Episode Details
Back to EpisodesYour Prescribed Investor Rate Can Save You Tax
Description
PIR is one of those tiny settings that can quietly shape your after-tax returns for years, and most people only notice it as three letters on a KiwiSaver statement. We bring Dave in for a plain-English Tax Chat to explain what PIR (prescribed investor rate) actually is, how it works inside PIE funds and unit trusts, and why it’s different from your normal income tax rate.
We unpack the part that surprises most listeners: for many KiwiSaver and PIE investments, the top PIR is capped at 28%, even if your personal tax rate is 33% or 39%. That can make KiwiSaver tax more efficient for some people using it as a retirement savings vehicle. We also talk through the real-world risk: if your circumstances change and your PIR doesn’t, you can end up paying the wrong amount. Overpaying can be especially painful because you may not be able to claim it back, while underpaying can still lead to a bill later.
You’ll get the key PIR bands (10.5%, 17.5%, 28%) and a practical checklist for staying up to date, including where to find your PIR in your provider’s app or portal and how MyIR can help if it’s not clear. If you’ve ever changed jobs, had time off to look after kids, reduced hours, or simply set your KiwiSaver up years ago and never looked again, this is the nudge to check.
Subscribe for more straight-talking money chats, share this with someone who has KiwiSaver, and leave a review if it helped, then go check your PIR today and tell us what you found.
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