Changes to KiwiSaver 2026

Written By Alicia Morley

KiwiSaver Changes — What Employers Need to Know

Major changes to KiwiSaver were announced in Budget 2025, with several updates already in effect and more changes rolling out over the next few years.

Changes Now in Effect From April 2026

Default Contribution Rate Increase

From 1 April 2026:

  • Default employee KiwiSaver contributions increased from 3% to 3.5%

  • Employer contributions also increased from 3% to 3.5%

These rates now apply to all relevant pay runs and payroll systems should already reflect the updated percentages.

If an employee already contributes more than 3%, their employee contribution rate remains unchanged. However, employers previously contributing 3% should now be contributing 3.5%.

KiwiSaver Contributions for Employees Aged 16–17

Employers are now required to make KiwiSaver employer contributions for eligible 16 and 17-year-old employees who are KiwiSaver members.

For existing KiwiSaver members, these contributions should now already be active automatically.

This may increase payroll costs for businesses employing younger workers.

Temporary Rate Reduction Option

Employees wanting to temporarily remain contributing at 3% can apply for a temporary rate reduction.

Key points:

  • Reductions can apply for between 3 and 12 months

  • Employees automatically return to the default contribution rate after 12 months

  • Employees can apply multiple times if required

  • Employers may choose whether to match the reduced contribution rate

Employers should ensure any temporary rate reduction notices received from employees are being processed correctly through payroll.

Changes Coming in April 2028

From April 2028:

  • Default employee KiwiSaver contribution rates will increase again from 3.5% to 4%

  • Employer contribution rates will also rise to 4%

What Employers Should Be Reviewing Now

These KiwiSaver changes may have a noticeable impact on payroll costs and business cashflow over time.

Businesses should ensure:

  • Payroll software has been updated correctly

  • Default KiwiSaver contribution rates are now set at 3.5%

  • Employer contributions for eligible 16 and 17-year-old employees are being processed

  • Temporary contribution reduction requests are being handled correctly

  • Payroll budgets and cashflow forecasts reflect the increased contribution costs

Ensuring your systems are updated correctly now will help avoid payroll errors and potential compliance issues later.

If you would like help reviewing your payroll setup or understanding how these KiwiSaver changes affect your business, please contact the Hunter Withers team.

Alicia Morley
Next

Client Spotlight: Sono Suite