New Zealand has introduced updates to KiwiSaver, the country’s voluntary retirement savings scheme, following the 2025 Budget. These changes affect employer and employee contribution obligations, government matching payments and eligibility rules. Some changes are already in effect, while others will be phased in over the coming years. Payroll and global mobility teams should review these updates to ensure accurate payroll processing, regulatory compliance and clear communication to employees.
Several amendments to the KiwiSaver government contribution, a payment made by the New Zealand government to members’ savings, took effect on 1 July 2025:
Entitlements for the year ending 30 June 2025 were unaffected and paid at the previous rate.
Payroll and mobility implications: Ensure systems and reporting reflect the reduced government contribution and confirm eligibility for younger employees and high-income earners.
The default contribution rate, the standard percentage deducted from employees’ wages and matched by employers, will increase in stages:
Operational impact: Update payroll systems and reporting workflows ahead of each milestone to ensure deductions and employer contributions are processed correctly.
To provide flexibility, employees may apply to temporarily reduce their contribution rate while remaining compliant with KiwiSaver rules:
Payroll action: Prepare to process notifications from Inland Revenue or employees and adjust contributions accordingly.
From 1 April 2026, compulsory employer KiwiSaver contributions will extend to eligible employees aged 16 and 17 who contribute from wages. Previously, employer contributions applied only to employees aged 18 to 65.
Mobility considerations: Update employee eligibility checks and contribution calculations to include younger employees and ensure compliance for both local and internationally mobile staff.
For further detailed guidance on payroll, employment law and compliance in New Zealand, including KiwiSaver requirements, visit our New Zealand Global Insights on the activpayroll website.
For more information on the KiwiSaver contribution and eligibility changes, please get in touch. Complete our Contact Us form and a member of our expert team will be happy to assist with your queries.