What is withholding tax?
Withholding tax is tax that's deducted from interest you earn on your Kiwibank accounts. Types of withholding tax include Resident Withholding Tax (RWT) and Non-Resident Withholding Tax (NRWT). We pay the withholding tax we deduct from interest you earn directly to Inland Revenue.
RWT is tax that's deducted from interest you earn if you're a New Zealand tax resident.
You can chose the RWT rate you would like us to use – for more information, please visit ird.govt.nz.
If RWT applies to you, and we don't have your IRD number, any interest earned on your accounts will be deducted at the non-declaration rate of 45%.
NRWT is tax that's deducted from interest you earn if you're a not a New Zealand tax resident. The NRWT rate will depend on the country of tax residence that you advise us.
If you're a non-resident, you can choose to have Approved Issuer Levy (AIL) deducted instead of NRWT. Learn more about AIL at ird.govt.nz.
What is Prescribed Investor Rate (PIR)?
If you have a Notice Saver, PIE Term Deposit, PIE Online Call or Kiwi Wealth KiwiSaver account you'll have a Prescribed Investor Rate (PIR) – this is the rate of tax you pay on PIE income earned and may be different to your resident withholding tax (RWT) rate.
We can’t give you tax advice, so we can’t tell you which PIR you should select. It’s your responsibility to choose your PIR and let us know any changes.
The information below is intended as a general guide only. For tax advice relating to your specific circumstances, you should contact Inland Revenue or a tax professional.
Working out your PIR (individual & joint investors1)
Your PIR will depend on your worldwide income for the last two income years. Generally, an income year runs from 1 April to 31 March. You can find your previous years' PIE income on your PIE tax certificate.
If in either of the last two income years:
Your PIR will be:
If your income calculation above for each of the last two income years results in two different PIRs, you can choose the lower PIR for the current year.
Joint account holders are treated as one account holder and the PIR applied to the account is the highest PIR of any joint account holder.
1 Excludes individuals who are a trustee of a trust. If you're investing as a trust, company, charity, incorporated society or other form of entity please refer to ird.govt.nz or seek advice from a tax professional.
How to check or update your RWT / PIR
You can do this using our mobile app, internet banking or by giving us a call. Any changes you make will apply to both your Kiwibank accounts and Kiwi Wealth KiwiSaver account.
It's best to check that you're using the right tax rate so that you pay the correct amount of tax. If your rate is set too low you may end up with a tax bill at the end of the year.
No internet banking or mobile app access?
- Check your statements to see what PIR is used for your end of month interest – if this is correct you don’t need to contact us.
- To make changes, call us on 0800 113 355 or from overseas +64 4 473 1133 between:
- Mon - Thu: 7am - 9pm
- Fri: 7am - 8pm
- Sat - Sun: 8am - 4:30pm.
- Kiwi Wealth KiwiSaver only? Visit kiwiwealth.co.nz or contact KiwiWealth Customer Services on 0800 427 384 or firstname.lastname@example.org.
Recent RWT changes
Standard terms and conditions
This communication contains general information only and isn't investment or tax advice, as such you shouldn't rely on it as the sole basis for any financial decision. Potential investors should seek professional advice as to whether an investment is right for them, including the taxation implications of investing in an investment.