PIR

Your Prescribed Investor Rate (PIR) is the tax rate applied to income earned from Portfolio Investment Entities (PIEs), including KiwiSaver funds, PIE term deposits, and managed funds. The three PIR rates are 10.5%, 17.5%, and 28%.

Your correct PIR depends on two figures for each of the last two income years: your taxable income excluding PIE income, and your taxable income including PIE income (you use whichever of the two years gives the lower rate). If your taxable income excluding PIE was $14,000 or less AND your income including PIE was $48,000 or less, your PIR is 10.5%. If your taxable income excluding PIE was $48,000 or less AND your income including PIE was $70,000 or less, your PIR is 17.5%. Otherwise, your PIR is 28%. These PIR thresholds ($14,000/$48,000/$70,000) are set separately from the PAYE income tax brackets under the Income Tax Act 2007 s HM 60, and have been unchanged since 2010.

It's critical to use the correct PIR. If you use a rate that's too low, IRD will charge you the difference. If you use a rate that's too high, you cannot get a refund — the overpayment is lost. You should review your PIR each year, especially if your income has changed, and update it with your KiwiSaver or fund provider.