KiwiSaver employer contributions after the April 2026 increase
The default rate is moving from 3% to 4% in two steps, and the first step widened who you contribute for. Here is what changed on 1 April 2026, what changes in 2028, and how ESCT, opt-outs and suspensions fit around it.
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Key takeaways
- The default employee and minimum employer contribution rose from 3% to 3.5% for paydays from 1 April 2026, and rises to 4% from 1 April 2028
- Employer contributions are taxed with ESCT at a rate set by the employee’s earnings, so less than 3.5% reaches the fund
- Since 1 April 2026, 16- and 17-year-old KiwiSaver members qualify for employer contributions too
- Employees can apply to stay at 3% for 3 to 12 months; matching that lower rate is your choice
- Employer contributions are always paid on top of the minimum wage, never out of it
The rate change: 3% to 3.5% to 4%
| Paydays | Default employee rate | Minimum employer rate |
|---|---|---|
| Before 1 April 2026 | 3% | 3% |
| From 1 April 2026 | 3.5% | 3.5% |
| From 1 April 2028 | 4% | 4% |
The new rate applies to every payday from 1 April, including a pay period that started in March. Employees already contributing more than 3% keep their rate, but your contribution for them still rises to 3.5% if it was at 3%. Employees can choose higher rates, but you only have to contribute the minimum.
For a staff member on $1,000 a week, the minimum employer contribution went from $30.00 to $35.00 before ESCT, and will be $40.00 from April 2028. Across a payroll that is a cost increase worth budgeting for now.
Who you contribute for
You make compulsory contributions for employees who are KiwiSaver members, unless you already contribute for them to another qualifying superannuation scheme. Automatic enrolment applies to new employees aged 18 to 65.
16 and 17 year olds — new from 1 April 2026
Until April 2026 you did not have to contribute for members under 18. Now 16- and 17-year-old members qualify for employer contributions of 3.5%, as long as they meet the other eligibility rules. They are not automatically enrolled when they start, so check each young employee’s KiwiSaver status — hospitality and retail rosters often have several.
Employer superannuation contribution tax (ESCT)
Your contribution is taxed before it reaches the employee’s fund. The ESCT rate depends on the employee’s earnings — their salary or wages plus your contributions — and has used these thresholds since 1 April 2025:
| ESCT rate threshold amount | ESCT rate |
|---|---|
| $0 – $18,720 | 10.5% |
| $18,721 – $64,200 | 17.5% |
| $64,201 – $93,720 | 30% |
| $93,721 – $216,000 | 33% |
| $216,001 and over | 39% |
You can either deduct ESCT from each contribution, or — if you and the employee agree — include the contribution in their gross pay and tax it under PAYE. Taking the first route for an employee on $1,000 a week ($52,000 a year plus $1,820 of contributions, so 17.5%): $35.00 × 17.5% is about $6.13 of ESCT, so about $28.87 reaches their account. The worked pay in our PAYE guide shows a 30% example.
Temporary rate reductions
Employees on the default rate can apply to Inland Revenue to contribute 3% for between 3 and 12 months, and can apply more than once. Act only on Inland Revenue’s notice or the employee’s confirmation. You can choose to match the lower 3% or keep contributing 3.5% — matching is optional, not required. When the period ends, contributions return to the default rate.
Opt-outs and savings suspensions
- Opting out. Only employees you automatically enrolled can opt out, and only on or after day 14 and on or before day 56 of starting work. If you have not yet filed and paid the deductions, refund the employee yourself; if you have, Inland Revenue refunds them — never do both. Your own contributions and the ESCT on them come back to you.
- Savings suspensions. An employee can apply in myIR for a temporary break. Inland Revenue sends you a notice with the dates. Stop deductions from the next pay; you may also stop your compulsory contributions and ESCT for the period, or keep contributing if you choose. Inland Revenue tells you when deductions restart.
Pay, total remuneration and the minimum wage
Employers and employees can negotiate whether the employer contribution sits inside a total remuneration package, but the compulsory contribution is the employer’s responsibility and is paid on top of gross pay. It can never take an employee below the minimum wage: someone on $23.95 an hour gets $23.95 plus your contribution.
KiwiSaver deductions and contributions are reported in each payday filing and paid with PAYE. Most errors trace back to a wrong rate in payroll or an employee whose status changed, so review rates whenever Inland Revenue sends a notice. RosterElf’s payroll integration sends hours to your payroll system, which applies each employee’s KiwiSaver settings.
Related guides
- PAYE for employers — a full weekly pay with KiwiSaver and ESCT
- Payday filing — reporting the deductions each payday
- Minimum wage — why contributions sit on top
Sources
Checked on 15 October 2026.
- Inland Revenue — KiwiSaver changes
- Inland Revenue — IR340 PAYE deduction tables (April 2026), ESCT rates
- Inland Revenue — Employer superannuation contribution tax
- Inland Revenue — Employees who want to opt out of KiwiSaver
- Inland Revenue — Suspending KiwiSaver deductions and contributions
- Employment New Zealand — Deductions
Clean hours make clean contributions
Approved hours flow to your payroll system, where each employee’s KiwiSaver rate and ESCT are applied — no re-keying, no missed pay runs.
This guide summarises KiwiSaver employer obligations as they apply from 1 April 2026, and is not tax or payroll advice. Eligibility and rates depend on each employee's circumstances and Inland Revenue's notices. Check Inland Revenue, or take advice, before relying on it for a specific case. It does not constitute legal, HR, or professional advice and should not be relied on as a substitute for advice specific to your business, workforce, or circumstances.
KiwiSaver employer questions
- At least 3.5% of the employee’s gross pay for paydays from 1 April 2026, up from 3%. It rises again to 4% from 1 April 2028. You do not have to match an employee who chooses a higher rate such as 6% or 8%.
- Inland Revenue’s guidance is that the new rate applies to every payday from 1 April, so a pay period that runs across the date is deducted entirely at the new rate.
- From 1 July 2025 the government contributes 25 cents for each dollar a member contributes in a year, up to $260.72. Members with taxable income over $180,000 a year do not qualify. It is paid by the government, not the employer.