New Zealanders will see a variety of changes to the KiwiSaver scheme throughout this year with further changes projected to follow. The government objective driving these changes is to assist New Zealanders in building stronger retirement funds.
Government contributions
From 1 July 2026, the government will reduce its contribution from 50 cents to 25 cents from every dollar an employee contributes to their KiwiSaver, with a new maximum annual contribution of $260.72 (down from $521.43). Additionally, if you earn more than $180,000 of taxable income a year, you will no longer be eligible for the government contribution.
Increased minimum contribution rates
From 1 April 2026, the default contribution rate for employees and employers will rise from 3% to 3.5%, to form a combined total of 7%. This means employees electing to contribute to their KiwiSaver will have to pay a minimum of 3.5% of their pre-taxable income, and employers will be required to contribute a minimum of 3.5%, unless the employee applies for a reduction (discussed below). As a result of the increased minimum contribution rates, employees may notice a slight decrease in their take home-home pay.
The default contribution rate is set to rise again to 4% on 1 April 2028, two years from the initial increase. These scheduled increases form part of the government’s plan to gradually increase the default rates in 0.5 increments until 2032 where the combined total is set to reach 12%.
Temporary rate reductions
In light of the upcoming changes, since 1 February 2026 employees have had the option to temporarily opt out of the increased contribution rate by applying for a temporary rate reduction, meaning they will be able to continue contributing 3% of their pre-taxable income from 1 April 2026. The reduction can span from 3 months up to 12 months, with the option of renewal. Where an employee applies for a reduced rate, employers are able to match the reduced contribution rate.
