{"id":17707,"date":"2021-03-10T00:43:17","date_gmt":"2021-03-10T00:43:17","guid":{"rendered":"https:\/\/stratusnz.nz\/?p=17707"},"modified":"2021-05-14T13:31:29","modified_gmt":"2021-05-14T01:31:29","slug":"dont-set-your-cash-on-fire-check-your-pir-tax","status":"publish","type":"post","link":"https:\/\/stratusnz.nz\/index.php\/2021\/03\/10\/dont-set-your-cash-on-fire-check-your-pir-tax\/","title":{"rendered":"Don\u2019t Set Your Cash on Fire \u2013 Check Your PIR Tax"},"content":{"rendered":"\n

Have you checked your KiwiSaver tax rate recently?\u00a0\u00a0<\/strong>If you\u2019re on the wrong tax rate you may be overpaying or underpaying your tax.<\/strong><\/p>\n

Much like you pay tax on the wages or salary you earn; you also need to pay PIR (Prescribed Investor Rate) tax on any income you receive from KiwiSaver.<\/p>\n

This means that if your KiwiSaver investment grows, you pay a portion of that growth in tax. Likewise, if your investment declines the IRD will pay you a portion of the loss.<\/p>\n

KiwiSaver investments are managed funds called PIEs (Portfolio Investment Entities). Your KiwiSaver provider calculates this tax using the PIR which either you or the Inland Revenue have given them.<\/p>\n

Your KiwiSaver PIR is based on your income from the last two financial years including any PIE income.<\/p>\n

It is important to ensure your PIE has your correct PIR if your circumstances have changed, like if you have retired or taken leave from work. \u00a0Inland Revenue may identify that your PIR is incorrect, and they may contact your KiwiSaver PIE to update your PIR without notifying you.<\/p>\n

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KiwiSaver Tax \u2013 Further Information<\/u><\/strong><\/p>\n

Total taxable income could be from salary, wages, interest, investment dividends and any other income. You may need to seek tax advice to understand what your PIR should be and what incomes are used in determining it.<\/p>\n

One of the advantages of your KiwiSaver being managed by a PIE is that they have a top tax rate of 28% – so your usual income tax rate may be 39% but with PIE investments you automatically have a 5% discount on tax.<\/p>\n

The Inland Revenue has even more information on KiwiSaver tax, click here<\/a> for details.<\/p>\n

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Why Should You Care?<\/strong><\/span><\/p>\n