KiwiSaver Changes – What to plan for

The government introduced several KiwiSaver changes with the goal to generate more savings towards first home purchases and long-term retirement. The intent is to nudge kiwis to save more themselves while receiving less direct government support.

What’s already changed?

The default KiwiSaver contribution rate has increased

• From 3% - 3.5% - Starting April 2026

This change applies for both the employee and employer contributions. You may have noticed a slight change in take home pay when the contributions changed over.

There is a temporary rate reduction available for people who want to continue contributing at 3% for a maximum of 12 months, your contribution rate will reset to the default rate after 12 months. Your employees can apply for the rate reduction as many times as they like. They have to provide you with their letter from IR approving for the lower rate, they can't just demand that you deduct at the lower rate.

Government contributions have been reduced from July 2025

• From 50c – 25c per $1 contribution capped at $260.72 per annum

• Annuals earnings over $180,000 per year will no longer be eligible for the government contribution.

Younger kiwis’ contributions

• 16-17 years old are now eligible for the government contribution

• They are also eligible to receive employer contributions from April 2026

What is expected to change between 2026-2028

From April 2028

• Default contribution rates plan to rise to 4% for both employee and employers

What to plan for as an employer

• Rising payroll costs

  • Employer contributions changing from 3% - 3.5% - 4% (2028)

  • Review salaries and pay rises carefully

  • Review hiring processes and employee agreements

• Payroll systems updates & compliance

  • Make sure all employees contribution rates are up to date

  • Opt-down requests are managed & actioned

  • Inclusion of 16-17 years olds for employer contributions

Non-Financial Benefit for your Team

We are aware a number of Financial Advisors in the region provide Advisory sessions for Retirement Saving, that is, they provide an informative education session on how to plan for having enough cash for retirement. This can help destress employees who are planners, but equally who are currently seeing the impact of their parents not having enough funds to live on. If you would like us to give you the names of some of those advisors please reach out.

We can help you:

• Forecast the real cost impacts to be expected over the next 2-3 years

• Review potential remuneration structures for employees

• Build budgets to account for upcoming changes

• Helping you ensure your payroll and compliance stay accurate

Book a free 30-minute consultation with us here.

Disclaimer: The information provided in this article is general in nature and does not constitute personalised tax advice. You should consult with Business Studio before making decisions based on this content