KiwiSaver Changes: What You Need to Know (and Do Next)

KiwiSaver has seen some major changes following Budget 2025, and many of these are now in effect. If you’re an employer, it’s important to understand what’s changed — and make sure your business is keeping up.

What is KiwiSaver?

KiwiSaver is a voluntary savings scheme designed to help New Zealanders save for retirement or their first home.

With the rising cost of living, recent changes have been introduced to make the scheme more sustainable and effective for the future.

What’s Changed?

Already in place

Some changes have already been rolled out:

• 16–17 year olds can now qualify for government contributions (if eligible)

• Government contributions have reduced to 25 cents per dollar contributed, capped at $260.72 per year

• Those earning over $180,000 are no longer eligible for government contributions

Changes from 1 April 2026

This is where most employers will feel the impact:

• Default KiwiSaver contribution rates have increased from 3% to 3.5% for both employees and employers

• Employers must update payroll to apply the new rate from 1 April

• The new rate applies to the full pay period, even if it spans before and after 1 April

• Employees contributing more than 3% will stay at their current rate, but employer contributions must still increase to 3.5%

For younger employees:

• Employers are now required to contribute for eligible 16–17 year olds

• Contributions apply automatically for existing KiwiSaver members

Temporary rate reductions:

• Employees can apply to temporarily stay at 3% for 3–12 months

• Employers can choose to match this reduced rate

• After 12 months, contributions reset unless re-applied for

Looking ahead to April 2028

The default contribution rate will increase again to 4% for both employees and employers.

What This Means for Your Business

These changes aren’t just administrative — they can directly impact your bottom line.

• Increased employer contributions mean higher payroll costs

• Cashflow may be tighter, especially for businesses with larger teams

• Payroll systems must be updated to avoid errors or compliance issues

Getting this wrong can lead to underpayments, overpayments, or unnecessary stress.

What You Should Do Now

• Review and update your payroll settings

• Check contributions are applied correctly for all employees

• Make sure you’re handling temporary rate reductions properly

• Factor increased costs into your cashflow planning

Need a Hand?

KiwiSaver changes can be easy to overlook — but they can have a real impact if not managed properly.

Don’t get left behind in a fast-moving environment.
Get in touch with our team today and we’ll help you make sure everything is set up correctly and working as it should.