KiwiSaver Contributions in 2026–27: Employee, Employer and Government

KiwiSaver contribution rates in 2026 and later

Budget 2025 announced the increase, and Inland Revenue's 2026–27 payroll specification applies it to paydays on or after 1 April 2026. The same changes extended compulsory employer contributions to members aged 16 and 17 from 1 April 2026.

What your employee contribution is calculated on

Your contribution is a percentage of gross pay before tax. That includes allowances, bonuses, commission, overtime and gratuities. It excludes redundancy pay, board or accommodation benefits, retiring allowances and employee share scheme benefits. There is no tax relief: PAYE is still calculated on your full gross pay, and the contribution comes out of what is left.

On $60,000 a year paid fortnightly, 3.5% is $80.76 a pay and $2,100 a year. The move from 3% to 3.5% cost that employee $300 a year in take-home pay. It also added the same gross amount in employer contributions.

Employer contributions and ESCT

Your employer must pay at least 3.5% of your gross earnings on top of your pay. The exceptions are when you are not contributing from pay, you are under 16 or past the age of eligibility, the employer already pays into another eligible scheme for you, or you have a temporary rate reduction. Employers can pay more voluntarily, but a 4% or 6% employee rate does not oblige them to match it.

ESCT is deducted from the employer contribution at a single rate set by your ESCT rate threshold amount. That amount is last year's salary or wages plus last year's gross employer contributions; if you did not work for the employer for the whole previous year, they estimate it for the current year. The rate is then fixed for the tax year. For the $60,000 earner with the same pay last year: 3.5% is $2,100, the threshold is about $62,100, so ESCT is 17.5%, or $368. That leaves $1,733 reaching the account.

What goes into your account each year (2026–27)

Adding your 3.5%, your employer's 3.5% after ESCT and the government contribution gives the yearly total. The government contribution is capped, so it matters most for lower earners and stops entirely above $180,000.

The government contribution since 1 July 2025

For each KiwiSaver year (1 July to 30 June) the government adds 25 cents per dollar of your own contributions, up to $260.72. To get the maximum you need $1,042.86 of your own money in that year, about $20.06 a week. Employer contributions do not count. You must be 16 to 65 and have annual taxable income of $180,000 or less.

Before 1 July 2025 the rate was 50 cents per dollar (up to $521.43), there was no income limit, and the minimum age was 18. Budget 2025 halved the rate, removed it for incomes over $180,000, and extended it to 16 and 17 year olds. Your provider claims it after 30 June and it usually shows up by the end of July, sometimes as late as the end of August. If you are short, a voluntary payment to your provider or Inland Revenue before 30 June tops it up.

Can't afford 3.5%? Temporary rate reduction

A temporary rate reduction lets you contribute 3% instead of 3.5% for 3 months to a year. Apply through your KiwiSaver panel in myIR, by phone, or by web message. Inland Revenue sends an acceptance letter with start and end dates for you to show your employer. While it applies, your employer can also contribute at 3%. Reductions can run back to back, you can end one early, and Inland Revenue warns you within 30 days of the end date. After that your deductions return to 3.5%. You cannot have a rate reduction while on a savings suspension.

Savings suspension: stopping contributions

After 12 months of membership, any employee can take a savings suspension of 3 months to a year, with no reason needed. Suspensions can be repeated back to back. Your employer's compulsory contributions and ESCT stop too, unless your employment agreement says they continue. To keep the full government contribution, you would need to make voluntary payments.

If you have been a member for under a year, you can only get an early suspension for financial hardship outside your control, with evidence. The default length is 3 months. If you change jobs during a suspension, show the new employer the notice. Without it they must deduct contributions, and you have to ask Inland Revenue for a refund.

Changing your rate and other situations

You can change your rate through your employer, your KiwiSaver provider or myIR.

• Change it by emailing or writing to your employer, giving them a KiwiSaver deduction form (KS2), using "Change KiwiSaver Contribution Rate" in myIR, or asking your provider. Payroll changes from the next pay it calculates.
• Government paid parental leave: contributions stop automatically unless you ask to keep them going in your application. Employer-paid parental leave keeps them going.
• Weekly ACC compensation: send a KS2 to Inland Revenue to have deductions taken from your ACC payments.
• Self-employed or not working: pay your provider or Inland Revenue directly. Aim for at least the government contribution threshold each year.
• Total remuneration packages: compulsory employer contributions must be paid on top of your pay or package. Only if your employment agreement was negotiated to offset them against gross pay do they come out of it, and then your take-home pay is lower.