Changes to KiwiSaver: how to get your business ready
- Feb 26
- 2 min read
Major changes to KiwiSaver were announced in Budget 2025.
The KiwiSaver voluntary savings scheme is aimed at helping New Zealand workers save for retirement, or buy a first house. But with the rising cost of living, action was needed to make KiwiSaver fit for purpose and more fiscally sustainable as a savings scheme.
How will these changes affect your employees and your small business?
Let’s take a look at the details of these KiwiSaver changes.
Changes affecting your employees
To begin, let's detail how the initial changes announced in Budget 2025 will impact your employees and other Kiwi workers:
From 1 July 2025:
Younger workers will qualify for government contributions: People aged 16 and 17 will qualify for government contributions, so long as they meet other eligibility requirements. Prior to 1 July 2025, members must be 18 or older to qualify.
Government contributions to be reduced by half: The government KiwiSaver contribution will decrease, lowering the maximum annual government contribution from $521.43 to $260.72.
High earners to lose government contributions: People who earn more than $180,000 of taxable income in a year will no longer qualify for government contributions.
Government contributions for the year ending 30 June 2025 will remain unchanged. These contributions will be disbursed in July and August at the existing government contribution rate.
Changes affecting your small business
Next, let’s lay out the KiwiSaver changes that will directly affect your business:
From 1 April 2026:
From April 2026, the standard KiwiSaver contribution rates for both employers and employees will increase to 3.5%, up from the current 3%.
Employees can choose to remain contributing at 3%: Employees who are members of the KiwiSaver scheme will be able keep their contributions at the current rate. They can apply for a temporary rate reduction from 1 February 2026, if they want to continue contributing at 3% from 1 April 2026.
As an employer, you have the option to match your employee's temporary rate reduction. When your employee shifts to a higher contribution rate, you must adjust your employer contributions to the standard 3.5% rate. Inland Revenue will inform you of this update.
Younger workers will be eligible for KiwiSaver contributions: Individuals aged 16 and 17 will be entitled to employer contributions. If they contribute to KiwiSaver from their wages, you will be required to begin making employer contributions.
From 1 April 2028, the default contribution rates for employers and employees will rise again to 4% (up from 3.5%).
Getting ready for the KiwiSaver changes
These amendments to KiwiSaver could have a significant impact for your small business.
Increased employer contributions will increase your payroll costs and stretch your cashflow, as will making contributions for younger workers in the 16 to 17-year-old age bracket.
You'll also need to update your payroll software and processes, to ensure you’re making the correct contributions for the right people, at the right rates.
Come and talk to the team about preparing for the KiwiSaver changes
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