How your KiwiSaver income is taxed
Your KiwiSaver provider invests your contributions so they earn money for you.
You pay tax on the money your investment earns, but you do not pay tax on any money you withdraw from your KiwiSaver account.
To use the right tax rate you need to know what kind of KiwiSaver scheme you're in. These can be either:
- widely-held superannuation schemes
- portfolio investment entities (PIEs).
Your provider's product disclosure statement tells you which type of scheme you're in. Your myIR account has the name and contact details of your provider.
If the KiwiSaver scheme you belong to is a widely-held superannuation fund, your investment earnings are taxed at 28%. Alternatively, if the KiwiSaver scheme you belong to is a Portfolio Investment Entity (PIE), your investment earnings are taxed at your Prescribed Investor Rate - either 28%, 17.5%, or 10.5% depending on your individual circumstances.
Portfolio investment entity KiwiSaver schemes
All the KiwiSaver default schemes are portfolio investment entities (PIEs).
A PIE invests in different types of funds. Your scheme provider taxes your investment earnings using the prescribed investor rate (PIR) you choose.
Prescribed investor rates
A prescribed investor rate is a tax rate. It's based on your total taxable income in the last two income years (1 April to 31 March), for example income from salary, wages and any other income.
Calculate your PIR
If you're enrolling into KiwiSaver for the first time we may let you and your scheme provider know what we think your prescribed investor rate should be. We base this on the income information we have in your myIR account.
Using myIR to calculate your PIR
You can work out your prescribed investor rate (PIR) in myIR. There's no need to add income details if you've already added them to your myIR account.
If you need to you can enter any additional income.
Use our online calculator to find your PIR
You can also use our online calculator to find your PIR. You'll need your income details for this.
Find my prescribed investor rate
Using your prescribed investor rate
You'll need to give your provider the prescribed investor rate that applies to your situation. Your provider will ask you to check every year that you’re on the right PIR. Because your PIR is based on your income in the last 2 years, check your PIR rate if your financial situation changes in the future.