How to calculate your PIR in New Zealand

By GrowThenDraw Editorial Team · Updated September 5, 2026 · 9 min read · Editorial policy

Your prescribed investor rate is not simply your current marginal income-tax rate. For an ordinary New Zealand tax-resident individual, a multi-rate PIE uses a PIR of 10.5%, 17.5% or 28%, determined from income in the previous two income years.

The calculation has two traps: every band has both a taxable-income limit and a combined-income limit, and the lower rate supported by either prior year applies. This guide follows Inland Revenue's March 2026 IR861 rules and then explains what a wrong notified rate can change.

First confirm that the resident-individual table applies

This calculation is for a natural person who is a New Zealand tax resident and holds an investment in an ordinary multi-rate PIE. Many KiwiSaver schemes use the PIE structure, but the provider's product disclosure statement should confirm the scheme type.

Do not apply the same three-rate decision to a company, trust, superfund, charity, non-resident or notified foreign investor. Joint investors work out and provide their rates separately. New and transitional residents also have special worldwide-income and zero-rate-PIE rules that need individual review.

Use the two income years before the application year

For a PIR applied in the New Zealand income year ending 31 March 2027, use the years ended 31 March 2026 and 31 March 2025. Calculate a supported rate for each year separately, then take the lower of the two rates.

This is why entering only the latest salary can be wrong. A prior year affected by study, parental leave, reduced hours or time between jobs may support a lower PIR even when the most recent year does not.

Build two income totals for each year

The first amount is taxable income excluding PIE income or loss. It can include salary, wages, taxable interest, rental income and other amounts that belong in the income-tax calculation.

The second test uses taxable income plus net PIE income. Inland Revenue says a PIE loss may reduce PIE income but cannot exceed PIE income and cannot reduce taxable income. A net PIE loss therefore cannot turn $54,000 of taxable income into $53,000 for the PIR test.

Apply both thresholds for the 10.5% and 17.5% rates

Both limits for a rate must pass in the same year. Passing the $15,600 taxable-income test but exceeding $53,500 after PIE income does not qualify for 10.5%. Amounts exactly on a published limit still pass because the tests use 'or less'.

• 10.5% PIR: taxable income excluding PIE income or loss is no more than $15,600, and combined income is no more than $53,500.
• 17.5% PIR: taxable income excluding PIE income or loss is no more than $53,500, and combined income is no more than $78,100.
• 28% PIR: applies when neither lower-rate pair of tests passes.

Worked two-year example

Suppose the year ended 31 March 2026 has $60,000 of taxable income and $2,000 of net PIE income. Taxable income already exceeds the $53,500 middle-band limit, so that year supports 28%.

The year ended 31 March 2025 has $48,000 of taxable income and $1,500 of net PIE income. Combined income is $49,500. Both figures sit inside the 17.5% limits, so that year supports 17.5%. Because either previous year can support the lower rate, the PIR for the year ending 31 March 2027 is 17.5%.

Compare the calculated PIR with the rate already notified

If a PIE attributes $2,000 of income, tax at 17.5% is $350. Tax at a notified 28% rate is $560, a $210 difference. That multiplication is useful for scale, but the attributed income shown by the provider may differ from an estimate made during the year.

A rate set too low can contribute to tax payable, while too much PIE tax can be credited or refunded through the year-end assessment. Inland Revenue has been able to refund overpaid individual PIE tax since the 2021 tax year. The final result belongs to the complete Inland Revenue assessment, not a calculator screen.

Notify each provider and review the rate every year

Give the PIR and IRD number to each relevant PIE provider. Inland Revenue says investment income can be taxed at the default 28% rate when the required information is not provided.

Check the rate annually, especially after a substantial income change. The provider uses PIR on investment earnings; KiwiSaver withdrawals are not taxed merely because the scheme's investment earnings were taxed inside a PIE.

What the calculator deliberately does not decide

GrowThenDraw cannot see myIR, provider records, final attributed income or residency facts. It does not handle entity rates, foreign-investment PIEs, transitional-resident elections, provider corrections during the year, Working for Families adjustments or student-loan consequences.

Use the result to audit the arithmetic and prepare the right questions. Inland Revenue and the provider control the rate applied and the final assessment. This is educational information, not personalised tax, investment or financial advice.