KiwiSaver Rules in New Zealand: Contribution Rates, Government Contribution and Withdrawals

KiwiSaver is New Zealand's retirement savings scheme under the KiwiSaver Act 2006. As at 26 October 2026, the default employee contribution rate and the compulsory employer contribution rate are both 3.5% of pay (since 1 April 2026), and the government contributes 25 cents per dollar up to $260.72 a year for members earning $180,000 or less.

This is general information about New Zealand law, not legal advice or financial advice. It does not recommend any KiwiSaver provider, fund or contribution rate. For your situation, check with Inland Revenue or your provider, or consult a lawyer, your local Community Law centre, or a licensed financial adviser.

KiwiSaver rates at a glance (as at 26 October 2026)

What changed in 2025 and 2026

The changes come from the Taxation (Budget Measures) Act 2025, which amended the KiwiSaver Act 2006, the Income Tax Act 2007 and the Tax Administration Act 1994. They were announced in Budget 2025, and Inland Revenue describes the rate rise as happening in two stages.

The default employee rate and the matching compulsory employer rate were 3% before 1 April 2026. They rose to 3.5% on 1 April 2026 and are set to rise to 4% on 1 April 2028. The 4% step is law, but it does not apply until that date.

The government contribution (once called the member tax credit) was halved from 1 July 2025. The matching rate fell from 50 cents to 25 cents per dollar, and the annual maximum fell from $521.43 to $260.72. At the same time, members with taxable income over $180,000 stopped being eligible, and 16 and 17 year olds became eligible.

If you already contribute more than 3%, the April 2026 change did not alter your own rate. Inland Revenue notes that an employer previously contributing 3% had to move to 3.5%.

Who can join KiwiSaver

Inland Revenue says you can join if you are a New Zealand citizen or entitled to live in New Zealand indefinitely, and you live or normally live in New Zealand. People on a temporary, visitor, work or student visa cannot join.

There are extra rules for younger members:

• 16 and 17 year olds can only join through a KiwiSaver provider, not through an employer, and a guardian must co-sign the application.
• Under 16 members also join through a provider, with a guardian's consent.

Self-employed people and others who are not employees join through a provider. Their contribution amount is set by their arrangement with the provider rather than by payroll deductions.

Automatic enrolment when you start a new job

When you start a new job, your employer must automatically enrol you if you are eligible, aged between 18 and 65, in a full-time or permanent part-time role or on a contract of more than 28 days, and not already a KiwiSaver member.

You are not automatically enrolled if, for example, you are under 18 or over 65, you are a casual employee paid holiday pay with your wages, or you are on a contract of 28 days or less. If a short contract is extended, enrolment happens on day 29.

A new member goes into their employer's chosen scheme if it has one, or otherwise into one of the default KiwiSaver providers (Inland Revenue currently refers to 9). For the first 2 months (62 days), Inland Revenue holds new members' contributions before passing them to the scheme provider. You can change scheme at any time by contacting the provider you want to move to.

Opting out

Opting out is only available to people who were automatically enrolled, and only within a set window:

• You cannot opt out in the first 13 days of the job.
• You can opt out from day 14 to day 56 after starting work.
• You need to opt out again each time a new job automatically enrols you.

Inland Revenue allows a late opt-out, up to 3 months after the first contribution, only in listed situations, such as not receiving the KiwiSaver information pack (KS3) within 7 days. If you joined directly through a provider, you cannot opt out at all, but you may be able to take a savings suspension.

Your own contributions and changing your rate

Employees contributing through payroll choose 3.5%, 4%, 6%, 8% or 10% of their pay. If you do not choose, the default is 3.5%. Members who started contributing before 1 April 2009 and never changed their rate stay on a 4% default. You can change your rate once every 3 months, or more often if your employer agrees.

Temporary rate reduction to 3%

Since 1 April 2026, 3% is no longer a standard rate. Instead, a member can apply to Inland Revenue for a temporary rate reduction to 3% lasting from 3 months to a year. Applications could be made from 1 February 2026, and the first reductions took effect from 1 April 2026.

