KiwiSaver rises to 3.5%: what it means for your pay

What changed on 1 April 2026

The Taxation (Budget Measures) Act 2025 amended the KiwiSaver Act 2006. From 1 April 2026 the default employee contribution rate, which is also the lowest rate an employee can choose without a temporary reduction, rises from 3 percent to 3.5 percent of before-tax pay. The compulsory employer contribution rises by the same step, to 3.5 percent of gross salary or wages. Inland Revenue applies the new rate to whole pay periods, starting with the first payday on or after 1 April 2026.

If you already chose 4, 6, 8 or 10 percent, your own rate stays where it is, but an employer paying the 3 percent minimum must now pay 3.5 percent. The same Act sets a second step to 4 percent for both sides from 1 April 2028. The calculator applies 3 percent in its 2025/26 year and 3.5 percent in 2026/27. It has no input for a different contribution rate and does not model 2028/29 yet.

What the rise costs you and adds to your account

Employee contributions come out of pay that has already been taxed, so no tax saving softens the increase. Each extra dollar that goes to KiwiSaver is a dollar less in your bank account. Your contribution goes up by $250 a year at $50,000, $350 at $70,000, $450 at $90,000, $600 at $120,000 and $750 at $150,000. KiwiSaver has no earnings cap, so the increase keeps growing with salary.

Your employer pays in the same extra amount, so the money going into your account rises by a full percentage point of salary before tax on the employer’s share. At $150,000 the employer contribution in the calculator rises from $4,500 to $5,250 a year. That is the gross contribution; the section after the table explains why less than that reaches your fund.

How other countries compare

For countries whose calculator models a retirement contribution, the table shows how the contribution setting changes annual take-home pay, as a percentage of take-home pay without that setting. Each country uses its own middle example salary and settings. The last column shows, for every country, the take-home share of this article’s example salary of NZ$71,760 a year, converted into the local currency.

Converted at the exchange rates of 2 October 2026. Each country uses the calculator’s default profile and its latest enacted tax year. Living costs are not compared.

• New Zealand vs Australia
• New Zealand vs Ireland
• New Zealand vs United Kingdom
• New Zealand vs United States

ESCT comes off the employer’s contribution

Employer contributions are taxed through employer superannuation contribution tax (ESCT). Your employer deducts it from the contribution, pays it to Inland Revenue and sends the rest to your KiwiSaver provider. The rate depends on your salary or wages plus gross employer contributions for the previous tax year: 10.5 percent up to $18,720, 17.5 percent up to $64,200, 30 percent up to $93,720, 33 percent up to $216,000 and 39 percent above that. For a new employee, the employer estimates this year’s total instead.

The extra half percent from your employer is therefore worth less than half a percent of salary by the time it reaches your fund. At an ESCT rate of 30 percent, 70 cents of each employer dollar arrives; at 33 percent, 67 cents. The calculator does not deduct ESCT. Its employer columns and employer cost show the gross contribution, which is what the employer pays out in total.

Why last year’s payslip differs by more than KiwiSaver

Comparing a payslip from March 2026 with one from April 2026 mixes in other changes for the new tax year. The ACC earners’ levy rose from 1.67 percent to 1.75 percent of earnings, and the earnings it applies to are now capped at $156,641 instead of $152,790. At $70,000, take-home pay falls by $406: $350 of that is the higher KiwiSaver contribution and $56 is the levy. Income tax rates, the independent earner tax credit and the student loan repayment threshold are the same in both years.

To see the KiwiSaver effect alone, read the two KiwiSaver columns in the table, or open the calculator at your salary and compare the employee contribution in 2025/26 and 2026/27. The difference is always half a percent of gross pay.

Opting down and the government contribution

You can ask Inland Revenue for a temporary rate reduction and keep contributing 3 percent. Applications opened in myIR on 1 February 2026, and a reduction takes effect from your first payday on or after 1 April 2026. It lasts between 3 and 12 months, then your rate returns to the default; you can apply again as often as you like. Your employer may lower its own contribution to 3 percent while the reduction lasts. Members with an active savings suspension cannot use it. The calculator has no rate input and cannot show an opt-down: its 2026/27 figures assume 3.5 percent on both sides.

The government contribution changed from 1 July 2025. It is now 25 cents for each dollar you contribute in a year running from July to June, up to $260.72, where it used to be 50 cents up to $521.43. Members with taxable income above $180,000 receive none. Eligible 16- and 17-year-olds now qualify for it, and from 1 April 2026 employers must contribute for them too. The calculator models take-home pay and employer cost and leaves these changes out, along with your KiwiSaver balance and fund returns.

What to do now

Check your first payslip from April 2026: the KiwiSaver deduction should be 3.5 percent of gross pay unless you chose a higher rate or gave your employer a reduction certificate. If the rise strains your budget, weigh what an opt-down costs as well as what it saves: it keeps half a percent of salary in your pay, and your employer may then cut its contribution by the same amount. Plan for another half-percent step on both sides from 1 April 2028.

Checks for 2026/27

• Compare the KiwiSaver line on an April 2026 payslip with 3.5 percent of your gross pay.
• Use the 2026/27 year in the calculator for this year’s take-home pay and 2025/26 for last year’s.
• Ask your employer which ESCT rate it applies to your employer contributions.
• If you opt down to 3 percent, note when the reduction ends and whether your employer matches the lower rate.

Sources and model coverage

What the estimate covers

The calculator estimates employment income using its supported country rules and selected inputs. Benefits, collective agreements and personal circumstances that are not modelled are excluded. Official rules determine your actual liability.

Official sources

• Inland Revenue – KiwiSaver changes
• Inland Revenue – Changes to the KiwiSaver contribution rate (20 January 2026)
• Inland Revenue Tax Policy – Taxation (Budget Measures) Act 2025: commentary, reforms to KiwiSaver scheme settings
• Inland Revenue – Employee contributions to KiwiSaver
• Inland Revenue – Employer contributions to KiwiSaver and complying funds
• Inland Revenue – IR340 weekly and fortnightly PAYE deduction tables, April 2026 (ESCT rates)
• Inland Revenue – ACC earners’ levy rates