Your KiwiSaver contribution rate determines how much of your gross (before-tax) pay goes into your KiwiSaver account each pay period — and it directly affects how fast your savings grow. From 1 April 2026, the minimum (default) rate rose from 3% to 3.5% for both members and employers, with a further increase to 4% scheduled for 1 April 2028.
Available Contribution Rates in 2026
- 3.5% — Minimum and default rate (since 1 April 2026)
- 4% — Slightly above the minimum; will become the new minimum in 2028
- 6% — Moderate rate
- 8% — High rate
- 10% — Maximum standard rate
The old 3% rate is no longer a standard option. Members who were on the 3% default were moved to 3.5% automatically from their first pay on or after 1 April 2026. If 3.5% would cause financial difficulty, you can apply in myIR for a temporary rate reduction back to 3%, lasting from 92 days up to one year — or apply for a savings suspension.
How It Works
Your contribution is calculated as a percentage of your gross pay (before tax and other deductions). For example, if you earn $60,000 per year and choose a 6% contribution rate:
- Your annual KiwiSaver contribution = $3,600
- Paid fortnightly: ~$138 per pay period
Note: Some employers calculate on gross earnings, some on base salary — check your employment agreement.
How Your Contribution Affects Your Take-Home Pay
| Salary | 3.5% | 4% | 6% | 8% | 10% |
|---|---|---|---|---|---|
| $50,000 | $1,750/yr | $2,000/yr | $3,000/yr | $4,000/yr | $5,000/yr |
| $65,000 | $2,275/yr | $2,600/yr | $3,900/yr | $5,200/yr | $6,500/yr |
| $80,000 | $2,800/yr | $3,200/yr | $4,800/yr | $6,400/yr | $8,000/yr |
| $100,000 | $3,500/yr | $4,000/yr | $6,000/yr | $8,000/yr | $10,000/yr |
Remember that the employer contribution (minimum 3.5% since 1 April 2026) is paid on top of your salary — it is not deducted from your pay.
Changing Your Contribution Rate
You can change your KiwiSaver contribution rate at any time by filing a KiwiSaver deduction form (KS2) with your employer. The change takes effect from your next pay period and there are no penalties for changing your rate.
Which Rate Should You Choose?
- 3.5% — The new minimum: enough to get your full employer match and the government contribution. Best if you're on a tight budget.
- 4–6% — Good middle ground for most people, especially if you're saving for a first home.
- 8–10% — If you want to maximise retirement savings and can afford the lower take-home pay.
Anything above 3.5% is a personal choice — your employer only has to contribute the minimum. But note the Government only matches your contributions up to $1,042.86 per year (a maximum top-up of $260.72), so extra contributions beyond that point are purely for your own retirement growth.
Common Mistakes
- Assuming 3% is still the default — since 1 April 2026 the minimum is 3.5%; staying on 3% requires an approved temporary reduction.
- Not checking your pay slip after the rate change — confirm your employer applied 3.5% (or the rate you chose) from the first pay on or after 1 April 2026.
- Dropping your rate when you don't need to — a temporary reduction to 3% shrinks both your savings and your employer match.
- Ignoring the $1,042.86 threshold — at 3.5% on a low income, you may need a voluntary top-up before 30 June to get the full $260.72 government contribution.
What One Extra Percent Is Worth
Raising your rate by one percentage point on a $70,000 salary adds $700 a year to your KiwiSaver. Invested at a hypothetical 5% average return over 40 years, that extra $700 a year compounds to roughly $85,000 at retirement. Over a full career, the difference between 3.5% and 8% can exceed $300,000 — which is why the rate you choose matters far more than the fund you pick.
Temporary Rate Reduction and Savings Suspension
If the 3.5% minimum is unaffordable, you can apply in myIR for a temporary rate reduction to 3%, lasting from 92 days up to one year — your employer's contribution drops to match. A savings suspension (formerly a contributions holiday) pauses your contributions entirely for up to one year, but your employer must keep contributing if you're a member. Both are safety valves, not free passes: while suspended or reduced, you miss out on employer matching and government contribution growth.
Deep dive — 2026 update
The 2026 step-up in dollars: $70,000 salary
From 1 April 2026 the default employee and employer rate moved from 3% to 3.5%. Here is what that means for someone on $70,000 before tax (figures are before ESCT on the employer side and before tax on the employee side):
| Rate | Your contribution (annual) | Employer (annual) | Combined |
|---|---|---|---|
| 3.0% (temporary rate reduction) | $2,100 | $2,100 | $4,200 |
| 3.5% (default from 1 Apr 2026) | $2,450 | $2,450 | $4,900 |
| 4% | $2,800 | $2,450 | $5,250 |
| 6% | $4,200 | $2,450 | $6,650 |
| 8% | $5,600 | $2,450 | $8,050 |
| 10% | $7,000 | $2,450 | $9,450 |
The extra 0.5% costs $350 a year from your pay and pulls another $350 out of your employer — a 100% return before investment returns even start. On a fortnightly pay cycle the difference is about $13.46 a fortnight.
Temporary rate reduction: how to stay at 3%
If the increase does not fit your budget from 1 April 2026, IRD allows a temporary rate reduction:
- Apply through myIR before or during the period you want reduced.
- Choose a reduction of between 3 and 12 months.
- Your rate resets to the default (3.5%) automatically after 12 months.
- You can apply again as many times as you like — it is not a one-off.
- Your employer may choose to match the reduction back to 3%. Some do, some don't — ask payroll.
Two things to weigh before using it: you drop below the $1,042.86 personal-contribution threshold if you earn under about $34,762, which costs you part of the $260.72 government contribution; and you give up the extra employer match for those months.
How to change your rate
- Log into myIR → KiwiSaver → "Change my contribution rate".
- Choose 3.5%, 4%, 6%, 8% or 10%. You can also set a dollar amount via your provider.
- Allow one or two pay cycles for payroll to pick it up.
Moving up is the cheapest pay rise you will ever give yourself, because the employer match is free money you only get if you contribute.