The 1 April 2026 change: 3% to 3.5%
The default employee and employer contribution rate rose from 3% to 3.5% on 1 April 2026. If you were contributing at the default 3%, both numbers changed automatically — nothing to fill in, nothing to apply for. If you were already contributing 4%, 6%, 8% or 10%, your own contribution did not change, but your employer's contribution still rose from 3% to 3.5%.
The change applies to all pay days from 1 April. Even if a pay period straddles 1 April, the whole period is deducted at the new rate.
What it costs and what it builds
| Gross salary | Extra out of your pay (0.5%) | Extra from your employer | Total extra invested |
|---|---|---|---|
| $50,000 | $250 | $250 | $500 |
| $70,000 | $350 | $350 | $700 |
| $100,000 | $500 | $500 | $1,000 |
On a $70,000 salary the 0.5% step is $13.46 a fortnight — and it pulls another $13.46 a fortnight out of your employer. Over 30 years at 5% net, the extra $700 a year alone compounds to roughly $46,000.
If the increase does not fit your budget
IRD offers a temporary rate reduction so you can keep contributing at 3%:
- Apply through myIR; choose a reduction of between 3 and 12 months.
- After 12 months your rate automatically resets to the default 3.5%.
- You can reapply as many times as you like.
- Your employer may choose to match the reduction, but does not have to.
The trade-off: at 3% you contribute $2,100 on a $70,000 salary, well above the $1,042.86 needed for the full government contribution, so the $260.72 is safe. But you give up the employer's extra 0.5% for those months, and each month of 3% instead of 3.5% is about $29 less invested from each side.
16- and 17-year-olds now get employer contributions
From 1 April 2026 employers must contribute 3.5% for 16- and 17-year-old employees who are KiwiSaver members. Existing members do not need to do anything — the employer starts contributing automatically. Combined with the 1 July 2025 change that made 16- and 17-year-olds eligible for the government contribution, turning 16 is now worth roughly 3.5% of your pay plus up to $260.72 a year.
What is still coming on 1 April 2028
The default rate rises again from 3.5% to 4% for both employees and employers. Planning for it now is simple arithmetic: a 4% employee rate on $70,000 is $2,800 a year, or about $53.85 a fortnight. If the 2026 step felt tight, budgeting the extra 0.5% now is far easier than absorbing both at once.
Earlier changes worth remembering
| Date | Change |
|---|---|
| 1 July 2025 | Government contribution halved to 25 cents per dollar, capped at $260.72 (was 50 cents / $521.43). New $180,000 taxable-income cap. Eligibility age lowered to 16. |
| May 2024 | First Home Grant closed to new applicants — the KiwiSaver first-home withdrawal still applies. |
| 1 April 2026 | Default contribution rate 3% → 3.5%; employer contributions for 16-17 year olds. |
| 1 April 2028 | Default contribution rate 3.5% → 4%. |
Deep dive — 2026 update
Take-home pay impact at different salaries
The 0.5% step is small per pay, but it is worth knowing exactly what changed. These figures compare 3% with 3.5% employee contributions (before tax effects):
| Gross salary | Employee at 3% | Employee at 3.5% | Difference per fortnight |
|---|---|---|---|
| $45,000 | $1,350 | $1,575 | $8.65 |
| $60,000 | $1,800 | $2,100 | $11.54 |
| $70,000 | $2,100 | $2,450 | $13.46 |
| $90,000 | $2,700 | $3,150 | $17.31 |
| $120,000 | $3,600 | $4,200 | $23.08 |
The employer side rose by the same amount again — so the total going into your account increased by twice the number in the last column.
Employer checklist for 1 April 2026
- Update payroll settings to a 3.5% default employee rate and 3.5% employer rate.
- Start employer contributions for 16- and 17-year-old members, and enrol them if they are not already members.
- Process any temporary rate reduction letters employees give you, and decide your policy on matching reductions.
- Check ESCT bands are correct for each employee — wrong bands are the most common payroll error and they understate an employee's balance.
- Confirm the new rates apply to all pay days from 1 April, including pay periods that straddle the date.
Changes people confuse with the 2026 rate rise
- The government contribution. It did not change in 2026 — the 25-cent match and $260.72 cap date from 1 July 2025.
- The First Home Grant. Closed to new applicants in May 2024. The KiwiSaver first-home withdrawal (leave $1,000, 3 years' membership) is unaffected and still available.
- Withdrawal age. Still 65. Nothing in the 2025–26 changes moved the withdrawal age.
- The Kāinga Ora First Home Loan. Still available with a 5% deposit for eligible buyers — separate from KiwiSaver.
If you hear that "KiwiSaver is changing", the first question is always: does this change the rate, the government contribution, or the withdrawal rules? Only the rate changed in 2026.