KiwiSaver and PIR Rates: What You Need to Know for 2025
When it comes to KiwiSaver, your Prescribed Investor Rate (PIR) plays a big role in how much tax you pay on your investment earnings. From 1 April 2025, the PIR bands are changing. This makes it the perfect time to check your rate and make sure your KiwiSaver isn’t being over- or under-taxed.
You’re not alone if you've ever felt confused about what PIR means or how to work yours out. This guide explains PIR in simple terms so you can get it right and avoid paying more tax than you need to.
What Is PIR?
PIR stands for Prescribed Investor Rate. It’s the tax rate applied to your earnings from certain types of investment funds, including KiwiSaver. These funds are called PIEs, or Portfolio Investment Entities, and they’re taxed differently from your wages or salary.
Your PIR is based on your income, and the rate determines how much tax your KiwiSaver provider deducts from your investment returns. You choose the PIR and give it to your provider along with your IRD number. Remember, it’s your responsibility to keep it up to date.
New PIR Rates from 1 April 2025
The New Zealand Government has updated the PIR bands, effective 1 April 2025:
10.5% PIR: If your taxable income is $15,000 or less and, when combined with your PIE income, $53,500 or less.
17.5% PIR: If your taxable income is $53,500 or less and, when combined with your PIE income, $78,100 or less, and you don’t meet the criteria for the 10.5% rate.
28% PIR: Applies to everyone else not in the above two categories.
Choosing the correct PIR ensures your investment earnings are taxed at the right rate. If you use a rate that’s too low, you may owe tax later. If it’s too high, you can’t get a refund so it pays to get it right.
How to Work Out Your PIR
To work out your PIR, you’ll need to calculate your PIR Total Income for one of the last two tax years. This includes:
Your Total Taxable Income: This is all income from salary, wages, interest, dividends, and business income (excluding PIE income).
Your Total PIE Income: This is income earned from PIE-managed funds like KiwiSaver. Your provider will send you a statement each year showing this amount.
Add these together to get your PIR Total Income. Then, use the table above to check which rate applies.
It’s important to note that the IRD may inform you if your PIR needs updating, but it’s best to review it yourself at the end of each tax year (in March) to be sure.
Why Does PIR Matter?
Your KiwiSaver fund manager applies your PIR to your investment earnings automatically. But if your PIR is wrong:
If it’s too low, you may be required to pay extra tax to the IRD.
If it’s too high, you’ll have paid more tax than necessary, and you won’t get a refund.
Making sure your PIR is accurate helps you avoid both underpaying and overpaying.
A Quick Recap
PIR is your tax rate for KiwiSaver and PIE funds.
From April 2025, the new bands are 10.5%, 17.5%, and 28% based on your combined taxable and PIE income.
You must give your PIR to your fund provider and keep it updated.
Review your PIR every year to make sure you're not paying more tax than you need to.
Understanding and checking your PIR each year might seem like a small task, but it can make a meaningful difference in the long run. It ensures you keep more of your KiwiSaver returns where they belong - in your account!