What PIR Should I Be On? KiwiSaver Tax Rates (NZ, 2026)

Your PIR (10.5%, 17.5% or 28%) decides how much tax your KiwiSaver pays. Here are the 2025/26 thresholds, the two-year rule, and what the IRD square-up costs if you get it wrong.

TL;DR: Your KiwiSaver PIR is 10.5%, 17.5% or 28%, set by your taxable income in the last two tax years, and you use the lower of the two. For 2025/26 the brackets are taxable income up to $15,600, $53,500 and $53,501+. Set it too high and you overpay tax on every dollar your fund earns.

PIR stands for Prescribed Investor Rate, and it is a question you can answer in about two minutes. Many people tick a box when they join KiwiSaver and never check it again. Some are paying more tax than they need to. Others are paying too little and will get a bill from Inland Revenue.

This guide breaks down the three rates, the 2025/26 thresholds that changed on 1 April 2025, the two-year rule that trips people up, and what the IRD square-up actually costs when your PIR is wrong.

What is a PIR and why does it decide your KiwiSaver tax?

Your KiwiSaver fund is a Portfolio Investment Entity, or PIE. Instead of taxing the fund's returns at company rates, a PIE taxes the income attributed to you at your personal PIR. That tax is deducted inside the fund — you never file or pay it separately, and for most people PIE income is a final tax.

Because the rate is applied to the investment income your balance earns each year, a wrong PIR does not show up as a line on a payslip or a letter in the post. It just shaves a little off your returns, every year, silently. On a growing six-figure balance, "a little" compounds into real money.

The good news: there are only three rates to choose from, and the rules for which one applies to you are fixed and public.

What are the three PIR rates for 2025/26?

There are exactly three KiwiSaver PIRs — 10.5%, 17.5% and 28% — and which one applies to you depends on two income figures from each of your last two tax years: your taxable income (salary, wages, business income) and your taxable income plus PIE income (that taxable income with your attributed PIE earnings added on top) ¹⁰.

The 1 April 2025 thresholds

From 1 April 2025 the income brackets that decide your PIR moved up to align with the personal income tax band changes ³. The table below is the rate finder for the 2025/26 tax year — read each row as the income ceiling for that rate.

Source: IRD PIR thresholds effective 1 April 2025 ¹².

To read it: you qualify for 10.5% only if your taxable income was $15,600 or less and your taxable income plus PIE income was $53,500 or less ¹. You qualify for 17.5% if your taxable income was $53,500 or less and your taxable income plus PIE income was $78,100 or less, but you do not meet the 10.5% test ¹. Everyone else — taxable income of $53,501 or more, or taxable income plus PIE income of $78,101 or more in both of the last two years — is on 28% ².

One detail worth knowing: the old brackets were $14,000 / $48,000 / $70,000, and they rose to $15,600 / $53,500 / $78,100 ³. If your income sits between the old and new numbers, you may now qualify for a lower PIR than you did before 1 April 2025 — and your provider will not have changed it for you automatically.

How do I work out my correct PIR?

This is where most people go wrong. Your PIR for the current tax year (ending 31 March 2026) is not based on what you earn right now. It is based on your income in each of the last two completed tax years — the years ended 31 March 2024 and 31 March 2025 ⁴.

The two-year rule — pick the lower

You run the rate test against both of those years. If the two years point to different rates, you use the lower PIR ⁴. That is the part that catches people out, and it almost always works in your favour.

Worked example: the year that drops your rate

Scenario: Mere went back to study for the year ended 31 March 2024 and earned $22,000. The following year, ended 31 March 2025, she returned to full-time work on $61,000. Here is how the two-year rule resolves her rate.

Even though Mere now earns $61,000, the two-year rule lets her sit on 17.5% for the 2025/26 year because of her lower study-year income ⁴. If she had defaulted herself to 28% on the assumption that "I earn over $53,500 so I must be on the top rate", she would be over-taxing her KiwiSaver on every dollar it earns this year.

This commonly applies to people returning from parental leave, a redundancy gap, a sabbatical, or a year of study — the lower year can entitle them to a lower PIR.

What happens if my PIR is too high or too low?

PIE income is normally a final tax, but Inland Revenue now squares it up at year end against your correct PIR. The outcome depends on which way you got it wrong.

The IRD square-up

If your PIR is too low, you have underpaid. You must pay the tax shortfall, possibly with IRD penalties and interest, and you may need to complete an income tax assessment ⁵. At year end IRD calculates the outstanding PIE tax liability and adds it to your tax to pay ⁶. That is the bill nobody enjoys.

If your PIR is too high, you have overpaid. IRD issues a PIE tax credit, which is first used to reduce any other tax you owe; any remaining overpaid PIE tax is then refunded to you ⁶. So an over-high PIR is no longer money lost forever — but you are still handing Inland Revenue an interest-free loan all year, and the credit only catches up if IRD's annual wash-up runs cleanly for you.

