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. 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.

Dividend income 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%. This means a 39% earner pays 11 percentage points less tax on every dollar of PIE income. Over long periods, this tax gap compounds significantly. However, if your marginal rate is 17.5% or lower, PIE offers no tax advantage.

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: PIE wins for anyone on a 30% or higher marginal rate because the 28% PIR cap reduces annual tax drag. At 17.5% or below, PIE and direct investment are equal. 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.