KiwiSaver and tax
Find out how your contributions and your investment income are taxed.
Your KiwiSaver contributions are calculated on your before-tax pay. However, you still pay tax on the full amount that you earn.
For example, if you earned $100 and had 8% ($8) KiwiSaver contributions deducted, you would still pay tax on the full $100.
Your employer contributions
All employer superannuation cash contributions (employer contributions) will be liable for tax. This means that there may be a reduced amount of employer contributions being paid into your KiwiSaver scheme.
Your KiwiSaver investment income
Your investment earnings are taxed. This tax will be deducted by your KiwiSaver provider. Your provider then pays the tax to Inland Revenue on your behalf.
A scheme can be a:
- widely-held superannuation fund, or a
- portfolio investment entity (PIE).
Your product disclosure statement will tell you what type of scheme you have. The scheme types have different tax rates on their investment earnings.
Widely-held superannuation funds
If your scheme is a widely-held superannuation fund then your investment earnings will be taxed at 28%.
Portfolio investment entities (PIEs)
The tax rate for your investment earnings from a PIE is referred to as your prescribed investor rate (PIR). Your provider will ask you for your PIR every year.
All of the KiwiSaver default schemes are portfolio investment entities (PIEs).
Visit the Inland Revenue website to work out your PIR.
Withdrawals from your KiwiSaver account are tax-free.