Major changes to KiwiSaver were announced in Budget 2025, and some of them are already in effect as of 1 July 2025. These updates aim to make KiwiSaver more sustainable and better suited to today’s economic environment—especially for younger savers and small businesses.
KiwiSaver is a voluntary savings scheme designed to help New Zealanders save for retirement or buy their first home. With the rising cost of living, the Government has made adjustments to ensure the scheme continues to deliver value.
Here’s a breakdown of what’s changed—and what’s still to come.
What’s Already Changed (From 1 July 2025)
- 16- and 17-year-olds now qualify for government contributions
Previously, only those aged 18+ were eligible. Now, younger members who meet the criteria will receive government contributions. - Government contributions have been halved
The maximum annual government contribution has dropped from $521.43 to $260.72. - High earners no longer qualify
Anyone earning over $180,000 in taxable income per year is no longer eligible for government contributions. - No change for the 2024/25 contribution year
Contributions for the year ending 30 June 2025 will still be paid at the previous rate during July and August.
What’s Coming Next (From 1 April 2026)
- Default contribution rates increase to 3.5%
Both employer and employee default rates will rise from 3% to 3.5%. - Employees can opt to stay at 3%
Employees can apply for a temporary rate reduction from 1 February 2026 to continue contributing at 3%. This can be for 3 to 12 months and can be renewed. - Employers can match the reduced rate
If your employee opts for the lower rate, you can choose to match it. Inland Revenue will notify you when the rate changes back. - Employer contributions for 16- and 17-year-olds
If these younger employees contribute to KiwiSaver, you’ll need to start making employer contributions for them too.
Looking Ahead (From 1 April 2028)
- Default contribution rates rise again to 4%
Both employer and employee rates will increase from 3.5% to 4%.
What This Means for Your Business
These changes will impact your payroll costs and processes. You’ll need to:
- Budget for increased employer contributions.
- Start contributing for younger employees.
- Update your payroll systems to reflect the new rates and eligibility rules.
If you’re unsure how this will affect your business or want help preparing, get in touch with our team. We’re here to help you navigate the changes smoothly.
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