The table below summarises both outcomes and what IRD does in each case.

That last row matters. If you never told your provider a PIR — or you joined without an IRD number — you are sitting on the default 28% ², whether or not you should be.

Why does being on the wrong PIR quietly cost you money?

The trap is that 28% is also the cap a PIE can charge, and it is set deliberately below the top personal tax rate. Sorted points out that 28% inside a PIE is the equivalent of a 33% top marginal rate outside one — which is exactly why a PIE is tax-efficient for high earners, and exactly why an incorrectly high PIR quietly overtaxes lower earners ¹¹.

Put plainly: if you should be on 17.5% but you are sitting on 28%, every dollar your fund attributes to you is taxed 10.5 percentage points harder than it needs to be. On a $90,000 balance returning, say, $5,400 in a year, that is the difference between roughly $945 and $1,512 in PIE tax — about $567 of avoidable tax in a single year, before it compounds across the decades you hold KiwiSaver.

It helps to see the tax setting next to the fee setting. A low-fee option such as the Simplicity KiwiSaver Balanced Fund charges an annual fund fee of 0.24% ¹² — so on that same $90,000 balance the fund fee is around $216 a year, while an over-high 28% PIR could cost you $567. A wrong PIR can outweigh the fee you pay, and it is the cheaper of the two to fix.

Sorted is blunt about it: if your income is sometimes or always below the relevant threshold, you may be paying too much tax, and you fix it by contacting your provider ¹⁰. It is one of the cheapest wins in personal finance — and it pairs neatly with the other KiwiSaver settings worth checking. With the government contribution now 25 cents per $1 (max $260.72, halved from 50 cents and $521.43 at Budget 2025) ⁸ — claimed when you put in at least $1,042.86 of your own money in the KiwiSaver year ⁷ — and the member contribution rate stepping from 3% to 3.5% from 1 April 2026 and 4% from 2028 ⁹, every dollar of leakage matters more than it used to. A quick KiwiSaver review checks the lot in one sitting.

How do I check and change my PIR with my provider?

You do not change your PIR through IRD — you tell your KiwiSaver provider, and they apply it. Most can do it in the app or online banking in under five minutes. The table below shows where a few common providers let you update it.

If you are not sure which figures to use, run your last two years' taxable income through your provider's PIR checker, or use our KiwiSaver health check to confirm the rate before you change anything.

Your KiwiSaver tax checklist

01. Find your last two years' income. Pull the taxable income for the years ended 31 March 2024 and 31 March 2025 — your IRD income summary or payslips will have it ⁴.

02. Run both years against the table. Apply the 2025/26 thresholds to each year separately. Remember the two figures: taxable income, and taxable income plus PIE income ¹².

03. Pick the lower rate. If the two years disagree, you use the lower PIR for 2025/26 ⁴. Do not default yourself to 28%.

04. Tell your provider, then check the square-up. Update your PIR in the app or online banking. If you have been too high, IRD will credit and refund the overpayment; if too low, expect a wash-up bill ⁵⁶.

Why small settings matter

A PIR is one box, ticked once, on a form you may have signed years ago. But an incorrect rate can cost a balanced or growth-fund member hundreds of dollars a year in avoidable tax, and most people never notice it. The fix takes about two minutes: check your last two years' income and supply the correct rate to your provider.

Frequently asked questions

What are the three KiwiSaver PIRs for 2026? They are 10.5%, 17.5% and 28%. For the 2025/26 year you qualify for 10.5% if taxable income was $15,600 or less and taxable income plus PIE income was $53,500 or less; 17.5% up to $53,500 and $78,100; and 28% above that ¹².

Which two years does my PIR look at? For the current tax year ending 31 March 2026, your PIR is based on your income in the years ended 31 March 2024 and 31 March 2025. If the two years point to different rates, you use the lower one ⁴.

What happens if my PIR is too high? You overpay PIE tax during the year. At year end IRD issues a PIE tax credit, applies it to any other tax you owe, and refunds any balance. You are not permanently out of pocket, but you have lent IRD money interest-free all year ⁶.

What happens if my PIR is too low? You underpay. IRD calculates the outstanding PIE tax and adds it to your tax to pay, potentially with penalties and interest, and you may need to file an income tax assessment ⁵⁶.

What is the default PIR if I do not give one? 28% — the highest rate. It is applied automatically if you do not supply a PIR or an IRD number, which is why low earners who never set a rate often overpay ².

Did the PIR thresholds change recently? Yes. From 1 April 2025 the brackets rose from $14,000 / $48,000 / $70,000 to $15,600 / $53,500 / $78,100, so some people now qualify for a lower PIR than before ³.

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 16 June 2026.