Real Return Calculator NZ

This calculator works out what your investment actually earns once tax and inflation are stripped away, the figure that tells you whether your money is truly growing or just standing still. A headline return of 5% can look impressive, but tax takes a share of the earnings and rising prices eat into what is left, so what you keep is often far smaller than advertised. You enter your nominal return, the tax rate that applies (your PIR for a PIE fund, or your marginal rate otherwise), and the inflation rate you expect. The calculator deducts tax to give your after-tax return, then divides through by inflation using the proper compounding relationship rather than a rough subtraction, so the figure is accurate. It returns three results: the real return as a percentage, the after-tax return, and the real gain in dollar terms on a $10,000 investment, so the outcome feels concrete. Use it to compare investments on a level footing, to check whether a term deposit or bond is keeping pace with the cost of living, or to see how much tax and inflation are quietly eating into your returns. A real return close to zero means your savings are only holding their value rather than building wealth. This is an indicative estimate only, not financial advice, and your actual outcome depends on your real tax position and how inflation moves.

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Nominal return

Tax rate on earnings

Inflation

1.07%

real return, after tax and inflation

After-tax return3.60%

On $10,000, real gain a year$107

The tax rate might be your PIR for a PIE fund or your marginal rate for other income; use the one that applies. Inflation is what you expect over the period. A real return near zero means your money is only holding its value. Estimate only, not financial advice.

How it works

The calculator first takes tax off the nominal return to give the after-tax return, then adjusts that for inflation to give the real return in buying power. It uses the proper relationship, dividing by inflation rather than simply subtracting, so the figure is accurate. It also shows the real gain on a $10,000 investment over a year, to make the result concrete rather than just a percentage.

Worked example

A 5% return taxed at 28% leaves about 3.6% after tax. With inflation at 2.5%, the real return is only about 1.07%. On $10,000 that is roughly $107 of genuine gain in buying power for the year, far less than the 5% headline rate suggests.

Related calculators

Inflation Calculator: the effect of inflation.
Compound Interest Calculator: growth over time.

Frequently asked questions

What is a real return?

A real return is your investment return after tax and inflation are taken out. It is what your money actually gains in buying power, which is the figure that matters, rather than the headline rate before tax and rising prices.

How do tax and inflation affect my return?

Tax takes a share of your earnings, and inflation erodes what each dollar buys. A 5% return taxed and then adjusted for inflation can leave a real return close to zero, which is why looking past the headline rate is so important.

Why does the real return matter?

Because it tells you whether your money is truly growing in buying power or just keeping up. An investment with a high headline return but a low real return may not be building wealth as much as it seems.