KiwiSaver 3.5% Change From 1 April 2026
From 1 April 2026 the default KiwiSaver rate for employees and matching employers is 3.5%, up from 3%. If you were on the old default, payroll should already be deducting 3.5% from each pay, and your employer should be paying 3.5% as well.
You do not need to fill in a new form for that lift. The next step is 4% from 1 April 2028. If 3.5% is too tight this year, the official path is a temporary 3% reduction in myIR, not a guess on the KS2.
Does the 3.5% default apply to you?
On the old 3% default
Both sides move to 3.5%
Inland Revenue: if you were contributing at the default rate of 3%, your deduction and your employer’s matching contribution rise to 3.5% automatically. You do not need to do anything unless you apply for a temporary rate reduction.
Already on 4%, 6%, 8% or 10%
Your rate stays put
If you were already contributing more than 3%, your own rate does not change. If your employer was still contributing 3%, that employer rate still rises to 3.5%.
Need to stay at 3%
Apply for a reduction
A temporary rate reduction in myIR holds your employee deduction at 3% for 3 to 12 months. Your employer must drop your deduction to 3% once they have the notice. Matching 3% on the employer side is their choice, not automatic.
What changed from 1 April 2026?
Inland Revenue’s KiwiSaver changes page sets the default employee deduction and matching employer contribution at 3.5% from 1 April 2026, then 4% from 1 April 2028. Budget 2025 staged that lift from 3% to 4% in two steps. Joining, KS2 choices, ESCT, and withdrawals sit on the KiwiSaver hub. This page stays on the rate change itself.
Inland Revenue also moved the clock to the pay day, not the pay period. The new rate applies to all pay days from 1 April. If a pay period covers days in March and April, the whole contribution for that pay is deducted at 3.5% (unless a valid temporary reduction notice is on file).
1 July 2025
Government contribution is 25 cents in the dollar, maximum $260.72 a year, if taxable income is $180,000 or less.
1 February 2026
Temporary 3% reduction applications opened in myIR, to take effect from the first pay day on or after 1 April 2026.
1 April 2026
Default 3.5% for employee and employer. Eligible 16 and 17 year old members start getting employer contributions.
1 April 2028
Default rises again to 4% for you and your employer, from 3.5%.
Which KS2 rates can payroll use now?
Inland Revenue’s employee contributions page lists the KS2 rates as 3.5%, 4%, 6%, 8% or 10% of gross pay. If no rate is chosen, the default is 3.5%. A temporary rate reduction is the only official 3% option on wages. You can change 3.5%, 4%, 6%, 8% or 10% once every 3 months unless your employer agrees to a shorter gap. Amounts above 10% go straight to the scheme provider.
| Who | Rate from 1 April 2026 | What Inland Revenue says |
|---|---|---|
| Employee default (no KS2 choice) | 3.5% | Use 3.5% if the employee does not choose a rate |
| Employee chosen rates | 3.5%, 4%, 6%, 8% or 10% | Told on a KS2, in writing, through the provider, or in myIR |
| Temporary rate reduction | 3% | 3 to 12 months, then back to the default unless you apply again |
| Employer compulsory minimum | 3.5% of gross | Unless the employee is on a temporary reduction and you choose to match 3% |
| Aged 16 or 17, other tests met | Employer 3.5% | Existing members: automatic. New members: join through a provider |
| From 1 April 2028 | Default 4% | Employee and employer default rises again from 3.5% |
Sources: Inland Revenue KiwiSaver deductions from employee pay, employer contributions, and KiwiSaver changes.
Pay day trap, not pay period
Inland Revenue is blunt: the new rate affects all pay days from 1 April. A weekly or fortnightly period that started in March still uses 3.5% for the whole contribution if the pay day is on or after 1 April. Do not split one pay across 3% and 3.5%.
What does 3.5% look like on one pay?
