ROI Calculator

ROI (Return on Investment) measures the net gain relative to your initial investment. For capital gains, ROI is tax-free — your full return is yours. For dividend income, tax is deducted each year at your marginal rate before reinvesting, on the assumption the dividend carries no imputation credit. For PIE funds, tax is capped at 28%. The calculator shows gross value (before tax), tax paid, net value, and both total and annualised ROI percentages for your selected treatment, and charts all three side by side.

New Zealand has no general capital gains tax. Gains from long-term investments held on capital account are generally tax-free, unless the bright-line test applies (residential property sold within 2 years), you are a dealer or trader, or the IRD determines you purchased with the intention of resale. Most long-term share and managed fund investors outside property fall outside these rules and do not pay tax on capital gains.

An unimputed dividend is taxed at your full marginal rate — up to 39% for top earners. PIE (Portfolio Investment Entity) income is taxed at your Prescribed Investor Rate (PIR), which is capped at 28%. On that unimputed basis a 39% earner pays 11 percentage points less tax on every dollar of PIE income, and the gap compounds over long periods; at a marginal rate of 17.5% or lower, PIE offers no advantage. Imputation narrows the gap sharply and the calculator above does not model it on either side: a fully imputed NZ dividend carries a credit of up to 28/72 of the cash paid, so a 33% investor bears about 7% rather than 33%, and a multi-rate PIE attributes its own imputation credits to investors too.

Capital gains (tax-free) always gives the best return, provided the investment qualifies — which most long-term non-property investments do. Between dividend income and PIE, on the unimputed basis the calculator uses: PIE wins for anyone on a 30% or higher marginal rate because the 28% PIR cap reduces annual tax drag, and at 17.5% or below the two are equal. Imputation credits, which neither path models, cut the tax on a fully imputed NZ dividend well below the PIR cap, so check a specific holding rather than reading the chart as a verdict on NZ shares. The chart on this page lets you compare all three at your chosen investment amount, return rate, and period.

Annualised ROI is the compound annual growth rate (CAGR) of your net returns. It's calculated as: (Net Value / Initial Investment)^(1 / Years) - 1. This normalises the return to a per-year figure, making it easy to compare investments of different holding periods. For example, a 100% total ROI over 10 years equals a 7.2% annualised ROI.

Yes — longer holding periods amplify the tax gap. A 1% annual tax-rate difference might be barely noticeable over 2–3 years but compounds to a large difference over 20–30 years. The calculator's comparison chart shows this clearly: the net-value bars diverge more over longer periods. For capital gains, longer holding periods also strengthen the 'capital account' argument against dealer/intention-test classification.