KiwiSaver changes – important update for employers and employees

The Government has confirmed several KiwiSaver changes coming into effect between 1 July 2025, 1 April 2026, and 1 April 2028. These updates will impact payroll, employment costs, and employee take-home pay.

From 1 July 2025

• The Government KiwiSaver contribution has reduced from 50 cents to 25 cents per dollar contributed, lowering the maximum annual contribution from $521.43 to $260.72.
• Employees must still contribute at least $1,042.86 per year to receive the full government contribution.
• 16 and 17-year-olds are now eligible for the government contribution if they meet eligibility criteria.
• Employees earning over $180,000 per year are no longer eligible.
• There is no change to contributions for the year ending 30 June 2025. These will be paid in July and August 2025 at the previous rate.

From 1 April 2026

• Default employee and employer contribution rates will increase from 3% to 3.5%, with a further rise to 4% planned for April 2028.
• Employees may see a small reduction in take-home pay, while employers should plan for higher compulsory contribution costs.
• Employees can apply from 1 February 2026 for a temporary rate reduction to remain at 3% for 3 to 12 months. Applications can be made multiple times.
• During a temporary rate reduction, employers may also choose to match the reduced rate.
• From this date, 16 and 17-year-old employees will become eligible for employer KiwiSaver contributions, where previously this applied only to employees aged 18 to 65.

We recommend employers review payroll systems, employment agreements, and workforce budgets ahead of these changes.

For more detailed information, click the link below from Inland Revenue:
https://www.ird.govt.nz/kiwisaver-changes