KiwiSaver PIE Tax End-of-Year Square-Up in NZ (2026): Why IRD Sends a Bill or Refund After Filing

IRD now squares up your KiwiSaver PIE tax at year-end against your real income. This explains why a bill or refund appears in your assessment, how it is calculated, and how to set your PIR so it stops happening.

Plenty of people are surprised to find a small KiwiSaver-related tax line in their end-of-year IRD assessment — sometimes a bill, sometimes a refund. They have not done anything wrong, and in most cases they have not changed anything. What has happened is that Inland Revenue has checked the Prescribed Investor Rate (PIR) used on their KiwiSaver fund against their actual income for the year, and adjusted the difference.

This guide explains what that year-end square-up is, why your KiwiSaver PIE income now feeds into your assessment, how the bill or refund is calculated, and how to set your PIR so the surprise does not return next year.

TL;DR: Since 1 April 2020, IRD automatically checks at year-end whether your KiwiSaver fund used the correct PIR. If you under-paid, the shortfall is added to your tax as a PIE debt (a bill); if you over-paid, it becomes a PIE credit that reduces tax owed and is otherwise refunded ¹². Individual PIRs are 10.5%, 17.5% or 28%, and the fix is to set the right one with your provider ³.

What is the KiwiSaver PIE tax year-end square-up?

Your KiwiSaver fund is a Portfolio Investment Entity (PIE). The income it earns is taxed at your PIR rather than at your ordinary income tax rate. During the year your provider deducts PIE tax at whatever rate it holds for you, and pays it to IRD on your behalf.

Since 1 April 2020, Inland Revenue runs an automatic end-of-year PIE calculation for individuals. After the tax year closes, it works out the PIR you should have been on for the full year and compares it with the rate your provider actually used ¹. If the two match, nothing happens. If they do not, the difference is squared up through your income tax assessment.

The PIR (Prescribed Investor Rate — the tax rate applied to your PIE income) comes in three levels for individuals: 10.5%, 17.5% and 28% ³. The square-up exists because the rate your provider used at the start of the year can turn out to be wrong by the end of it — incomes rise and fall, and the rate set last year may no longer fit.

Why does IRD now include my KiwiSaver PIE income in my assessment?

Before this rule, PIE tax was simply a final tax — once it was deducted, that was the end of it, whether the rate was too high or too low. The downside was that people on the wrong rate either over-paid with no way to get it back, or under-paid with no correction.

Since 1 April 2020, IRD instead checks the rate for you automatically as part of the year-end process ¹. Provided your PIR is correct, PIE tax is still effectively a final tax, so for most investors the PIE income is pre-populated in myIR and you do not need to return it separately. It only produces an adjustment — a bill or a refund — if the rate used during the year did not match your correct rate ¹⁰.

So the appearance of a KiwiSaver line in your assessment is not a sign of a mistake on your part. It is the system doing the check it is designed to do.

How do I know if my PIR was wrong during the year?

Your correct PIR for the tax year ending 31 March 2026 is based on your income for each of the last two tax years, and you use the lower of the two years' rates ⁵. That detail matters: a recent drop in income — through study, parental leave, part-time hours or retirement — can lower your correct rate even if your current income looks higher.

The income thresholds that set each rate (in force from 1 April 2025, for the year ending 31 March 2026) are below ⁴.

Thresholds effective 1 April 2025; source: Inland Revenue ⁴.

A common reason a rate ends up wrong is the default. If you did not give your provider a PIR, or your IRD number is not on file, the default 28% rate must be applied regardless of what you actually qualify for ⁶. That is the right rate for many people but too high for others, which is where over-payments come from. For a fuller walk-through, see our guides on how PIE tax works in KiwiSaver and what PIR you should be on.

Will I get a refund or a bill, and how is it calculated?

At year-end IRD works out the tax due at your correct PIR for the full year and compares it with what was actually deducted ². The outcome is one of two things.

• If too much PIE tax was paid, you get a PIE credit. It is first used to reduce any income tax you owe, and any remainder is refunded to you ².
• If too little was paid, you get a PIE debt — added to the income tax you have to pay ².

Figure — How a year-end PIE square-up produces a bill or refund

A simple flow of how the rate you used turns into an assessment outcome:

Source: IRD PIE end-of-year calculation ².

The timing is worth knowing. After the tax year ends on 31 March, automatic income tax assessments are usually processed from late May onward, and most people hear from IRD between the last weekend in May and the end of July ⁷.

What if I was on too low a PIR all year?

This is the case that produces a bill. If your provider deducted at, say, 17.5% but your income meant you should have been on 28%, the shortfall is squared up as a PIE debt and added to your end-of-year tax ².