You can apply at any time and take reductions back to back. You cannot have a rate reduction while you are on a savings suspension. When a reduction ends and no new one has been applied for, Inland Revenue asks the employer to restart deductions at 3.5%.

Your employer can choose to match your 3% while you are on a temporary rate reduction, rather than contributing 3.5%.

Employer contributions and ESCT

If you save through your work, your employer must contribute at least 3.5% of your gross (before-tax) salary or wages. Employers do not have to contribute if you are under 16, you are eligible to withdraw your savings (for example, at 65), you are on a savings suspension, or they already pay into another complying superannuation scheme for you.

Employer contributions are subject to employer superannuation contribution tax (ESCT). Because the employer pays tax out of its 3.5%, Inland Revenue notes that less than 3.5% may end up in your account. The ESCT rate depends on the employee's income, so the amount deducted varies from person to person.

From 1 April 2026, 16 and 17 year olds who meet the other eligibility conditions can receive compulsory employer contributions of 3.5%. They still have to join through a provider, because they cannot be automatically enrolled or join through their employer. For related pay rules, see the guides to the minimum wage and annual leave and holiday pay.

The government contribution

For each KiwiSaver year (1 July to 30 June), the government contributes 25 cents for every dollar you contribute, up to $260.72. Contributing $1,042.86 or more in the year earns the full amount. Contributing less still earns 25 cents per dollar, so $50 contributed earns $12.50.

You can receive it if you are aged 16 or over, have a taxable income of $180,000 or under, and either live mainly in New Zealand or fall within a small number of exceptions Inland Revenue lists (such as government employees serving overseas). The amount is pro-rated by the number of days in the year you met the conditions, for example if you joined or turned 16 part-way through.

You stop being eligible for the government contribution once you turn 65. Your provider claims the contribution for you, so you do not need to apply.

Taking a break: savings suspension

Inland Revenue now uses the term savings suspension (also called a savings break) for what used to be known as a contributions holiday.

• After at least 12 months of membership, an employee who has contributed can take a suspension of 3 months to 1 year without giving a reason. There is no limit on how many, and they can be taken back to back.
• Within the first 12 months, a suspension is available only with evidence of financial hardship. It defaults to 3 months and can be up to 1 year.

While you are on a savings suspension, your employer does not have to contribute unless your employment agreement says otherwise.

When you can withdraw your savings

KiwiSaver savings are generally locked in until the age of eligibility, which is currently 65. The main exceptions are set out below, based on the KiwiSaver Act and Inland Revenue's guidance.

First home withdrawals

Kāinga Ora says the property must be one you intend to live in, and a first home withdrawal cannot be used to buy an investment property. Not every fund allows first home withdrawals, so check with your provider.

People who have owned a home before may still be able to withdraw if Kāinga Ora assesses them as being in the same financial position as a first home buyer. That assessment includes a cap on realisable assets, so check the current figures on the Kāinga Ora website rather than relying on older tables.

The First Home Grant is a different scheme. The government closed it with immediate effect on 22 May 2024, with only a narrow exemption that could be considered for people whose pre-approval had expired and who had signed a sale and purchase agreement on or before that date.

Significant financial hardship

Inland Revenue lists significant financial hardship as including being unable to meet minimum living expenses, being unable to pay the mortgage on the home you live in where the lender is seeking to enforce it, needing to modify your home for your own or a dependent family member's special needs, paying for medical treatment, having a serious illness, paying funeral costs for a dependent family member, and palliative care.

You apply through your provider, which asks for evidence. Inland Revenue handles the application only if you are within the first 2 months of membership. An approved hardship withdrawal can be up to your balance less the government contributions, including any $1,000 kickstart, so it can cover your own and your employer's contributions and the investment returns on your account. The scheme's supervisor must be satisfied that other reasonable sources of money have been explored and exhausted, and can limit the amount to what is needed to relieve the hardship.

Moving overseas

The KiwiSaver Act lets a member who has permanently emigrated somewhere other than Australia withdraw their savings no earlier than 1 year after leaving. The application needs a statutory declaration that you have permanently emigrated and proof that you have lived at an overseas address. You can then withdraw your own and your employer's contributions, the $1,000 kickstart if you received it, any fee subsidies, and interest, but not the government contributions or any money transferred in from an Australian scheme. A temporary stay overseas is not enough.

