KiwiSaver changes in 2026: what's different, and what to do

Every KiwiSaver year — which runs from 1 July to 30 June — the government chips in alongside your own contributions. For years that top-up was 50 cents for every dollar you put in, up to a maximum of $521.43. From the 2025/26 year onward it's been cut in half: 25 cents per dollar, capped at $260.72. To receive the full amount you still need to contribute at least $1,042.86 of your own money during the year.

There's also a new income test. If you earn more than $180,000 of taxable income a year, you no longer receive any government contribution at all. Below that, you still get it — just at the smaller rate. The change first applied to the year that ended 30 June 2026; the year before was paid out under the old $521.43 rules, so the top-up you saw in mid-2025 was the last of the larger ones. The mechanics are set out on Inland Revenue's KiwiSaver changes page.

The default employee contribution rate rises from 3% to 3.5% on 1 April 2026, and then to 4% on 1 April 2028. If you're on the default rate, the extra comes out of your pay automatically from your first pay day on or after that date — you don't need to fill in anything. Just as importantly, your employer's minimum contribution rises to match, from 3% to 3.5% (and 4% in 2028). That employer increase is the part that quietly makes most people better off, which we'll come back to.

One small footnote: employer contributions have ESCT (employer superannuation contribution tax) taken out before they land in your account, so the extra half a percent your employer puts in is worth a little less than the headline figure. It's still money you weren't getting before. Business.govt.nz has a straightforward summary of the rate changes if you want the official version.

Inland Revenue knows the higher rate won't suit everyone's budget, so there's a new option called a temporary rate reduction. From 1 February 2026 you can apply through myIR to keep contributing at 3% for anywhere from three months to a year. It's not a hardship test, it reverts to the default rate automatically when it ends, and you can reapply. (You can't use it if you already have a savings suspension in place, or if you're 65 or over.)

Here's the part most summaries skip: your employer may choose to drop to 3% too while you're on the reduced rate. If they do, you're not just saving your own half a percent less — you're also missing their extra half a percent, so the total going into your account falls by around 1% of your pay. That can still be the right call if you're clearing high-interest debt or genuinely tight on cash for a few months. It's a poorer trade if you're only doing it to nudge up your take-home pay, because you give up both the employer money and the years of compounding on it. If you're not sure, it's worth a quick conversation before you apply.

This one's easy to miss but genuinely useful for families. Since 1 July 2025, 16 and 17-year-olds who contribute to KiwiSaver receive the government contribution, and from 1 April 2026 their employers must contribute too — the same deal older members get.

The catch is that automatic enrolment still doesn't start until 18, so a working 16 or 17-year-old has to opt in themselves to benefit — it won't happen for them. And to collect the full (now smaller) $260.72 government contribution, they still need to have contributed $1,042.86 across the year, with the maximum reduced pro-rata for any part of the year they weren't yet eligible. If you've got a teenager with a part-time job, this is a low-effort way to get government and employer money into their name early — where it has the most time to grow.

This is the question we get asked most, and the honest answer is that the two big changes pull in opposite directions. You've lost up to $260.71 a year in government money, but you've gained an extra half a percent of employer contributions. Which one wins depends mostly on your salary, because the employer contribution is a percentage of your pay while the government cut is a flat dollar figure.

The table below shows the rough trade-off for someone who was already contributing enough to get the full old top-up. These are gross figures — before that employer tax, and before any investment returns — so treat them as the shape of the thing, not a precise forecast for your situation.