KiwiSaver in NZ: What Comes Out of Your Pay, and What Goes In

KiwiSaver is a long-term savings account, mainly for retirement and, for plenty of people, a first home deposit. Money goes in from up to three places: you, your employer and, if you qualify, the government. Here’s what that looks like for 2026/27, and what each choice does to your pay.

The default contribution rate is now 3.5% of your gross pay, and your employer pays at least 3.5% on top. The government adds 25 cents for every dollar you put in, up to $260.72 a year, unless you earn more than $180,000 of taxable income. The money is locked in until you’re 65, apart from a few exceptions such as buying your first home.

3.5% default rate

+ 3.5% from your employer

up to $260.72 from government

Where your KiwiSaver money comes from?

Take someone on $60,000 a year, using the default rate. In one year:

You put in $2,100. That’s 3.5% of your pay, taken out each payday.
Your employer puts in $2,100. Same 3.5%, paid on top of your salary. (They pay tax on this before it reaches your account, so the amount that actually lands is a bit less.)
The government adds $260.72. That’s the most it will pay in a year.

You $2,100 3.5% of your pay, taken out each payday

Your employer $2,100 3.5%, paid on top of your salary

Government $260.72 25 cents per $1, the yearly maximum

Total going into your account in a year: $4,460.72 on a $60,000 salary, before employer tax

Your own money is only about half of it. That’s why most people don’t skip the employer part.

What’s changing, and when?

1 July 2025	The government contribution became 25 cents for every dollar you put in, up to $260.72 a year. If your taxable income is more than $180,000, you don’t get it. People aged 16 and 17 can now get it too.
1 April 2026	The default rate went from 3% to 3.5%, for you and for your employer. If you were already on the default rate, it rose automatically and you didn’t have to do anything. If you were already paying more than 3%, your own rate stays the same, but your employer’s goes up to 3.5%. Employees aged 16 and 17 now qualify for employer contributions, too.
1 April 2028	The default rate rises again, to 4%.

What each rate costs you

You can choose 3%, 3.5%, 4%, 6%, 8% or 10% of your gross pay. KiwiSaver comes out of your pay after PAYE, so every dollar you contribute lowers your take-home pay by a dollar. On a $60,000 salary:

3%$34.62 a week$1,800 a year

3.5%$40.38 a week$2,100 a yeardefault

4%$46.15 a week$2,400 a year

6%$69.23 a week$3,600 a year

8%$92.31 a week$4,800 a year

10%$115.38 a week$6,000 a year

Based on a $60,000 salary. Your take-home pay falls by the weekly amount shown.

The jump from 3.5% to 6% costs about $28.85 a week more. That’s the number to think about, not the percentage.

Want to see your own figures? Our [Salary Calculator] shows KiwiSaver as its own line.

Which option fits you?

Stay on the default (3.5%)

The simplest choice. You get your employer's full contribution, and you don't have to do anything.

Watch out for: the default rate rises to 4% in April 2028.

Go higher (4% to 10%)

More of your pay goes into savings.

Watch out for: your employer's minimum stays at the default, so extra from you isn't matched.

Take a temporary 3%

If the default is stretching your budget, you can apply for a temporary rate reduction. It lasts 3 to 12 months, then goes back to the default.

Watch out for: your employer can choose to match the lower rate, so ask them first.

Take a break

After 12 months in KiwiSaver you can apply to pause your own contributions.

Watch out for: your employer's contributions stop too, and you miss the government top-up if you put nothing in.

The government top-up: about $20 a week

Government top-up

To get the full $260.72, you need to put in about $1,043 over the KiwiSaver year (1 July to 30 June). That's roughly $20 a week.

On a $30,000 salary at 3.5% you put in $1,050 a year, which clears it. On $60,000 you're well past it, so you get the full amount without thinking about it.

Putting in more than that doesn't earn extra from the government. If you're close, though, it's free money.

How KiwiSaver works day to day?

Your employer takes your contribution out of each pay and adds their own.
If you qualify, the government pays its contribution after the year ends on 30 June.
Your provider invests the money, and you can see the balance in your online account.

If you start a new job and you aren’t in KiwiSaver already, you’re usually enrolled automatically. You can opt out within a short window, normally between 2 and 8 weeks after you start.

Can you take your money out?

✓

Buying your first home Usually after you've been in KiwiSaver for at least 3 years.

✓

Significant financial hardship You'll need to show you can't cover your basic living costs.

✓

Serious illness Your provider will ask for medical evidence.

✓

Permanent emigration Usually when you move permanently overseas. Australia has its own rules.

✓

Death The balance goes to your estate.

Each of these has its own conditions. Check with your KiwiSaver provider or IRD before you apply.

How to change your rate?

Tell your employer Say which rate you want, using the KiwiSaver deduction form (KS2) or your payroll system.

Check your payslip Your next payslip should show the new percentage.

Special cases: use myIR For a temporary 3% rate or a contributions holiday, apply through myIR on the IRD website.

Frequently asked questions

3.5% for you and 3.5% for your employer, from 1 April 2026. It rises to 4% on 1 April 2028.

No. But if you start a new job and you aren’t a member, you’ll usually be enrolled, and you have to opt out if you don’t want it.

The contribution is calculated on your gross pay but comes out after PAYE, so it lowers your take-home pay.

25 cents for every dollar you put in, up to $260.72 a year. You don’t get it if your taxable income is more than $180,000.

Yes. Your employer’s contribution stays at the default, but you can choose a higher rate for yourself.

Yes. From 1 April 2026 you qualify for employer contributions of 3.5%, and you can get the government contribution as well, if you meet the other conditions.

The reduction is something you apply for, and your employer can choose whether to match it. Check with them before you apply.

Related calculators and guides

Sources

Inland Revenue: KiwiSaver changes (ird.govt.nz). Retirement Commission (retirement.govt.nz). Last checked: 20/10/2026.

Disclaimer

This page is general information, not financial or tax advice. KiwiSaver rules can change. Check ird.govt.nz and your KiwiSaver provider before you make a decision.