KiwiSaver

TAX


Any returns you make on your investment in the NZDF Savings Schemes are subject to tax. Mercer will deduct the appropriate amount from your account and pay it to Inland Revenue on your behalf.

  • The tax rate applied to earnings from your KiwiSaver, FlexiSaver or Defence Forcer Superannuation Scheme accounts is called your Prescribed Investor Rate (PIR). It could be 10.5%, 17.5% or 28%, depending on your income for the previous two years.
  • We pay tax to Inland Revenue on your behalf, you don’t need to file a tax return for your Mercer retirement savings accounts; Inland Revenue is moving to help make sure investors, including NZDF Savings Scheme’s members, get on the correct PIR. A wash up calculation is provided by Inland Revenue at year end.

GET YOUR RATE RIGHT

Choosing the wrong PIR can have significant consequences, so it's best to get it right.

 

 

  • If you don’t provide your IRD number and your PIR, highest 28% rate will apply.
  • 2021 tax year end onwards, IRD will notify the correct PIR based on personal income, and providers LIKE Mercer must update the PIR accordingly; 
  • 2021 tax year end onwards, overpaid PIE tax may be refunded. Underpaid PIE tax is included in the year end tax calculation of the member and the member will be required to pay the shortfall;
  • If you are a new resident, when you work out your PIR, you must include non-New Zealand sourced income for that particular income year – even if you weren't a tax resident in New Zealand when the income was earned. You may elect out of this treatment in some cases, visit Inland Revenue's website www.ird.govt.nz to find out more.

  • Update Your PIR online

    To check or update your PIR, log in to your account online or via NZDF Savings Schemes App.

    To update the PIR online:

    1. Login and click  'personal details' on the top right corner
    2. Scroll down, and you can see your current PIR rate; as well as selecting your new PIR with rate effective date;
    3. If your PIR is correct then you don't need to do anything.
    4. Click ‘submit’ to complete the changes if you need to update your PIR. 

    If you are not sure about your tax rate, you can work it out in 2 minutes with this PIR calculator. Alternatively, please refer to the PIR table below.

    *Previous two income years refers to the two years prior to the tax year that the PIR is being applied to. An income year is generally the period from 1 April to 31 March of the following year. However, an income year can start and end on alternative dates if Inland Revenue consents. The tax year is always the period from 1 April to 31 March of the following year.

    Important: Please note that any information in this material regarding legal, accounting or tax outcomes does not constitute legal advice or an accounting or tax opinion and prior to relying and acting on this information it is important that you seek independent advice from a qualified lawyer or an accountant regarding this information.