Key Takeaways
This guide explains how KiwiSaver works in New Zealand: who can join, how contributions from you, your employer and the government add up, what fees you pay, and when you can access the money. Several rules changed in 2025 and 2026, so it is worth checking your settings against the current position.
- KiwiSaver is a voluntary, work-based savings scheme, and your money is invested in a managed fund rather than held as cash.
- From 1 April 2026 the default employee and employer contribution rate is 3.5%, rising to 4% from 1 April 2028.
- The government contribution is now 25 cents per dollar, up to $260.72 a year, for members earning $180,000 or less.
- Fees come as a percentage of your balance and sometimes a fixed dollar fee, and they are deducted in good and bad years.
- Access is limited to age 65, a first home and a small number of specific situations.
How KiwiSaver works
KiwiSaver is a voluntary savings scheme designed mainly to help New Zealanders save for retirement. You contribute from your pay or directly, eligible employees also receive employer contributions, and eligible members receive a government contribution. The money is invested by a KiwiSaver provider, so its value rises and falls with markets.
Who can join
Most New Zealand citizens and people entitled to live in New Zealand indefinitely, who normally live here, can join. There is no upper age limit for joining, and children can join too, through a parent or guardian. You can join through your employer, directly with a provider, or be automatically enrolled.
Automatic enrolment
If you start a new job and are aged 18 to 64, you are generally enrolled automatically unless you are already a member. You can opt out between the 14th and 56th day of starting work. If you do not choose a provider, Inland Revenue places you with a default provider in a balanced fund.
Who does what
Your employer deducts contributions through payroll and passes them to Inland Revenue, which sends them to your provider. Your provider invests the money and is your main contact for your balance and fund choice. Inland Revenue's KiwiSaver pages explain the administration side, but Inland Revenue does not choose a fund for you or give personal advice.
KiwiSaver contributions explained
Your balance grows from three sources of money plus investment returns, minus fees and tax. The Budget 2025 changes affected all three sources.
| Contribution | Before the changes | Now | Scheduled |
|---|---|---|---|
| Default employee rate | 3% of gross pay | 3.5% from 1 April 2026 | 4% from 1 April 2028 |
| Compulsory employer rate | 3% of gross pay | 3.5% from 1 April 2026 | 4% from 1 April 2028 |
| Government contribution | 50 cents per dollar, up to $521.43 | 25 cents per dollar, up to $260.72 from 1 July 2025 | No change announced |
| Income limit for government contribution | None | Taxable income of $180,000 or less | No change announced |
Employee contributions
Employees contribute a percentage of gross pay. The default rate rose to 3.5% from 1 April 2026, and you can choose a higher rate of 4%, 6%, 8% or 10%. If 3.5% is not affordable right now, you can apply to Inland Revenue for a temporary rate reduction to stay at 3% for 3 to 12 months at a time, and you can apply again when it ends.
Employer contributions
If you are an eligible employee contributing to KiwiSaver, your employer must also contribute at the compulsory rate, now 3.5% of your gross pay. Employer contributions are taxed through employer superannuation contribution tax, so the amount reaching your account is less than the headline rate. If you use a temporary rate reduction, your employer can choose to match the lower rate.
From 1 April 2026, eligible 16 and 17 year old employees who are KiwiSaver members also receive compulsory employer contributions.
Government contribution
Each year from 1 July to 30 June, the government adds 25 cents for every dollar you contribute, up to $260.72. To get the maximum you need to contribute at least $1,042.86 of your own money in that year. You must be aged 16 to 65, mainly live in New Zealand and have taxable income of $180,000 or less. Inland Revenue explains the details on its government contribution page.
Your provider claims the government contribution after 30 June. If you are self-employed, not working or on a low income, a voluntary payment before 30 June can help you reach the $1,042.86 threshold. Our KiwiSaver contributions advice covers rates, voluntary payments and pausing.
Voluntary contributions and savings suspensions
You can make one-off or regular voluntary payments to your provider or through Inland Revenue at any time. If money is tight, a savings suspension lets you stop employee contributions for a period. While you are suspended your employer does not have to contribute, and you may miss out on the government contribution, so set a reminder to restart.
What KiwiSaver costs: fees explained
Every KiwiSaver fund charges fees, and they are deducted from your balance whether markets rise or fall. Over decades, small differences in fees can make a real difference to your final balance.
Types of KiwiSaver fees
- Management fee: a percentage of your balance that covers investing and running the fund.
- Administration or membership fee: a fixed dollar amount some providers charge each year.
- Performance fee: charged by a small number of funds when returns exceed a set target.
- Other costs: such as underlying fund and trading costs, included in the total fund charge.
A fixed dollar fee takes a bigger share of a small balance, while a percentage fee grows as your balance grows. Fees are set out in each fund's product disclosure statement and quarterly fund updates.
