The government has introduced several changes to the KiwiSaver scheme which have been coming into effect incrementally since 1 July 2025. The latest change will occur on 1 April 2026. If you haven’t already taken steps to implement these changes, here’s what you need to know:
- On 1 April this year, the default KiwiSaver contribution rate will rise from 3% to 3.5% for both employees and employers. This will affect all pay days after this date, so if you have a pay period that covers time from before and after 1 April, the new deductions rate will apply to the whole pay for that period.
- Employees can apply to IRD for a temporary rate reduction if they would like to keep contributing to their KiwiSaver at the pre-1 April rate. If an employee’s application is accepted, they will receive a letter from IRD which they should show to their employer as evidence of the applicable rate. Employees can apply for a period of 3 to 12 months, and can apply for this reduction an unlimited number of times. An employer can choose to match the temporary reduced rate.
- From 1 April 2026, employers will be required to contribute to KiwiSaver for employees who are 16 and 17. The employees must also meet all other eligibility requirements.
It’s important to note that this is not the last change to the KiwiSaver scheme we will be seeing. The default KiwiSaver contribution rate will rise again on 1 April 2028 to 4%. If you have any questions about these changes, please get in touch with the Employment Law Team or your usual contact at Hesketh Henry.
Disclaimer: The information contained here is of a general nature and should be used as a guide only. It is not a substitute for obtaining legal advice. Any reference to law and legislation is to New Zealand law and legislation.