If you move permanently to Australia, you can transfer your savings to an Australian superannuation scheme, though you do not have to. Members can also apply to transfer savings to an approved foreign superannuation scheme.

Other situations

Inland Revenue notes that KiwiSaver savings are protected from creditors while they remain in the scheme if you become bankrupt. KiwiSaver savings may also be relationship property if a relationship ends, which is a question for a lawyer.

If you transferred money into KiwiSaver from a foreign superannuation scheme, a partial withdrawal may be possible to pay tax owed on it or a foreign student loan. On death, the savings become part of the member's estate, so the executor will need to know who the provider is.

For other workplace rules, see the New Zealand employment law guides, including redundancy, or return to the New Zealand laws overview.

Frequently Asked Questions

What is the KiwiSaver contribution rate in 2026?

From 1 April 2026 the default employee rate is 3.5% of pay, and the compulsory employer contribution is at least 3.5% of gross pay. Employees can choose 3.5%, 4%, 6%, 8% or 10%. The default and employer rates are legislated to rise to 4% from 1 April 2028, but that step is not yet in force.

Can I still contribute 3% to KiwiSaver?

Only through a temporary rate reduction. Inland Revenue lets members lower their rate to 3% for 3 months to a year, and reductions can be taken back to back. A reduction cannot be taken while on a savings suspension, and if no further reduction is applied for, deductions return to 3.5%. An employer can choose to match 3% while the reduction applies.

How much is the KiwiSaver government contribution?

For the year starting 1 July 2025 and later years, the government contributes 25 cents for every dollar a member contributes, up to $260.72 a year. A member needs to contribute at least $1,042.86 between 1 July and 30 June to reach the maximum. It was previously 50 cents per dollar up to $521.43.

Is there an income limit for the government contribution?

Yes. From 1 July 2025, members with a taxable income of more than $180,000 a year are not eligible. Inland Revenue states the test as a taxable income of $180,000 or under.

Do 16 and 17 year olds get KiwiSaver contributions?

Since 1 July 2025 they can receive the government contribution if they meet the other conditions, and since 1 April 2026 they can receive compulsory employer contributions of 3.5% of pay. They must join through a KiwiSaver provider with a guardian co-signing; they cannot be automatically enrolled or join through their employer.

When can I opt out of KiwiSaver?

If you were automatically enrolled by an employer, you cannot opt out in the first 13 days. You can opt out from day 14 to day 56 after starting the job, and you need to do this again each time you start a new job. Inland Revenue allows a late opt-out within 3 months of the first contribution only in specific situations. If you joined directly through a provider, you cannot opt out, though a savings suspension may be available.

Can I stop paying into KiwiSaver for a while?

After 12 months of membership, an employee who has contributed can take a savings suspension of 3 months to 1 year without giving a reason, as often as they like. Within the first 12 months, a suspension is available only on evidence of financial hardship. Employer contributions generally stop during a suspension unless the employment agreement says otherwise.

Can I use KiwiSaver to buy a house?

Members of at least 3 years may be able to withdraw most of their savings for a first home they intend to live in, leaving at least $1,000 in the account. It cannot be used for an investment property. Previous homeowners may be able to use it if Kāinga Ora assesses them as being in the same financial position as a first home buyer. Not all funds allow first home withdrawals.

Can I withdraw KiwiSaver if I move overseas?

A member who has permanently emigrated, other than to Australia, can apply no earlier than 1 year after leaving to withdraw most of their savings, but not the government contributions. The application needs a statutory declaration of permanent emigration and proof of an overseas address. People moving permanently to Australia can transfer their savings to an Australian superannuation scheme instead, though they do not have to.

Is the First Home Grant still available?

No. The government closed the First Home Grant with immediate effect on 22 May 2024. Only a narrow exemption could be considered, for people whose pre-approval had expired and who had signed a sale and purchase agreement on or before that date. The KiwiSaver first home withdrawal is a separate rule and remains available.