kiwisaver, ird, tax

IRD sending one million letters to Kiwis on wrong KiwiSaver tax rate

  • Fabook Messenger Sharing Link

The Inland Revenue Department will send more than one million letters to people on the wrong tax rate for KiwiSaver this year.

According to an article in the NZ Herald, the tax department started sending out letters to people who had not paid enough tax on their KiwiSaver investments in May 2019 prompting an outcry from people worried about getting an unexpected tax bill.

The tax rate in question is the Prescribed Investor Rate or PIR which every KiwiSaver member has to provide to their KiwiSaver provider. 

The PIR is based on a members last two years income. As per IRD rules if you use a rate that is lower than your correct PIR, you will need to complete an income tax return at the end of the year and pay any additional tax (plus any penalties and interest charged by Inland Revenue). However if you use a rate that is higher than your correct PIR, you will not get a refund of any overpaid tax.

This makes it very important to use a correct PIR. You can use the PIR calculator here to determine the correct PIR rate to use for your KiwiSaver account.

Read the full article here.

  • Fabook Messenger Sharing Link
Get a HealthCheck on your KiwiSaver account

You may also like

What is KiwiSaver?

When most Kiwis turn 65 they are entitled to the NZ superannuation which is a pension that is paid fortnightly. However, the..

Why we only work with KiwiSaver providers who pay us

At National Capital, our mission is to help 1 million Kiwis become financially secure. To achieve this, our first step is..

COVID-19 and 5 KiwiSaver mistakes

As the economy experiences a downturn, so do the financial markets and so does KiwiSaver. This causes unease and discomfort..

Best Performing KiwiSaver Funds - Mar 2020

Since the 2008 financial crisis and the onset of the Great Recession, a growing chorus of voices has urged major economies and..

How long is long-term investing?

“KiwiSaver is a long term investment.” We have all heard this phrase, but what exactly does long-term mean? What would you..

Milford’s Active Growth Fund management through COVID-19

The COVID-19 pandemic has caused an unprecedented human and health crisis. Measures have been taken across the globe to fight..