PIE Tax Calculator

A PIE (Portfolio Investment Entity) is a type of investment fund that pays tax on investment income on behalf of its investors at their Prescribed Investor Rate (PIR) rather than at their personal income tax rate. KiwiSaver funds are PIEs, as are many managed funds and unit trusts offered by NZ fund managers. The key tax advantage is that PIE tax is capped at 28%, even if the investor's top marginal income tax rate is 33% or 39%. PIE income and tax are handled by the fund, so investors do not include PIE income in their personal tax return — it is a final tax. This structure was introduced in New Zealand in 2007 to encourage long-term saving by making investment funds tax-efficient for most New Zealanders. Source: IRD ird.govt.nz/income-tax/income-tax-for-businesses-and-organisations/types-of-business-income/pie.

Your Prescribed Investor Rate (PIR) is the tax rate applied to your PIE investment income and is based on your taxable income in the two prior income years. For the 2026-27 tax year, the PIR bands are: 10.5% if your income in each of the two prior years was $0-14,000; 17.5% if your income was $14,001-48,000; and 28% if your income was above $48,000 in either of the two prior years. If you do not notify your PIE fund of your PIR, the fund defaults to 28%. It is your responsibility to update your PIR with your fund if your income changes between tax years. Choosing tō low a PIR means the fund underpays tax on your behalf and IRD may require you to pay the shortfall; choosing tō high a PIR means overpayment with no refund available. Source: IRD ird.govt.nz/income-tax/income-tax-for-businesses-and-organisations/types-of-business-income/pie.

The primary tax advantage of PIE funds in New Zealand is the cap on the tax rate at 28%, regardless of your personal income tax rate. For investors on the 33% marginal tax rate (income $70,001-$180,000), investing through a PIE saves 5 percentage points on investment income tax. For investors on the 39% top rate (income above $180,000), the saving is 11 percentage points. On a $100,000 investment generating 7% or $7,000 in income, an investor on the 39% rate would pay $2,730 tax through a PIE versus $3,870 at their marginal rate, saving $1,140 per year. It is important to use the correct PIR: if you use a PIR lower than your actual rate, the tax underpayment becomes a shortfall debt with no corresponding refund for overpayments. Source: IRD ird.govt.nz/income-tax/income-tax-for-businesses-and-organisations/types-of-business-income/pie.

No. In New Zealand, PIE tax is a final tax, which means you do not include PIE income or PIE tax paid in your personal income tax return (IR3). The PIE fund calculates and pays the tax on your behalf using your PIR, and IRD treats this as fully satisfying your tax obligations on that income. This is one of the administrative advantages of PIE-structured investments such as KiwiSaver. However, you must ensure your PIR is correct and update it with your fund at the start of each new tax year if your income has changed significantly. If your PIR is set tō low, you may receive a tax shortfall notice from IRD. If tō high, unlike regular income tax where IRD issues refunds, PIE tax overpayments are generally not refundable. Source: IRD ird.govt.nz/income-tax/income-tax-for-businesses-and-organisations/types-of-business-income/pie.