IRD NEWS
Changes to the KiwiSaver contribution rate
On 1 April 2026 the default KiwiSaver contribution rate will rise to 3.5% for employers and employees. From 1 February 2026, KiwiSaver members will be able to apply for a temporary KiwiSaver rate reduction if they need to. However, this will not take effect until the employees first payday on or after 1 April 2026.
Members may choose to apply for the rate reduction if they’re unable to afford the rate increase or they want to save in other ways.
They will need to show their employer the certificate confirming their KiwiSaver rate reduction.
Rate reductions for employees
Employers must reduce their employee’s KiwiSaver rate if:
the employee provides a certificate indicating the period they have an active rate reduction for
IRD send the employer a letter letting them know their employee has a rate reduction and the period they have it for.
Employers can reduce their contribution to match the employee’s reduced rate once their reduced rate takes effect. However, when an employee moves to a higher contribution rate, the employer must also increase their employer contributions to match the compulsory 3.5% rate, or higher if they choose.
A temporary rate reduction can only take effect from 1 April 2026, even if the employer has received notification about it before this date.
Employers must end the employee’s temporary rate reduction if their employee gives them a KS2 form to change their contribution rate.
If an employee wants to reduce their contribution rate below the minimum again, they’ll need to provide a new certificate. Rate reductions can be applied for as many times as the employee likes.
For information on how to apply for a rate reduction, go the Inland Revenue website ird.govt.nz and search for “temporary KiwiSaver rate reduction.”
As a reminder, here’s a timeline of the KiwiSaver changes that the Government announced in June 2025:
1 July 2025
The Government contribution dropped from 50 cents to 25 cents for each dollar contributed to KiwiSaver each year, dropping the maximum Government contribution from $521.43 to $260.72.
16 and 17 year olds qualified for Government contributions, as long as they met other eligibility requirements
Earners who receive more over $180,000 of taxable income a year, no longer qualify for the Government contribution
1 February 2026
KiwiSaver members can apply for a temporary rate reduction. The reduction can be for a three month (92 days) to 12 month period.
1 April 2026
The default KiwiSaver contribution rate will rise to 3.5% for employers and employees
Employers can choose to match the temporary rate reduction
16 or 17 years old will qualify for employer KiwiSaver contributions as long as they meet other eligibility requirements
1 April 2028
The default KiwiSaver contribution rate will rise again to 4% for employers and employees