2026 KiwiSaver Changes: Update
As we welcome in the new year and look forward to what this year is to bring, we wish to remind employers of the KiwiSaver contribution changes coming into force this year. We cast our minds to a previous blog article and the discussion we had around the changing KiwiSaver contribution rates that are to be rolled out into effect in 2026.
The government has introduced key changes to KiwiSaver with the intention of enhancing the schemes long-term sustainability and better support New Zealanders in building savings for retirement or their first home. These updates impact contribution rates for employers, employees, and the government, while also extending eligibility to include younger workers.
What’s Happening to the Employer and Employee Contribution Rates in 2026?
Currently, both employers and employees contribute a default rate of 3% of the employee’s salary or wages to KiwiSaver. This rate is set to increase in two stages – first rising to 3.5% on 1 April 2026, and then to 4% on 1 April 2028.
To ease everyone into the process, employees have the option to temporarily “opt down” to the current 3% rate for 12 months after the first increase this coming April. Employers will match their lower rate during that time.
The changes are expected to enhance financial security in retirement, encourage stronger saving habits, and help young people get into their first homes sooner.
What’s Changing with the Government’s Contribution?
As of 1 July 2025, the government’s annual contribution has been cut in half. Previously, the government contributed 50 cents for every dollar you put into your KiwiSaver in the financial year (up to $521.43 per year). This has now dropped to 25 cents per dollar, with a new maximum government contribution into your KiwiSaver of $260.72 per year beginning in 2026.
You will still need to contribute at least $1,042.86 each year to your KiwiSaver to be eligible for the government top-up.
Further changes we will see in effect in 2026 include the government introducing an eligibility cap to KiwiSaver contributions. As of 1 July 2025, if your income is over $180,000, you will no longer be eligible for the government’s KiwiSaver contribution. This determination will be based on one of your two most recent tax returns.
Changes Concerning Youth
This year, 16- and 17-year-olds will now be eligible to receive the government’s $260.72 contribution if they contribute the contribution threshold of $1,042.86 per annum. From April 2026 employers will now also be required to make KiwiSaver contributions, being at minimum the default rate, for their 16 and 17 year old employees.
For those employees who already have the employer contribution prescribed in their employment agreement, there will be no changes.
What Does This Mean for You in 2026?
From 1 April 2026, employers and employees must note the default contribution rate for both parties will be increasing to 3.5% from previous 3%.
These changes are said to be all about encouraging Kiwis to build stronger savings habits, while keeping the scheme affordable for the country. By accelerating savings growth, the government aims to strengthen both personal financial futures and the broader economy.
If you’re concerned about how these changes may impact you – whether as an employer or employee – or you’re unsure on how to navigate them, our experienced employment team is here to help. With extensive combined expertise in employment law, Brad and Sally will ensure your interests are protected, giving you peace of mind throughout the process.
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