Two rates decide how much tax comes off your savings before you see the money. RWT (resident withholding tax) applies to interest from bank accounts and term deposits. PIR (prescribed investor rate) applies to PIE funds, which include many KiwiSaver schemes and managed funds. You choose both, and both are worked out from your income.
RWT rates on interest
Your bank deducts RWT before it pays you interest. If you've given your bank your IRD number, you choose a rate that matches your income tax rate:
| Your total taxable income | RWT rate |
|---|---|
| Up to $15,600 | 10.5% |
| $15,601 to $53,500 | 17.5% |
| $53,501 to $78,100 | 30% |
| $78,101 to $180,000 | 33% |
| $180,001 and over | 39% |
These thresholds have applied since 31 July 2024. They line up with the income tax brackets.
Defaults if you don't choose
| Situation | RWT deducted |
|---|---|
| No IRD number given to the bank | 45% |
| IRD number given, no rate chosen | 33% |
| Company, no rate chosen | 28% |
Companies can choose 28%, 33% or 39%. Trustees and Māori authorities can use 17.5%, 30%, 33% or 39%. Trustees of testamentary trusts can also use 10.5%.
Picking your RWT rate
Use your marginal tax rate, the rate on your top dollar of income. Include your interest when you estimate your income. If your salary is $50,000 and you earn $5,000 in interest, your total is $55,000. Your top rate is 30%, so choose 30%.
For a joint account you can only use one rate. Inland Revenue's example: if one holder earns over $53,500 and the other earns $53,500 or less, choosing 30% avoids an end-of-year bill for the higher earner. Joint interest is split equally between the holders who gave their IRD numbers.
Dividends
RWT on dividends is 33%. Imputation credits attached to the dividend can offset it. The company tax post explains how imputation works.
PIR rates for PIE funds
A PIE (portfolio investment entity) taxes your investment income at your PIR. For New Zealand tax resident individuals, the PIR is 10.5%, 17.5% or 28%. You can't choose 0%.
Your PIR depends on your income in either of the last two tax years. For the year ending 31 March 2027, that means the years ending 31 March 2025 and 31 March 2026. If you qualify for a lower rate in either year, you can use it.
| In either of the last 2 tax years, was your… | PIR |
|---|---|
| taxable income (excluding PIE income) $15,600 or less, and taxable income plus PIE income $53,500 or less? | 10.5% |
| taxable income (excluding PIE income) $53,500 or less, and taxable income plus PIE income $78,100 or less? | 17.5% |
| Neither of the above | 28% |
If you don't give your PIE a rate, it uses the default of 28%. New investors also have 6 weeks to give their IRD number, or the account is closed and the money returned less tax.
Example
Last tax year you earned $45,000 in salary and your KiwiSaver earned $2,000. Your taxable income excluding PIE income is over $15,600, so 10.5% is out. It's under $53,500, and with the PIE income it's $47,000, under $78,100. Your PIR is 17.5%, as long as the other year doesn't give you 10.5%.
What happens if you pick the wrong rate
RWT
RWT is deducted during the year. Inland Revenue says it should match your income tax rate. If it's too low, you may get a bill at the end of the year. At the end of the tax year, Inland Revenue works out whether you paid the right amount of tax overall, and the RWT already deducted counts towards that. Too much deducted can mean a refund. The tax refund post covers how assessments work.
PIR
Inland Revenue now checks your PIR in your end-of-year income tax assessment. It works out the PIR you should have used for the full year, then compares the tax paid with the tax owed.
- PIR too high: you get a PIE credit. It reduces any income tax you owe, and the rest is refunded.
- PIR too low: you get a PIE debt. It's added to any income tax you have to pay.
Inland Revenue's own example: a KiwiSaver member who used 28% when she should have used 17.5% had $376.60 deducted instead of $235.38. She got a PIE credit of $141.22.
A loss year works the other way. If your fund makes a loss and your PIR is too high, the fund credits you more than you were entitled to. Inland Revenue then asks for the difference back.
If your residual income tax, including any PIE debt, is more than $5,000, you have to pay provisional tax the next year.
Review your rates each year
Both rates follow your income, so check them when your income changes. Tell your bank about a new RWT rate, and your PIE or KiwiSaver provider about a new PIR. Inland Revenue asks PIEs to get investors to review their PIR once a year.
Common questions
What RWT rate should I choose?
The rate that matches your marginal income tax rate, counting your interest as income: 10.5% up to $15,600, 17.5% up to $53,500, 30% up to $78,100, 33% up to $180,000, and 39% above that.
What PIR should I use for KiwiSaver?
If your KiwiSaver scheme is a PIE, use the PIR from the table above, based on your income in either of the last two tax years. If you don't give your provider a rate, it uses 28%.
Is 28% PIR the same as the top tax rate?
No. 28% is the highest PIR for resident individuals, even if your income tax rate is 33% or 39%.
Do I get PIE tax back if my PIR was too high?
In most years, yes. Inland Revenue's end-of-year PIE calculation gives you a credit that reduces your income tax or is refunded. In a year your fund makes a loss, a PIR that's too high means you owe money back.
Sources: Inland Revenue, Using the right RWT rate, PIE income for NZ residents, Prescribed investor rate IR861 (March 2026), Find your prescribed investor rate, Multi-rate PIEs and prescribed investor rates and End-of-year PIE calculation. Checked October 2026. General information, not tax advice.
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