22/01/2026
What’s Changing with KiwiSaver in 2026 (and Beyond)
KiwiSaver is New Zealand’s voluntary retirement savings scheme, governed primarily by the KiwiSaver Act 2006. It encourages Kiwis to save for retirement and, in many cases, for a first home. Employers currently must make contributions on top of an employee’s salary if the employee is eligible and enrolled.
As part of the 2025 Budget changes, the Government has legislated phased KiwiSaver reforms that will take effect starting 1 April 2026. The changes affect both employee and employer contribution rates, eligibility, and rate flexibility — with payroll and tax implications employers need to plan for.
Key Changes Employers and Employees Should Know
📈 Higher Compulsory Contribution Rates
From 1 April 2026, the default minimum KiwiSaver contribution rate for both employees and employers increases from 3 % to 3.5 % of before-tax pay.
This is part of a staged increase, with a further rise to 4 % from 1 April 2028.
This rate is compulsory for default members (those who haven’t actively chosen another rate) unless a temporary reduction is approved (explained below). Employers must ensure payroll systems are updated to reflect these rates and that contributions are calculated on top of salary (not included in it).
👶 Employer Contributions for Younger Workers
Before April 2026, employer KiwiSaver contributions are compulsory only for employees aged 18–65. From 1 April 2026, employers must also contribute for eligible 16- and 17-year-old employees who are KiwiSaver members.
🔄 Temporary Rate Reductions (Flexibility)
In recognition that some workers may find the higher rate hard to afford, KiwiSaver members can apply for a temporary reduction back to 3 % from 1 February 2026.
These applications cannot take effect until the first pay period on or after 1 April 2026.
Employers may choose to match the employee’s temporary lower rate.
Inland Revenue will notify employers of approved reductions and when they start or end.
Each temporary reduction must be at least 92 days and at most 12 months, and employees can reapply as needed.
This flexibility gives employers and employees time to manage cash flow and budgeting around the rate change.
2026 KiwiSaver Change Schedule
Date What Happens
1 Feb 2026 Employees can apply for temporary KiwiSaver rate reductions (takes effect from April pay). Employers prepare for notifications.
1 Apr 2026 Default KiwiSaver employee and employer rate rises to 3.5 %. Employers must update payroll contributions. Employer contributions start for eligible 16- and 17-year-olds. Temporary rate reductions take effect.
1 Apr 2028 Default KiwiSaver rate increases again to 4 % (future planning). Employers should roadmap systems and costs.
Tax and Payroll Implications
KiwiSaver employer contributions remain tax-deductible business expenses, but employers need to account for rising payroll costs as contribution rates increase.
Employers must ensure their payroll software applies the correct contribution rates from the effective dates above — failing to do so could lead to liabilities and compliance issues with Inland Revenue (IRD).
Temporary rate reductions and notifications from IRD may require employers to adjust contributions mid-year, so clear processes for handling IRD correspondence and employee certificates are critical.
Why These Changes Matter
These reforms aim to strengthen retirement savings by increasing the amount going into KiwiSaver over time. While slightly higher contributions mean a small dip in take-home pay initially, the long-term benefit is larger accumulated savings for retirement. For employers, the increases highlight the importance of budgeting and systems readiness – especially in a tight labour market and changing regulatory environment.
What Employers Should Do Now
✔ Update payroll systems and templates for April 2026 default rate increases.
✔ Communicate with staff about the changes and the upcoming temporary rate reduction option.
✔ For businesses with 16–17-year-old employees, ensure employment records capture eligibility properly.