The lift from 3% to 3.5% is extra employee deduction on that pay’s gross KiwiSaver pay. Inland Revenue taxes the employer 3.5% as employer superannuation contribution tax (ESCT), so the amount that lands in the scheme can be less than 3.5% of gross. To see PAYE, ACC, and the employee KiwiSaver line together, run a wage through the PAYE calculator.
Labelled example: $1,000 gross pay
Old default 3% employee deduction: $1,000 × 3% = $30.00
New default 3.5% employee deduction: $1,000 × 3.5% = $35.00
Employer compulsory 3.5% before ESCT: $1,000 × 3.5% = $35.00. Inland Revenue: you may get less than 3.5% paid into the account after ESCT.
This $1,000 figure is a labelled example applying Inland Revenue’s published percentages. It is not an Inland Revenue worked example.
How do I stay at 3%?
Apply in myIR for a temporary rate reduction if you want your wage deduction held at 3%. Inland Revenue opened those applications from 1 February 2026, and a reduction could not take effect before the first pay day on or after 1 April 2026. You can now apply at any time, including back to back. The reduction lasts 3 months to a year. After 12 months your contributions reset to the default unless you apply again.
Inland Revenue sends an acceptance letter with start and end dates. Show it to your employer, or ask Inland Revenue to notify them. If you have more than one employer, you choose which of them to give the notice to. You cannot apply for a temporary rate reduction if you have a savings suspension. You can revoke the reduction early by talking to your employer. If you want it again with the same employer, you reapply. Inland Revenue writes within 30 days of the end date. If you do not apply again, Inland Revenue asks the employer to start 3.5% deductions again. A new KS2 that picks 3.5%, 4%, 6%, 8% or 10% ends the reduction for that employer.
Temporary rate reduction
You keep contributing, at 3%.
Employer must deduct 3% from your pay once they have the notice.
Employer may keep paying 3.5% or choose to match 3%. When you move back up, they must lift compulsory employer contributions to at least 3.5%.
Savings suspension
Wage deductions stop.
Compulsory employer contributions stop unless your employment agreement says otherwise.
After 12 months as a contributing member you can suspend for 3 months to 1 year with no reason. You cannot hold a suspension and a temporary reduction at the same time.
A savings suspension is not a way to cash the employer 3.5% as extra wages. Inland Revenue: while you are on a suspension you will not get employer contributions unless the employment agreement says otherwise. Whether a total remuneration package already folds employer KiwiSaver into the quoted salary is a contract question. Inland Revenue still says take home pay should not be less because of compulsory employer contributions, and employees must be paid at least the minimum wage excluding any compulsory employer contribution component.
Pull highlight: Inland Revenue’s January 2026 update: a temporary rate reduction can only take effect from 1 April 2026, even if the employer already had the notice. From that date, the clock is the pay day.
Do 16 and 17 year olds get employer KiwiSaver now?
Yes, from 1 April 2026, if they meet the other eligibility requirements. Inland Revenue: existing KiwiSaver members aged 16 or 17 get employer contributions of 3.5% of pay automatically. You do not need to do anything. Employers also make contributions for 16 and 17 year old employees who join through a provider. Government contributions for 16 and 17 year olds (with the other tests) were already in force before this payroll change.
Inland Revenue still lists under 16 as a case where the employer does not have to contribute, unless the employer chooses a voluntary contribution.
What do employers need to do in payroll?
Update payroll so the default employee and employer rates are 3.5%. Process temporary rate reduction letters. Start compulsory employer contributions for existing 16 and 17 year old members, and for those who join through a provider. File the employee deduction, the employer contribution, and ESCT with employment information. Business.govt.nz KiwiSaver puts those amounts through payday filing to Inland Revenue, which then forwards them to the provider. The filing dates for a small employer sit on payday filing for small employers.
Business.govt.nz: the 3.5% employer amount must sit on top of salary and wages, including bonuses, commission, extra salary gratuity, overtime, and most other before tax payments. Keep the KS2 or reduction letter on file. You do not send it to Inland Revenue. Apply a rate change from the employee’s next pay.
