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PIR

Prescribed Investor Rate (PIR)

The tax rate applied to your share of a PIE fund's taxable income. NZ has three PIRs for resident individuals — 10.5%, 17.5% and 28% — chosen using a two-year look-back of taxable + PIE income.

The Prescribed Investor Rate (PIR) is the tax rate that applies to your share of a Portfolio Investment Entity (PIE) fund's taxable income. NZ resident individuals have three PIR options: **10.5%, 17.5% and 28%**.

Your correct PIR is determined using a **two-year look-back rule**: take the lower of your taxable income + PIE income in each of the last two income years, then map that to a threshold. As a rough guide for resident individuals: total taxable income ≤ NZ$15,600 and combined income ≤ NZ$53,500 → 10.5% PIR; total taxable income ≤ NZ$53,500 and combined income ≤ NZ$78,100 → 17.5% PIR; otherwise → 28% PIR. The exact thresholds and combined-income calculation are set out in IRD's "Find my PIR" guidance and update from time to time.

The two-year look-back means you generally do not have to predict your current-year income to choose a PIR — you can rely on the higher of the last two years' incomes, which is usually easier to verify. If both of the last two years would have placed you in a lower bracket, you use the lower PIR.

Most fund providers ask for your PIR when you open an account and let you change it on request. Using too high a PIR overpays tax (refundable in the end-of-year adjustment since 1 April 2020); using too low a PIR underpays and the shortfall is collected at year-end via the same adjustment process. The fund manager deducts PIE tax based on the PIR on file at the time the PIE income is attributed.

Non-resident PIE investors pay tax under different rules — typically the Notified Foreign Investor (NFI) regime if the PIE is set up to support it, or the standard 28% non-resident PIE rate otherwise.

Real examples from NZ fund disclosures

Verbatim quotes from NZ retail managed-fund disclosure documents lodged on the FMA Disclose register.

See this in practice

Common questions

What is the highest PIR?
The highest PIR for a NZ-resident individual is 28%. PIE tax is capped at this rate even if your personal income-tax rate is higher.
How does the two-year look-back work?
You look at your taxable income + PIE income for each of the two most recent income years (the year just ended and the one before it). For each year, work out which PIR band you would fall in. Your correct PIR is the lower of the two — i.e. the look-back picks the cheaper rate that either year supports.
What happens if I use the wrong PIR?
If your PIR was too high, IRD refunds the over-paid tax in your end-of-year adjustment. If your PIR was too low, IRD collects the shortfall in the same end-of-year adjustment. Rules around refunds were tightened in 2020 to make refunds the norm rather than the exception.
How often can I change my PIR?
You can change your PIR at any time by notifying your fund provider. The new rate applies to PIE income earned from that point forward. Providers usually let you update it through their online account portal.
What PIR applies to non-resident investors?
Non-resident PIE investors pay tax under a separate regime. If the PIE is registered with IRD as supporting Notified Foreign Investors (NFI), foreign-sourced income is generally taxed at 0% and NZ-sourced income at the relevant non-resident withholding-tax rate. If the PIE is not NFI-eligible, non-residents pay the standard 28% non-resident PIE rate. Check IRD guidance and the specific PIE’s OMI for its NFI status.

Primary sources

Related terms