KiwiSaver changes from 1 April – here’s what you need to know
At People in Mind, we’re already working through what the 1 April changes mean for our clients so we thought now is the perfect time to share our recommendations with you and let you know what we’re doing behind the scenes if we process your payroll.
What’s changing?
KiwiSaver contribution rates are increasing (gradually) with both the default Employee and Employer contribution rates increasing in two stages:
- From 1 April 2026: 3% → 3.5%
- From 1 April 2028: 3.5% → 4%
This increase applies unless an employee takes steps to temporarily opt down to 3%.
Younger workers – 16 & 17 year olds
From 1 April 2026, employers will also be required to make KiwiSaver contributions for 16 & 17 year olds if they have joined KiwiSaver and they have elected to make employee contributions.
Auto-enrolment still begins at age 18, so younger employees need to actively choose to join.
Employees can temporarily opt down to 3%
Employees who feel they cannot afford the increase can apply to Inland Revenue for a temporary savings reduction, allowing them to remain at 3%. Key points to know:
- Applications open from 1 February 2026
- The reduced rate applies for up to 12 months
- After that, the employee will default back to the higher rate unless they reapply
- Employers are only required to match the employee’s actual contribution rate
Once Inland Revenue approves an opt-down, they will notify both the employee and the employer.
As an employer we recommend you
- Let staff know what’s changing and when, in plain language
- Encourage younger employees to learn about KiwiSaver, as they may not fully understand KiwiSaver
- Check your payroll systems are ready ahead of the changes
A note of caution: KiwiSaver-inclusive remuneration
If your employment agreements state that remuneration is inclusive of the employer’s KiwiSaver contribution, these contribution increases may have unintended consequences — including an effective reduction in take-home pay as employer contributions increase.
If you have KiwiSaver-inclusive remuneration clauses, we strongly recommend you seek advice before the 1 April 2026 changes take effect. We’re happy to help you think this through or work alongside your legal adviser.
If People in Mind processes your payroll
For our payroll clients, this is not something we are leaving to chance. We are actively preparing for the changes by auditing each payroll along with sending out emails to each of our clients during February and March with an update and an action list (if needed).
Start the conversation now
Let your team know about these changes and what they mean for them. Starting the conversation now gives you and your team time to prepare for the changes. If you have any questions, please give us a call on 07 823 3250 or send us an email to [email protected]
For more information about the KiwiSaver changes, see https://www.business.govt.nz/news/upcoming-kiwisaver-changes.
Please note:
This information is offered as a guide only and for any situation you may be facing we recommend that you obtain independent professional advice. Of course People in Mind can provide that advice – just call us or email us and we will be in touch.
