Setting your PIR, and what getting it wrong costs
Your prescribed investor rate is the rate your KiwiSaver and managed funds are taxed at. Nobody sets it for you, and both directions of error cost something.
On this page
- Who sets it
- You, not your provider
- Based on
- The last two income years
- Rates for an individual
- 10.5%, 17.5% or 28%Inland Revenue, New Zealand resident individuals' PIE income, read 18 September 2026
- No rate given
- 28%Inland Revenue, New Zealand resident individuals' PIE income, read 18 September 2026
- Too low
- You owe the difference
- Too high
- Credit or refund, with loss exception
It is your job, and the default is not neutral
A portfolio investment entity, which is what almost every KiwiSaver fund is, taxes your share of its income at the rate you tell it. If you never tell it, it applies the default rate, 28%. Providers cannot work yours out for you because it depends on income they cannot see. Inland Revenue, New Zealand resident PIE income (opens in a new tab).
It looks backwards, not forwards
The rate is worked out from your income in the last two income years, using whichever of those two years gives the lower result. That backwards look is why a pay rise does not change your rate immediately, and why a drop in income can leave you on too high a rate for a while. Inland Revenue, New Zealand resident PIE income (opens in a new tab). Inland Revenue, work out my prescribed investor rate (opens in a new tab).
The two errors are not symmetrical
If too little tax has been paid on PIE income, Inland Revenue adds a PIE debt to the income tax assessment. Inland Revenue, end-of-year PIE calculation (opens in a new tab).
If too much tax has been paid on PIE income, a PIE credit reduces income tax owed and any remaining credit is refunded. A fund loss can reverse the result: an excessive PIR can produce too much loss relief and leave a debt. Inland Revenue, end-of-year PIE calculation (opens in a new tab).
Where to actually check it
The resident-individual PIR rates are 10.5%, 17.5% and 28%; if no PIR is supplied, the default is 28%. The rate depends on income in the last two tax years. Inland Revenue's Work out my prescribed investor rate questionnaire applies the income tests rather than using the current salary alone. Inland Revenue, New Zealand resident PIE income (opens in a new tab). Inland Revenue, work out my prescribed investor rate (opens in a new tab).
The lookback shifts as a new tax year starts. Income changes can therefore affect the applicable PIR at a different time from the change itself. The rate applied by the fund is compared with the correct full-year rate in Inland Revenue's separate end-of-year PIE calculation. Inland Revenue, work out my prescribed investor rate (opens in a new tab). Inland Revenue, end-of-year PIE calculation (opens in a new tab).