Employment New Zealand sets the adult minimum wage from 1 April 2026 at $23.95 an hour. Employers must pay any employer superannuation contribution, such as KiwiSaver, on top of at least that minimum wage. The compulsory employer contribution cannot be counted as part of the minimum wage rate.
Use case: Tauranga cafe Ltd
Situation: a labelled example. Weekly payday on a Wednesday. One barista on the old 3% default, one on 6%, and one 17 year old weekend worker who already joined KiwiSaver through a provider. KiwiSaver: from the first pay day on or after 1 April 2026 the 3% barista moves to 3.5% employee and 3.5% employer. The 6% barista stays at 6% employee, and employer still moves to 3.5% if it was 3%. The 17 year old now gets employer 3.5% if the other tests are met. Action: check the payday, not the week that started in March. If someone wants 3%, they apply in myIR and hand over the letter. Do not treat a verbal “leave me at 3%” as a KS2 rate.
Does the 3.5% default apply if I am self employed?
No. The 3.5%, 4%, 6%, 8% and 10% list is the employee payroll menu. Inland Revenue: if you are self employed, a contractor, not working, or receiving a benefit, the amount and timing sit in the contract with your scheme provider. You can pay the provider directly, or use Pay tax in internet banking and select KiwiSaver. There is no compulsory employer match on that income. If you later start a job on salary or wages, tell the employer you are in KiwiSaver and then choose 3.5%, 4%, 6%, 8% or 10%. Guide KS12 (April 2026) is Inland Revenue’s self employed pack.
Government contribution did not wait for 3.5%
From 1 July 2025 the government contributes 25 cents for each dollar of your own money, up to $260.72. To get the maximum you must put in at least $1,042.86 between 1 July and 30 June. Employer money, past government money, and Australian transfers do not count. Taxable income must be $180,000 or less, and you must be aged 16 to 65. Inland Revenue’s example on the government contribution page: contribute $50 and you get $12.50.
What people get stuck on
Threads on r/newzealand and r/PersonalFinanceNZ keep mixing three different brakes: a temporary 3% reduction, a savings suspension, and opting out of KiwiSaver. A reduction keeps you in, at 3%. A suspension stops wage deductions and usually stops the employer money. Inland Revenue will not let you hold a reduction and a suspension together. Opt out is a separate enrolment rule, not a contribution rate tool.
Geekzone payslip threads still ask why the employer KiwiSaver line in the scheme is smaller than the employee line. Inland Revenue’s benefits page is the official reason: the employer must pay tax on their 3.5% contribution, so you may get less than 3.5% paid into your account. That tax is ESCT. Employee deductions are not ESCT.
A third mix up is “pay period” versus “pay day”. Inland Revenue’s own LinkedIn note used the first pay on or after 1 April. Comments that say the whole March week stays at 3% because the period started before 1 April do not match the KiwiSaver changes page.
Frequently asked questions
Does the KiwiSaver 3.5% change apply if I already contribute more than 3%?
Your chosen employee rate stays the same if it is already above 3%. Inland Revenue still lifts the employer contribution to 3.5% if the employer was contributing 3%.
Can I keep contributing 3% after 1 April 2026?
Yes. Apply in myIR for a temporary rate reduction of 3% for 3 to 12 months, then show the Inland Revenue letter to your employer. You cannot apply if you already have a savings suspension.
Does the new KiwiSaver rate use the pay day or the pay period?
The pay day. Inland Revenue applies 3.5% to all pay days from 1 April 2026. If a pay period covers days before and after 1 April, the whole contribution for that pay is deducted at the new rate.
Do 16 and 17 year olds get employer KiwiSaver from 1 April 2026?
Yes, if they meet the other eligibility requirements. Inland Revenue: existing KiwiSaver members aged 16 or 17 get employer contributions of 3.5% of pay from 1 April 2026 automatically. Employers also contribute for 16 and 17 year olds who join through a provider.