PIE Tax
Portfolio Investment Entity tax. The tax rate on your KiwiSaver and managed fund returns. Your rate depends on your income: 10.5% (under $14K), 17.5% ($14-48K), or 28% (over $48K). Set it correctly to avoid overpaying.
PIE tax (Portfolio Investment Entity tax) is the tax you pay on returns from your KiwiSaver and managed fund investments. Unlike regular income tax, PIE tax has a maximum rate of 28%, which is lower than the top income tax rate of 39%.
Your PIE rate depends on your taxable income: 10.5% if you earn under $14,000, 17.5% if you earn $14,000-$48,000, or 28% if you earn over $48,000.
The key advantage of PIE tax is that it is a final tax: you do not need to include it in your tax return. But you need to make sure your rate is set correctly with your KiwiSaver provider. If your rate is too high, you'll overpay tax. If it's too low, IRD will come looking for the difference.
Why this matters
Getting your PIE rate right is one of the easiest ways to keep more of your investment returns. Many people never check their PIE rate after first signing up for KiwiSaver, even if their income has changed. Log into your KiwiSaver provider's website and check. It takes two minutes and could save you hundreds over time.
More KiwiSaver terms
KiwiSaver
New Zealand's voluntary retirement savings scheme. You contribute a percentage of your salary (3.5%, 4%, 6%, 8% or 10%), your employer contributes at least 3.5%, and the government adds up to $260.72 a year. Money is locked until age 65 (with exceptions for first home and hardship).
KiwiSaver First Home Withdrawal
After 3+ years of contributing, you can withdraw most of your KiwiSaver balance to buy your first home. You must leave $1,000 in the account.
First Home Grant
Closed. The First Home Grant stopped taking new applications on 22 May 2024 and is not returning. It paid $3,000-$10,000 per person to first home buyers who met KiwiSaver contribution and income tests. The KiwiSaver first-home withdrawal and the First Home Loan are the schemes that still exist.
Conservative Fund
A KiwiSaver or managed fund that invests mostly in bonds and cash. Lower risk, lower returns. Suitable if you're close to retirement or plan to withdraw soon.
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