KiwiSaver contribution changes from 1 April 2026 affect payroll costs for employers. If you run a business and have staff, it’s worth checking your payroll settings and thinking about the impact on wages and margins.
What’s changing
- The default KiwiSaver contribution rate increases from 3% to 3.5% for both employees and employers from 1 April 2026.
- The rate will increase again to 4% from 1 April 2028.
- The new rate applies to all pay days from 1 April, even if the pay period started in March.
Other updates employers should know
- Employer contributions will now apply to eligible 16–17-year-old employees from 1 April 2026.
- Employees can apply for a temporary KiwiSaver rate reduction to stay at 3% for 3–12 months.
- If an employee reduces their rate, employers can choose to match the lower rate or still pay 3.5%.
What business owners should do now
- Communicate with your staff and get them to indicate if they will opt for the temporary rate reduction and explain how the changes could impact their take-home pay.
- Update payroll systems to 3.5% employer contributions from 1 April.
- Be ready to process employees with approved temporary rate reductions.
- Decide your policy on matching reduced employee rates.
- Factor the higher contribution into staff cost forecasts and pricing.
For service businesses where wages are a large expense, small changes add up. The 0.5% increase raises total employment costs.
Tip for planning
- List all employee roles and current salaries
- Add expected wage increases over the next few years
- Include the KiwiSaver employer rate increases
- Work out the extra annual cost
- Adjust pricing or revenue targets to cover it
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