Tax on KiwiSaver
KiwiSaver funds are usually portfolio investment entities, so investment income is taxed at your prescribed investor rate (PIR). If your PIR is set too high you pay more tax than you need to, and if it is too low you may have to pay the difference. Check your PIR with your provider, particularly after a change in income.
Comparing fees fairly
Compare fees between funds of the same type, because a growth fund and a conservative fund are designed to behave differently. A lower fee is not automatically good value: ask what you get for the fee, such as the investment approach and service. Our guide to choosing the right KiwiSaver fund type explains how to compare fees, results and providers side by side.
Choosing a KiwiSaver fund
Your fund decides how your money is invested. Most providers offer five broad types, from defensive (mostly cash and bonds) through conservative, balanced and growth to aggressive (mostly shares and property). More growth assets mean more potential long-term growth and bigger short-term swings.
Match the fund to your timeframe
The time until you need the money is the most important factor. Someone saving for retirement decades away can usually ride out more ups and downs than someone planning a first-home withdrawal next year. Your comfort with seeing your balance fall matters too.
Check where you are now
If you were automatically enrolled and never chose a fund, you are likely in a balanced default fund. That may suit you, but it was not chosen with your goals in mind. For examples of how different goals map to fund categories, see KiwiSaver funds for different investor goals.
When you can access your KiwiSaver
KiwiSaver is designed for long-term saving, so access is restricted. The main pathways are listed below, and each has its own conditions and paperwork.
At age 65
You can withdraw your savings once you reach the NZ Super age of eligibility, currently 65. You do not have to withdraw everything at once, and many people leave some savings invested and draw on them over time.
Buying your first home
After at least three years of membership, you may be able to withdraw your savings to buy your first home, provided you intend to live in the property. At least $1,000 must stay in your account. Some previous home owners may also qualify if Kāinga Ora confirms they are in a similar financial position to a first-home buyer. The First Home Grant closed to new applications in May 2024.
Other early withdrawals
- Significant financial hardship: you must show you cannot meet minimum living expenses or similar serious costs, and provide evidence.
- Serious illness: withdrawal may be possible if an illness or injury permanently stops you working or poses a serious risk of death.
- Permanent emigration: one year after moving overseas permanently, to anywhere except Australia. Savings can be transferred to an Australian scheme instead.
- Life-shortening congenital conditions: members with certain conditions may be able to withdraw early.
These pathways reduce money set aside for retirement, so treat them as a serious step and confirm what will remain in your account.
Making the most of KiwiSaver
Getting good value from KiwiSaver is mostly about keeping a few settings in line with your life.
- Check your payslip shows your contribution and your employer's at the current rate.
- Make sure you contribute at least $1,042.86 a year if you are eligible for the full government contribution.
- Confirm your fund type still matches your timeframe.
- Check your PIR and contact details are up to date.
- Consider increasing your rate when your pay rises, if your budget allows.
An annual review is usually enough, with an extra check after a new job, a pay rise, a home purchase plan or as retirement approaches.
How SHARE - The Advisory can help
If the 2026 changes have left you unsure about your contribution rate, fund or first-home plans, an adviser can help you sort through the options. We provide KiwiSaver advice alongside mortgage and insurance advice, so connected decisions can be considered together.
Bring your latest statement and contribution details, and get in touch to arrange a conversation.
Conclusion
KiwiSaver works well when your contribution rate, fund and access plans reflect your real life. With higher default rates from 2026 and a smaller, income-tested government contribution, it is a good time to check that your settings are current.
This article is general information only. Rules can change, so confirm the current position with Inland Revenue or talk to an adviser about your own situation.
Frequently Asked Questions
How much do I have to contribute to KiwiSaver in 2026?
From 1 April 2026 the default employee rate is 3.5% of gross pay, and you can choose 4%, 6%, 8% or 10%. You can apply for a temporary rate reduction to contribute 3% for 3 to 12 months at a time.
How much is the KiwiSaver government contribution?
From 1 July 2025 the government contributes 25 cents for each dollar you put in, up to $260.72 a year. You need to contribute $1,042.86 between 1 July and 30 June to receive the maximum, and your taxable income must be $180,000 or less.
Do 16 and 17 year olds get KiwiSaver contributions?
Yes. Eligible 16 and 17 year olds have received the government contribution since 1 July 2025, and from 1 April 2026 eligible employees in that age group also receive compulsory employer contributions.
Is KiwiSaver the same as a savings account?
No. KiwiSaver money is invested in a managed fund, so its value can rise or fall with markets and fees. It is designed for long-term saving and access is restricted.
Is the First Home Grant still available?
No. The First Home Grant closed to new applications in May 2024. You can still use a KiwiSaver first-home withdrawal if you meet the criteria.
What fees does KiwiSaver charge?
Most funds charge a management fee as a percentage of your balance, and some add a fixed annual administration fee. You can find the total fees in each fund's disclosure documents and compare them on Sorted's Smart Investor tool.