Budget 2025 - Update
As part of the recent Budget 2025, the Government announced changes that may affect your business.
Investment Boost – 20% deduction for new business assets
The Government has passed legislation introducing Investment Boost. Investment Boost is a scheme that allows businesses to claim 20% deductions for the costs of new assets. Assets need to be previously unused in New Zealand (either brand new or new to New Zealand).
Eligible assets include all depreciable property. They also include several assets that are allowed depreciation-like deductions and improvements to depreciable property. Common examples include new commercial and industrial buildings, machinery, equipment and work vehicles. Residential buildings and fixed-life intangible property (such as a copyright, trademark or rights to use land) are not eligible for Investment Boost.
Businesses will be able to claim deductions for new assets acquired on or after 22 May 2025 in their income tax returns for the relevant income year.
Changes to KiwiSaver contribution rates and minimum age
From 1 April 2026, the default employer and employee KiwiSaver contribution rates will rise from the current 3% of salary and wages to 3.5%. On 1 April 2028, these will rise again to 4%.
Employees will be able to temporarily opt for the 3% rate from 1 April 2026 if they wish. They'll be able to apply for this temporary rate reduction from 1 February 2026.
From 1 July 2025, people aged 16 and 17 will qualify for government KiwiSaver contributions. From 1 April 2026, you'll need to start making employer KiwiSaver contributions for 16 and 17-year-olds who choose to enrol (or are already enrolled) in KiwiSaver.
From 1 July 2025, the Government will halve its government KiwiSaver contribution from 50 cents to 25 cents for each dollar a member contributes to KiwiSaver each year, up to a maximum of $260.72. From 1 July 2025, people with an annual taxable income of more than $180,000 will no longer receive the government KiwiSaver contribution.
If you have any questions about asset purchases or Kiwisaver and payroll, please contact your accountant to discuss.