Aon KiwiSaver Scheme is a Portfolio Investment Entity (PIE). This means the tax payable on the investment income related to your account is based on your Prescribed Investor Rate (PIR).
Your PIR could be different from your personal tax rate, so you will need to tell us what your PIR is.
How to work out your PIR
Working out your PIR is easy. Just follow these simple steps.
Basically, you need to know the amount of your taxable income and your PIE income in each of the last two tax years. A tax year is the period from 1 April in one year to 31 March the next year. For most people their income year will be the same period.
It is important that you put your PIR on your KiwiSaver application form. If you don’t tell us your PIR, we will tax your investments at the maximum rate of 28%. If we have your correct PIR, you won’t have to declare any investment earnings from the scheme on your annual tax return.
We answer your questions about KiwiSaver and tax
Is my Prescribed Investor Rate different to my personal tax rate?
Yes. A Prescribed Investor Rate is the tax rate used for your KiwiSaver account. It is different to your personal tax rate, which is the rate used for income such as salary and wages.
What happens if I’ve told you the wrong Prescribed Investor Rate?
If the correct PIR is higher than the one you told us, you may have to pay penalties and interest. If your correct PIR is lower than the one you told us, you generally will not be able to claim back the excess tax you’ve paid.
What happens if my Prescribed Investor Rate changes?
Please let us know in writing of any change to your PIR. While we can’t change tax payments we’ve already made on your account, we will be able to change the rate for future payments. You can also update your PIR online.
What are foreign tax credits?
These make sure you’re not double-taxed on the same income in multiple countries. The amount of foreign tax that has already been paid off-shore is subtracted from the tax owing to the New Zealand Inland Revenue.
Can I receive other tax credits?
You may be entitled to tax credits such as imputation credits, resident withholding tax or dividend withholding payments. You can find out more by going to Inland Revenue’s website at ird.govt.nz.
Will transfers from overseas schemes be taxed?
There is no tax to pay when you transfer your Australian Complying Superannuation Fund savings to your KiwiSaver account.
We recommend that you consult a professional tax advisor before making any decisions.
Are the contributions that my employer makes taxed?
Yes. These contributions are taxed at a rate based on your income, which is worked out as shown in the table below:
|ESCT Rate threshold amount
|$0 – $16,800
|$16,801 – $57,600
|$57,601 – $84,000
|$84,001 and above
We appreciate you may still have questions about how the tax rate works for your KiwiSaver scheme. Please visit the Inland Revenue website for more information – or contact our helpdesk by emailing us or calling 0800 266 463.