Learn more about PIE.

PIE stands for Portfolio Investment Entity. A PIE can help you save more of your money because you could pay less tax if you are on the right PIE rate.

Note: Personal income tax brackets changed from 31 July 2024. However, the PIR income bands do not change until 1 April 2025. A PIE product may not be beneficial for some individuals for the tax year ended 31 March 2025 where their interest income from regular savings accounts may be subject to a lower income tax rate under the new income tax bands. You should seek advice from a tax advisor if you are unsure if a PIE product is suitable for you following the income tax rate changes.

Example 1:

Individual investors currently earning over $48,000 of taxable income

Note - includes those holding a joint account.

If you are an individual currently earning over $48,000 of taxable income, your Prescribed Investor Rate (PIR) will be capped at 28% and will be lower than your income tax rate - allowing you to benefit from a tax saving.

Taxable income1 Income tax rate 
(on deposits in
a regular
savings account)
Prescribed Investor Rate (PIR) Tax benefit on your PIE returns
48,001 - $70,000 30% 28% 2%
$70,001 - $180,000 33% 28% 5%
Over $180,000 39% 28% 11%

1 Examples of taxable income include salary, wages, commission, NZ Super, rent, interest and dividends, student allowances, parental leave, tips and gratuities. When calculating your taxable income to determine your PIR, you must also include non-New Zealand sourced income for the relevant income year, even if you were not a New Zealand tax resident when it was earned. New residents will be able to elect out of this treatment in some cases, see www.ird.govt.nz. For individuals, taxable income does not include PIE income that has been subject to a final tax from PIE compliant KiwiSaver schemes and managed funds.

Example 2:

Trustee or beneficiary of a family trust

A trust (excluding a unit trust or charitable trust) that invests in a PIE can potentially enjoy the same tax benefits as someone earning over $53,500 of taxable income if the PIE notifies a PIR of 28%.

A trust can either hold income from a PIE in the trust or pass the income to its beneficiaries.

If income from a regular savings account is held and taxed within the trust as trustee income, it will be taxed at the trustee income tax rate of 33% or 39% if trustee income is more than $10,000 p.a. (except for certain superannuation funds for which an income tax rate of 28% applies).

              Taxable income1 Income tax rate 
(on deposits in
a regular
savings account)
Prescribed Investor Rate (PIR) Tax benefit on your PIE returns
Trustee All income levels 33%/39% 28% 5%/11%
Beneficiary $48,001 - $70,000  30% 28% 2%
$70,001 - $180,000  33% 28% 5%
Over $180,000 39% 28% 11%

 1 Examples of taxable income include salary, wages, commission, NZ Super, rent, interest and dividends, student allowances, parental leave, tips and gratuities. When calculating your taxable income to determine your PIR, you must also include non-New Zealand sourced income for the relevant income year, even if you were not a New Zealand tax resident when it was earned. New residents will be able to elect out of this treatment in some cases, see www.ird.govt.nz. For individuals, taxable income does not include PIE income that has been subject to a final tax from PIE compliant KiwiSaver schemes and managed funds.

Example 3:

You are an individual whose taxable income has recently increased, and your income tax rate was previously 10.5% (under $14,000) or 17.5% ($14,001 to $48,000)

Your PIR is based on your lowest taxable income in either of your previous two income years.

If you earn more taxable income in the current income year than either of the two previous income years and this puts you in a higher income tax bracket, tax on your PIE returns can temporarily remain on a lower rate, for up to two income years.

This situation may occur as a result of a salary increase (e.g. entry or return to full-time work) or an increase in rental income.

Example 4:

You currently earn below, but close to $14,000 or $48,000, and your savings income will push you into the next income tax bracket

You can earn some additional income through a PIE without an increase in your tax rate on your PIE savings.

This is most likely to occur if you currently earn near the upper limit of your income tax bracket – that is, below but close to $14,000 with a 10.5% income tax rate or $48,000 with a 17.5% income tax rate.

If you start or continue to save in a regular savings account, it's likely your taxable income will tip over $14,000 or $48,000. This will increase your income tax rate to 17.5% or 30% (for the portion of your taxable income above $14,000 or $48,000) respectively.

However, if you save through a PIE instead, you can save more without an increase in tax on your savings. Your PIR would still stay at 10.5% or 17.5% respectively if your:

  • Taxable income stays below $14,000 and your total income (taxable income plus PIE income) is not more than $48,000. In this case, a 7% tax benefit (17.5% - 10.5%) would apply to your income over $14,000; or

  • Taxable income stays below $48,000 and your total income (taxable income plus PIE income) is not more than $70,000. In this case, a 12.5% tax benefit (30% - 17.5%) would apply to your income over $48,000.

Next steps.

Examples of when a PIE might not be suitable for you

Learn more

Understanding your PIR

Learn more

Investing in a PIE

See your options

Investing in KiwiSaver

Learn more

Things you should know.

To ensure you can enjoy the potential tax benefits of PIEs, you must provide your IRD number and your correct PIR when you open your account. Please review your PIR each year and if your PIR changes due to a change in circumstances, let us know straight away.

The information on this webpage is intended for general tax information and illustrative purposes only, it does not constitute tax advice, and should not be relied upon for tax purposes.

Taxation legislation, its interpretation and the rates and bases of taxation may change. You should seek professional advice on the tax implications of investments based on your particular circumstances.

You should seek independent professional advice on the tax implications of your investments based on your particular circumstances.

Westpac, BT Funds Management (NZ) Limited and Trustees Executors Limited do not accept any responsibility for the tax consequences of your investment in a PIE.