KiwiSaver and PIR Changes: What Union Members Need to Know for 2025

Your KiwiSaver account is one of the most important savings tools you have. But there’s one small detail that can make a big difference to how much you actually keep: your Prescribed Investor Rate, or PIR.

From 1 April 2025, the PIR bands are changing. That makes now a great time to check your details and make sure your KiwiSaver is being taxed correctly. Getting your PIR right can save you money and help your retirement savings grow faster.

What Is a PIR?

PIR stands for Prescribed Investor Rate. It’s the tax rate applied to the earnings inside your KiwiSaver fund. Unlike your wages or salary, which are taxed through PAYE, your KiwiSaver earnings are taxed separately through the PIR system.

When you join KiwiSaver, your provider asks for your IRD number and your PIR. They then use this rate to deduct tax from your investment earnings.
It’s important to know that it’s your responsibility to make sure your PIR is correct. If your income changes, or if you start earning more from investments, you might need to update it.

New PIR Rates from 1 April 2025

The New Zealand Government has announced new PIR bands that will come into effect from 1 April 2025. Here’s how the new rates work:

• 10.5% PIR
  If your taxable income is $15,000 or less, and your total income (taxable income plus PIE income) is $53,500 or less.

• 17.5% PIR
  If your taxable income is $53,500 or less, and your total income is $78,100 or less, but you do not qualify for the 10.5% rate.

• 28% PIR
  If your income is higher than the limits above, you’ll be taxed at the 28% rate.

Choosing the correct rate is important. If you’re on the wrong PIR, it can cost you—either through unexpected tax bills or paying more tax than necessary.

How to Work Out Your PIR

To check your PIR, you’ll need to look at your total income for either of the last two tax years. Your total income includes:

• Your taxable income: Wages, salary, business income, bank interest, dividends.

• Your PIE income: Income from KiwiSaver and other managed investment funds.

Your KiwiSaver provider will send you an annual statement showing how much PIE income you earned. Add this to your regular taxable income to work out your PIR total.

Once you know your combined income, match it to the new bands and update your PIR if needed.
If you are unsure which number to use, your KiwiSaver provider or a financial adviser can help guide you through it.

Why Getting Your PIR Right Matters

When your PIR is too low, you don’t pay enough tax on your KiwiSaver earnings. The IRD can come after you later, asking you to pay the missing tax. That’s a bill nobody wants.

When your PIR is too high, you pay too much tax—and here’s the kicker: you can’t get a refund. Overpaying is just money lost.

By checking your PIR each year, you can make sure your KiwiSaver is growing as fast as it should, without unnecessary tax eating into your returns.

When Should You Check Your PIR?

The best time to review your PIR is at the end of each tax year, around March. This is when you’ll have a good idea of your income for the year and can make any updates if needed.

You should also review your PIR if:

• You get a pay rise.

• You change jobs.

• You move from full-time to part-time work, or vice versa.

• You start earning extra income, like rental income or investment earnings.

Some KiwiSaver providers and the IRD might contact you if they think your PIR looks wrong, but ultimately, it’s your job to check it.

How to Update Your PIR

Updating your PIR is easy.
Most KiwiSaver providers let you do it online through your account portal. You can also call or email them to update your rate. Make sure you have your IRD number handy when you do.

It’s a quick task that can save you hundreds of dollars over time.

Keeping More of Your KiwiSaver

Understanding your PIR and checking it regularly is a simple but powerful way to protect your savings. With the new PIR bands coming into effect from April 2025, it’s more important than ever to take a few minutes to make sure everything is set correctly.

Your KiwiSaver is meant to work hard for your future. Don’t let unnecessary tax payments slow you down. A quick check now means more money in your pocket later—right where it belongs.