KiwiSaver Changes: How to Prepare Your Business

KiwiSaver’s had a bit of a shake-up.

Announced as part of Budget 2025, some big changes are coming to the KiwiSaver scheme that will impact both your team and your payroll. While these updates are designed to help younger Kiwis save and make the system more sustainable long term, they do bring some extra considerations for small business owners like you.

Let’s walk through what’s changing and how to prepare.

What’s changing for your employees?

From 1 July 2025, you’ll see the first wave of changes affecting your team:

• 16- and 17-year-olds will now qualify for government contributions
  Up until now, only those 18 and over were eligible. From July, if a 16- or 17-year-old employee meets the usual criteria, they’ll get the government top-up too.

• Government contributions will be halved
  The maximum annual contribution from the government will drop from $521.43 to $260.72. It’s still something – but definitely less than before.

• High earners will no longer receive government contributions
  If someone earns over $180,000 per year, they’ll no longer qualify for that annual government boost.

• No change for the current year
  For the year ending 30 June 2025, contributions stay the same – these will still be paid out in July and August at the current rate.

What does this mean for your business?

Then from 1 April 2026, things start to shift for you as an employer:

• Employer contributions will increase to 3.5%
  That’s up from the current 3%, and it will apply to all eligible staff – unless they’ve applied for a temporary reduction.

• Employees can apply to stay at 3%
  Team members can choose to keep contributing at 3% by applying for a temporary rate reduction (available from February 2026).

• You can match their reduced rate
  If an employee applies to contribute at 3%, you can match that rate too. But when they return to 3.5%, so do you. IRD will let you know when this happens.

• Contributions for younger workers kick in
  If you have 16- or 17-year-olds on the team who are contributing to KiwiSaver, you’ll now be required to make employer contributions for them too.

And from 1 April 2028, the default rates rise again – this time to 4% for both employers and employees.

How to get ready

These changes might seem small on paper, but they can have a real impact on your payroll and cashflow.

Here are a few things to think about now:

• Budget for increased employer contributions

• Review how the changes affect any younger employees you have (or may hire soon)

• Make sure your payroll software is up to date and ready for the new contribution rates

• Plan to communicate clearly with your team, so they know what’s changing and when

If you’d like to chat through how these changes will affect your business, or need help updating your payroll systems, get in touch with us. We're here to help you stay ahead of the curve.

Let’s get your business ready for the KiwiSaver updates.