There is one piece of relief built into the rules. On the under-paid side, the square-up caps your PIE income at the top PIR of 28% rather than charging it at your full marginal income tax rate, which can be as high as 39% ³. So even where a too-low rate was used, the additional tax is calculated at 28% on the PIE income, not 39%.

A bill that includes PIE debt follows the normal assessment timeline. It is generally due on 7 February of the following year, or 7 April if you have a tax agent with an extension of time ⁸. One thing to watch: if your residual income tax (including any PIE debt) is more than $5,000, you may be required to pay provisional tax for the following year ⁹. For most KiwiSaver members the PIE adjustment alone is modest, but it is worth being aware of where the threshold sits.

What if I was on too high a PIR (do I get money back)?

Yes. If the rate used during the year was higher than your correct rate, the over-paid amount becomes a PIE credit. IRD applies it against any income tax you owe first, and refunds whatever is left ².

For most people this lands as part of the same automatic assessment between late May and the end of July ⁷. There is no separate claim to lodge for NZ-resident individuals — the credit is worked out and applied for you. If you think a too-high rate has been used for more than one year, our guide on a PIR that is too high and how to get over-paid tax back walks through what is recoverable.

The important limit is that the square-up only corrects the year just gone. It does not change the rate your provider will use next year, so a refund this year does not stop the same over-payment recurring unless you also update the rate.

How do I fix my PIR so it doesn't happen again?

The square-up handles the year that has passed, but your provider keeps deducting at whatever PIR it holds until you change it. Fixing it forward is a short job.

1. Work out your correct band from the table above, using the lower of the two rates you qualify for across the last two income years ⁴⁵.

2. Update your PIR with your KiwiSaver provider — through the provider's app or online portal — whether that is Booster, Milford, Simplicity, Fisher Funds, Generate, Kernel, or a bank-run scheme. The rate is set with the provider, not IRD.

3. Make sure your IRD number is on file with the provider. Without it, the default 28% applies regardless of what you qualify for ⁶.

4. Check joint or family investments separately, as the rate that applies to those can differ.

5. Diarise an annual check. Your correct rate moves with your income, so a quick look once a year keeps it right.

If you would rather not work through the bands yourself, our KiwiSaver Health Check steps through it, or a KiwiSaver review can read the rate off your statements with you.

When should I get an adviser to check my PIR and fund?

For many people, confirming a PIR is a five-minute job they can do themselves with the table above. It is worth a second look in a few situations: if your income has moved between bands recently, if you hold KiwiSaver alongside other PIE investments, if you have had a bill or refund you did not expect, or if you are unsure which of the last two years' rates applies to you.

A review is also a sensible point to check that the rate and the fund still fit together. The right PIR makes sure you are taxed correctly; the right fund choice is a separate question about risk and time horizon. Returns on any fund are not guaranteed and can go down as well as up, so the fund decision deserves its own conversation rather than being bundled in with the tax fix.

Frequently asked questions

Why did I get a tax bill because of my KiwiSaver? Because your provider deducted PIE tax at a rate that was lower than your correct PIR for the year. At year-end IRD works out the right rate for the full year and adds the shortfall as a PIE debt to your income tax ². The extra is calculated at no more than the top PIR of 28%, not your full marginal rate ³.

Do I have to do anything to get the refund if my PIR was too high? Generally no, for NZ-resident individuals. The over-paid amount becomes a PIE credit, which reduces any tax you owe and is otherwise refunded as part of your automatic year-end assessment ². There is no separate claim to file.

When does the square-up happen and when will I hear? After the tax year ends on 31 March, assessments are usually processed from late May, and most people hear from IRD between the last weekend in May and the end of July ⁷.

When is a PIE tax bill due? A bill from your assessment is generally due on 7 February of the following year, or 7 April if you have a tax agent with an extension of time ⁸. If your residual income tax, including any PIE debt, is more than $5,000, you may also have to pay provisional tax for the next year ⁹.

Will fixing my PIR sort out the bill, or only stop it next time? The year-end square-up handles the year just gone automatically ². But your provider keeps deducting at the old rate until you change it, so you still need to update your PIR to stop the same thing happening again ⁶.

Is my PIR set with IRD or with my KiwiSaver provider? With your provider. IRD works out your correct rate at year-end, but the rate actually used during the year is the one your provider holds, so that is where you update it ³⁶.

General information, not personalised financial advice. Seek advice tailored to your situation before acting. Craig Smith Business Services Ltd (FSP712931), trading as Smiths Financial, holds a Class 2 licence issued by the Financial Markets Authority and is a member of the Financial Dispute Resolution Service (FDRS). Written by Henry Smith, Financial Adviser; reviewed by Craig Smith, Principal Adviser. Last reviewed 30 March 2026.