Definition
What is PIR (Prescribed Investor Rate)?
The tax rate applied to your PIE fund investments, based on your income level.
The Prescribed Investor Rate (PIR) is the tax rate applied to your investments in Portfolio Investment Entities (PIE funds). It's based on your taxable income and is often lower than your marginal tax rate, making PIE funds tax-efficient.
PIR Rates (2024/25): - 10.5% - Taxable income under $14,000 (individual) or $28,000 (couple with $48K combined) - 17.5% - Taxable income under $48,000 (individual) or $70,000 (couple) - 28% - Taxable income over $48,000 (individual) or $70,000 (couple)
How to Determine Your PIR: 1. Check your taxable income for the past 2 years 2. Include salary, business income, and investment income 3. Exclude PIE income itself from the calculation 4. Use the rate matching your income bracket
Important: - You MUST notify your fund of your correct PIR - Using too low a rate may result in tax shortfall and penalties - You can elect a HIGHER rate but not lower than entitled - Review annually as income changes
Related Terms
PIE Fund (Portfolio Investment Entity)
A tax-efficient fund structure where tax is calculated at your Prescribed Investor Rate, often lower than marginal rates.
Tax Structure
The legal-entity classification of a fund (PIE, Limited Partnership, Unit Trust, etc.) that determines how income flows to investors and the applicable tax treatment.
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Educational Content Disclaimer
This glossary provides general educational information only and does not constitute financial, legal, or tax advice. Definitions and explanations are simplified for educational purposes and may not cover all aspects or nuances of each term.
Before making any investment decision, you should seek independent advice from appropriately qualified professionals. Wholesale Investor does not recommend or endorse any particular investment, strategy, or fund manager.