KiwiSaver Changes

Ben Lisipeki • February 19, 2026

Kiwisaver default employer and employee contribution rates

The default KiwiSaver contribution rate will rise to 3.5% (from 3%) for employer and employee contributions. This change is effective 1 April 2026. 

This is part of the government's larger plan to progressively increase contribution rates to 4%.


Employee Temporary Rate Reduction

Employees can apply to remain at a 3% contribution rate from 1 April 2026 if they choose.

  • Applications are made by employees through their MyIR
  • Temporary reductions can be for 3 to 12 months
  • Employees can reapply as many times as needed

Employers can choose to match the temporary rate reduction for the Employer Contribution. Once the employee moves from the temporary rate to a higher rate, the IRD will notify the employer.


Contributions for 16 and 17-year-olds

From 1 April 2026, compulsory employer KiwiSaver contributions will extend to eligible 16 and 17-year-olds (previously only compulsory for ages 18–65).

If your children are working, this may be a good opportunity to discuss joining KiwiSaver to access employer and government contributions.


Practical Things to Consider Ahead of the Change

Budgeting

When planning for the new financial year, factor in the minimum wage and KiwiSaver increases when calculating your wage and salary costs.


Communicating with employees.

We recommend advising employees of the KiwiSaver changes ahead of 1 April to reduce questions on payday.

Employees contributing to KiwiSaver will see a lower net pay due to higher deductions unless they apply for a temporary rate reduction.

Temporary rate reductions must be requested by the employee via their MyIR, and the IRD confirmation letter must be provided to the employer.


Payroll System Updates

Payroll software will need to be updated for the above changes. You will need to manage when these changes are processed so they kick in for the correct pay run. 


Xero Payroll

If you are on Xero Payroll, Xero has announced that it will release a bulk update tool in March so you can update employee KiwiSaver contribution rates before the 1 April change. 

Because the updated rates apply to any new pay runs, you'll need to choose the best time to run the update for your business so it takes effect for the first pay run in April.


If you have questions about any of these changes, please reach out to talk to us. 


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