
Next Steps
- FIF Tax NZ — Foreign Investment Fund Rules Explained — The other key tax rule for NZ investors
- Understanding Investment Fees NZ — How fees compound against returns
- Best Investing Platform NZ 2026 — Choose a platform that matches your needs
- Back to Getting Started