11 Jun 2025

Kiwisaver increases coming

The Government has announced changes to the Kiwisaver scheme on 1st April 2026, and again in 2028.  The current requirement is that any eligible employee (who has not opted out) contributes at least 3% of their pay to Kiwisaver, and they also receive at least a 3% employer contribution.

From 1st April 2026 the minimum rate for both employee and employer contributions will be 3.5% unless the employee specifically requests that it stays at 3%.  In 2028 the standard minimum rate will be 4% for both employee and employer contributions.

There are several factors for employers to consider.

1. The employer contribution might currently be included in the wage / salary rate, or in addition to the wage / salary rate for each employee, and there might be some variety within your team depending on what is stated in their employment agreement.  It will be important to help your employees understand what the impact of the change will be for each individual.
2. Will you budget for a pay increase for all employees that incorporates the kiwisaver change, or are you intending that the impact is entirely covered by a reduction in the take-home pay for the employee?  Consider this carefully, read your employment agreements, and carefully communicate with your team.  The option which is least detrimental to employees is to plan pay increases of at least 1% on 1st April 2026.  If you decide on a 1% increase, you will need to communicate to the team that this will address the Kiwisaver change only, so they will get no increase in their take home pay, but will benefit in the longer term.
3. Each employee can accept the Kiwisaver contribution increase, or request to stay at 3%, or opt out of Kiwisaver entirely.  You will need to plan when and how you will communicate with employees, and get their response confirmed in writing if they do not accept the standard increase to 3.5%.  Give yourself plenty of time for this, don’t start it on 25th March!
4. Will your payroll system be able to handle the changes?  There is a good lead time for the major providers to set this up, so hopefully you will receive confirmation of your system’s capability well ahead of 1st April.  It is likely that you will need to ensure the correct information is entered for every employee