KiwiSaver Changes in 2026: What You Need to Know
There have been a few important changes to KiwiSaver over the past year. None fundamentally change how KiwiSaver works, but they do affect what comes out of an employee's pay, what employers need to contribute and how much support people receive from the Government.
For most employees, the most noticeable change arrived on 1 April 2026, when the standard KiwiSaver contribution rate increased from 3% to 3.5%.
The minimum compulsory employer contribution also increased to 3.5%.
If you were already contributing at 4%, 6%, 8% or 10%, nothing changed. For people on the standard rate, slightly more is now going into KiwiSaver from each pay.
There is some flexibility if the additional cost is difficult. Employees can apply for a temporary reduction back to 3% for between three and 12 months. An employer can also choose to reduce its contribution to 3% while that temporary reduction applies.
From 1 April 2028, the standard employee rate and minimum compulsory employer contribution will increase again to 4%.
One point sometimes overlooked is that employer KiwiSaver contributions are subject to employer superannuation contribution tax, or ESCT. So although the employer contribution may be calculated at 3.5%, the amount reaching the employee's KiwiSaver account will generally be lower after tax.
Government contribution has reduced
Since 1 July 2025, the Government has contributed 25 cents for every $1 an eligible KiwiSaver member contributes, down from 50 cents previously.
The maximum annual contribution is now $260.72. To receive the full amount, an eligible member needs to contribute at least $1,042.86 during the KiwiSaver year from 1 July to 30 June.
There is also now an income limit. Anyone with annual taxable income over $180,000 is not entitled to the Government contribution.
For many people the Government top-up is now considerably smaller, but it is still worth making sure you are contributing enough to receive what you are entitled to.
Changes for younger workers
From 1 April 2026, employers generally have to make compulsory KiwiSaver contributions for eligible employees aged 16 and 17. Previously, compulsory employer contributions generally did not start until age 18.
Government contributions are also now available from age 16, subject to the usual eligibility rules.
That can make a meaningful difference over time. An extra two years of employer and Government contributions has a long period to compound before retirement.
What should you do?
It is worth checking what contribution rate you are currently on, particularly if you haven't looked at it for some time. Employers should also make sure their payroll systems are applying the correct rates and that eligible 16 and 17-year-old employees are being treated correctly.
If cash flow is tight, don't simply stop contributing without looking at the alternatives. The temporary 3% rate reduction may be useful, and for eligible members it is still worth understanding how much needs to be contributed to receive the available Government contribution.
KiwiSaver remains a long-term savings scheme, so small changes to contribution rates can become reasonably significant over a number of years.
Disclaimer – While all care has been taken, Johnston Associates Chartered Accountants Ltd and its staff accept no liability for the content of this article; always see your professional advisor before taking any action that you are unsure about.
JOHNSTON ASSOCIATES, Level 1, One Jervois Road, Ponsonby, T: 09 361 6701 www.johnstonassociates.co.nz
