KiwiSaver Employer Contributions 2026-2028: What Employers Need to Know

Inland Revenue’s employer guidance says the lowest compulsory employer contribution is 3.5% of an employee’s gross salary or wages unless that employee is on a temporary rate reduction.

The compulsory contribution generally applies when the employee is aged 16 or over and under 65, belongs to KiwiSaver or a complying fund, has KiwiSaver deductions taken from salary or wages, and is not a member of a defined benefit scheme. Individual circumstances can change the result, so employers should check the current Inland Revenue criteria rather than rely on age or employment status alone.

For an employee already contributing more than 3%, Inland Revenue says the employee rate did not change automatically on 1 April 2026. However, an employer contribution that was 3% generally rose to 3.5%.

Inland Revenue’s KiwiSaver changes page says the default employee and matching employer contribution rates will rise from 3.5% to 4% on 1 April 2028.

Employers should keep the 2028 change in payroll planning and employee communications. Check Inland Revenue again before implementation because later legislation or guidance could change the scheduled settings.

An employee can apply to Inland Revenue for a temporary rate reduction that lowers their contribution rate to 3% for between 3 and 12 months. Inland Revenue issues an acceptance letter showing the start and end dates, which the employee gives to the employer.

The employer can choose to reduce its contribution to 3% for the same temporary period. If the employee does not obtain another reduction, Inland Revenue says deductions return to 3.5% when the temporary period ends.

The reduction is not the same as a savings suspension. Inland Revenue says an employee cannot apply for a temporary rate reduction while they have a savings suspension.

Employer superannuation contribution tax is generally deducted from employer contributions to KiwiSaver and complying funds. Inland Revenue says the applicable ESCT rate depends on how much the employee earns and how long they have worked for the employer.

The gross employer percentage and the net amount credited to the member’s account are therefore not usually the same. Employers should calculate ESCT for each employee using current Inland Revenue guidance or correctly configured payroll software rather than applying one assumed rate across the workforce.

Inland Revenue says employers make compulsory contributions each time they pay salary or wages. Contributions begin from the first relevant pay for employees enrolled by the employer, and from the first pay after notification for employees who opt in.

For total remuneration arrangements, Inland Revenue says an employer contribution must be paid on top of the package if it is not already included. A salary package can include the compulsory employer contribution, but minimum wage must still be met excluding that contribution.

Before each rate change, confirm payroll settings, identify employees with valid temporary-rate notices, check contribution and ESCT treatment, and make the employee communication match the actual payroll configuration.

The annual government contribution is separate from employer contributions. Inland Revenue’s current guidance says an eligible member can receive 25 cents for each dollar they contribute between 1 July and 30 June, up to $260.72.

To receive the full $260.72, the member must contribute at least $1,042.86 of their own money during the KiwiSaver year. Employer contributions do not count toward that amount. Eligibility also includes age and taxable-income conditions, so employers should avoid promising that every employee will receive the maximum.

Employers may make voluntary contributions above the compulsory minimum. Any higher rate should be documented clearly in the employment agreement or benefit policy, costed with ESCT, and described without implying a guaranteed investment or employment outcome.

Employees can choose from the contribution rates available under the current rules. Employers can explain the payroll process and point employees to Inland Revenue or their KiwiSaver provider, but decisions about an employee’s own contribution rate or fund should reflect that person’s circumstances.

Inland Revenue — KiwiSaver changes, updated 19 March 2026, including the 3.5% default employee and employer rates, temporary-rate option and scheduled 4% rate from 1 April 2028.

Inland Revenue — Employer contributions to KiwiSaver schemes and complying funds, including the current compulsory minimum, eligibility criteria, total-remuneration treatment and voluntary contributions.

Inland Revenue — Temporary rate reduction, including the 3-to-12-month period, employee notice and return to the default rate.

Inland Revenue — Getting the KiwiSaver government contribution, including the 25-cent rate, $260.72 maximum and $1,042.86 member-contribution threshold.

Inland Revenue — Employer superannuation contribution tax, including how ESCT applies to employer contributions. Sources accessed 29 July 2026.