The SuperLife workplace savings scheme, SuperLife Invest, and SuperLife KiwiSaver scheme are “PIEs”. Therefore, we deduct tax at your PIR rate from the portion of the investment income that is taxable before it is added to your savings accounts. We pay the tax to the IRD.

Currently, PIRs for New Zealand tax residents can be 10.5%, 17.5% or the maximum applicable tax rate of 28%. For people earning above $48,000, it is generally 28%. However, if you earned less than $48,000 a year, in any one of the last two tax years, it may be 10.5% or 17.5%. Each year you should check to see that your PIR is correct.

PIR calculator

  1. In one of the last two tax years to 31 March, was your taxable income $14,000 or less?

General guide

As a general guide for New Zealand tax residents:

Your taxable income Most likely PIR
0 to $14,000 10.5%
$14,001 to $48,000 17.5%
$48,001 plus 28%

 

  • Anyone that earned $14,000 or less in any one of the previous two tax years (1 April to 31 March) will be on 10.5%
  • Anyone that earned $14,001 to $48,000 in any one of the previous two tax years (1 April to 31 March) will be on 17.5%
  • Anyone that earned more than $48,000 in each of the last two tax years (1 April to 31 March) will be on 28%
  • If you are an overseas tax resident, your PIR is 28%
  • Young children will normally be on 10.5% because they are likely to have earned no taxable income, or earned income below $14,000 a year

It is not as simple as the general guide suggests as there is a second test that includes your investment income from your investments that are PIEs. While this income does not form part of your taxable income it may increase your PIR.  Use the flow chart to work out your PIR. 

 

PIR flowchart

PIR flowchart July 2015

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FAQs

Where do I find out what my current PIR is?

We will tell you on each of your statements what PIR rate we currently hold for you. You can also see it on the Internet if you are registered for Internet access, or you can phone us (0800 27 87 37) at any time.

When should I review my PIR?

Each year (March is a good time) you should review your PIR and tell us if it has changed.

Subject to what the law requires, we will continue to use your last advised PIR, until you tell us to use a new one. We will remind you each year to check that your PIR is correct.

What if my PIR is wrong?

If you tell us that your PIR is 17.5% when it should have been 28%, or tell us 10.5% when it should have been 17.5% or 28%, we will deduct tax at the lower rate. If it is then discovered that your PIR should be higher, the Inland Revenue Department could ask you later to pay the extra tax (plus penalties). You should complete the PIR advice form correctly and review it each year to keep it up-to-date. 

Where do I get a PIR advice form?

You can find it on our website under "forms," or phone 0800 27 87 37 and ask us to send you one.

How do I change my PIR?

To change your PIR:

Note: the new PIR will generally apply from the date that you advise us.

What if my income changes?

If your income changes during a year, it does not affect your PIR until the next year at the earliest. Your PIR is based on your annual income in whichever of the last two years gives you the lower PIR.

Does my PIE income affect my own tax returns?

No. As long as we have your correct PIR, we will deduct the appropriate tax (either 10.5%, 17.5% or 28%) from the taxable investment income allocated to your accounts. There will be no more tax to pay and it doesn’t affect your tax return.

 

Questions

We have tried to explain PIRs as simply as possible. However, the tax law is complex. If you have any questions, please contact us.

 

Detailed guide to calculating PIR

Your PIR is 10.5%, 17.5% or 28%. The default PIR is 28%. If your PIR is not 28%, you must tell us before we can apply the lower rate.

Your PIR for any year is calculated based on your PIR Total Income in the two prior tax years (1 April to 31 March). You calculate your PIR separately for each year and then choose the year that gives you the lower PIR. For example, for the period from 1 April 2017 to 31 March 2018, you would calculate your PIR Total Income for the year to 31 March 2016 and the year to 31 March 2017.

 

Non-residents

For non-residents, the 28% PIR tax rate applies.

 

New residents

You need to include your worldwide income when determining your PIR. However, you may choose not to include your worldwide income for either or both of the income years if you reasonably expect that your taxable income in either of your first two years as a resident will be significantly lower than your total income from all sources for the previous income year(s).

 

Work out your “PIR Total Income”

To calculate your PIR, you need to calculate your “PIR Total Income” which is your Total Taxable Income

plus your Total PIE Income. Enter your details to 31 March for last year, and the year before.

 work out pir 2015.PNG

 

 

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