Guide
Prescribed investor rate: what it is and how to check yours
Your prescribed investor rate — your PIR — is the tax rate your KiwiSaver fund pays on the returns it earns for you. It is one of three rates: 10.5%, 17.5% or 28%. Most people never tell their provider what theirs is, which means they are being taxed at the highest one. Here is how the rate is worked out, how to find yours, and how to fix it in a few minutes.
Last checked October 2026
What a prescribed investor rate is
Most KiwiSaver funds are structured as Portfolio Investment Entities, or PIEs. Instead of you paying tax on the fund's returns at your own income tax rate, the fund pays tax on your share of its earnings at a special rate set for you: your prescribed investor rate.
There are only three PIRs — 10.5%, 17.5% and 28% — and the highest one is lower than the 33% and 39% income tax rates that apply to salaries. That is the advantage of the PIE structure: investment returns are taxed at a cap, not at your marginal rate.
The same rate applies to other PIE investments you hold, such as managed funds and some share funds, so it is one setting worth getting right across everything you own.
The three rates and the two tests
Which rate you qualify for depends on your income. Each year there are two tests, and you only get a rate if you meet both of them:
- Taxable income is your salary or wages, self-employed profit, and income such as interest and dividends.
- PIE income is the income your KiwiSaver fund and any other PIE funds are treated as having attributed to you during the year. Your provider reports it on your annual tax certificate.
- If you have no other PIE investments, your PIE income is zero and only the first test matters.
| Your PIR | Taxable income test | Taxable income plus PIE income test |
|---|---|---|
| 10.5% | $15,600 or less | $22,500 or less |
| 17.5% | $53,500 or less | $78,100 or less |
| 28% | Everyone else | Everyone else |
How your rate is worked out: the last two years, not this one
Your PIR for the current tax year comes from your income in the two tax years before it, and you use the lower of the two rates. That is worth knowing, because it means a single quiet year — study, parental leave, a gap between jobs, a business that had a bad run — can hold your rate down.
For the tax year ending 31 March 2027, for example, you look at the years ending 31 March 2025 and 31 March 2026.
Say your first year was $26,000 in wages with $300 of PIE income: that clears both tests for 17.5%. Your second year was $14,000 while you were on parental leave, with $250 of PIE income: that clears both tests for 10.5%. You use the lower rate, so your PIR is 10.5%.
The flip side is the lag. A pay rise this year does not lift your rate until the year after next, and a drop in income does not cut it any sooner either. If your income has moved, do not assume the rate you are on has already followed.
How to find the rate you are on
Your provider holds the rate you gave them, and it is usually visible in their app or online account, or on your annual tax certificate. If you cannot find it, ask them directly — they can tell you in one message.
If you never gave your provider a rate, you are on the default of 28%. That is the single most common situation, and for most people it is the wrong one.
To work out what you should be on, use Inland Revenue's tool or our checker, which asks the same two questions for each of the last two years.
Inland Revenue — find your prescribed investor rateOur PIR checker
How to change it
You change your PIR with your provider or fund manager, not with Inland Revenue. Most providers let you update it in their app or online account in a couple of minutes; some have a short form.
The change applies to earnings from that point on — it does not rewrite tax that has already been deducted. If you have been overtaxed for past years, Inland Revenue squares that up with you after the tax year ends, so the fix is about stopping it going forward.
If you hold more than one PIE — a KiwiSaver fund plus a managed fund, say — check the rate on each of them, because they are separate settings.
What being on the wrong rate costs
If your rate was too low, Inland Revenue bills you for the difference after the end of the tax year. It arrives as a surprise payment, and the tax was always going to be owed.
If your rate was too high, you get the overpayment back after the year ends — but the money has been sitting with Inland Revenue instead of invested in the meantime, and a fund that has been overtaxed every year compounds that shortfall into your balance.
The size of the problem depends on your balance and your return. On a $60,000 balance earning 6% a year, being on 28% when you should be on 17.5% costs about $380 of tax in the first year — and holding that mistake for a decade leaves roughly $5,700 less in your account. If the correct rate was 10.5%, the ten-year gap is closer to $9,600.
When to check again
Because the rate is set from past income and updates with a two-year lag, the moments worth re-checking are the ones where your income changed some time ago:
- You came off parental leave, returned to study, or had a year between jobs.
- You took on a second job, a big pay rise, or went self-employed.
- You retired, or cut your hours.
- You started earning meaningful income from other investments, so your PIE income has grown.
- You moved to or from New Zealand, or your tax residency changed — different rules apply if you are not a New Zealand tax resident.
Quick PIR checklist
- Ask your provider what PIR you are currently on, rather than assuming.
- Work out the rate for each of the last two tax years and use the lower one.
- Update the rate with your provider if it is wrong — Inland Revenue cannot change it for you.
- Check the rate on every PIE fund you hold, not just KiwiSaver.
- Re-check whenever your income has shifted for a reason that happened more than a year ago.