KiwiSaver contribution rates are changing, and while the increase is small, it’s something every employer needs to be ready for.

From 1 April 2026, the New Zealand Government is increasing the default KiwiSaver contribution rates for both employees and employers. Planning ahead now will help avoid payroll issues later.

What’s changing?

From 1 April 2026:

  • Employee default KiwiSaver contributions increase from 3% to 3.5%
  • Employer default KiwiSaver contributions also increase from 3% to 3.5%

These changes apply only to employees on the default KiwiSaver rate. Employees who have chosen higher contribution rates, such as 4%, 6%, 8% or 10%, will not be affected unless they choose to change their rate.

The increase is part of the Government’s plan to gradually boost retirement savings for New Zealanders.

You can read the full details on the Inland Revenue website here: Kiwisaver Changes

Temporary KiwiSaver rate reductions

From 1 February, KiwiSaver members can apply for a temporary contribution rate reduction, allowing them to keep their contributions at 3% for the time being.

If an employee is approved for a temporary reduction, employers can also match that reduced rate.

The temporary reduction can be put in place for anywhere between three months and 12 months. If the employee wants the reduced rate to continue beyond that period, they will need to reapply.

This option may be helpful for employees who are feeling financial pressure and need short-term relief, while still remaining enrolled in KiwiSaver.

What this means for employers

For employers, the change means a slightly higher KiwiSaver cost for employees on the default rate. While a 0.5% increase may seem minor, it can add up across multiple employees and pay runs.

Now is a good time to:

  • Review which employees are on the default KiwiSaver rate
  • Factor the increase into budgets and cashflow forecasts
  • Understand how temporary rate reductions may affect employer contributions
  • Ensure payroll processes are ready well before April 2026

Businesses using Smartly will have these rates updated automatically, or employers can manage the changes directly. For businesses using Xero Payroll, Xero has advised they will provide a bulk update option to help apply the new default rates ahead of the 1 April 2026 change.

Plan ahead

KiwiSaver changes are a regular part of payroll compliance, and staying ahead helps avoid errors and rework. Taking the time now to understand what’s changing, including temporary rate reduction options, will put you in a strong position well before the April deadline.

If you’re unsure how the new KiwiSaver rates apply to your business, or want help reviewing your payroll setup, it’s worth getting advice early.

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