How much of my pay goes into KiwiSaver in 2026?
If you are in KiwiSaver and have never chosen a contribution rate, 3.5 percent of your before-tax pay now goes into your KiwiSaver account every pay day. That default rate rose from 3 percent on 1 April 2026, and it will rise again to 4 percent on 1 April 2028. Your employer must put in at least the same percentage on top of your wages.
The government still adds money each year, but less than it used to. Since 1 July 2025 it pays 25 cents for every dollar you contribute, up to $260.72 a year, and only if your taxable income is $180,000 or less. This guide covers what the new settings mean for a typical pay packet and the options if 3.5 percent is too much right now.
The basics
- Employee contribution rates you can choose: 3.5, 4, 6, 8 or 10 percent of your gross (before-tax) pay. If you do not choose, the default of 3.5 percent applies.
- The default rises to 4 percent on 1 April 2028. Anyone on the default rate moves up automatically.
- If you were already contributing more than 3 percent before April 2026, your rate did not change. If your employer was only paying 3 percent, their contribution rose to 3.5 percent.
- Employer contribution: a compulsory minimum of 3.5 percent of your gross pay, rising to 4 percent in 2028. It is taxed before it reaches your account (see "The catch").
- Government contribution: 25 cents per dollar you put in, capped at $260.72 a year. To get the full amount you need to contribute at least $1,042.86 between 1 July and 30 June.
- Income cap: if your taxable income is over $180,000 you get no government contribution at all.
- Age: you must be 16 or over to get the government contribution. From 1 April 2026, employed 16 and 17 year olds also qualify for employer contributions, which they did not before.
- Temporary rate reduction: if 3.5 percent is a stretch, you can apply through Inland Revenue to drop to 3 percent for 3 to 12 months. After 12 months you go back to the default. You can apply again as often as you like.
- Pay periods that straddle 1 April are deducted entirely at the new rate.
How it is worked out
Take someone on a $60,000 salary, paid weekly, contributing at the default rate in the 2026/27 year.
Your contribution: 3.5 percent of $60,000 is $2,100 a year, or about $40.38 a week. It comes out of your gross pay before income tax, but it is not tax deductible. You still pay PAYE on the full $60,000.
Employer contribution: 3.5 percent of $60,000 is also $2,100. Before it reaches your account Inland Revenue takes employer superannuation contribution tax (ESCT). The ESCT rate depends on your salary plus the employer contribution, so $62,100 here, which sits in the 17.5 percent band ($18,721 to $64,200). ESCT is $367.50, leaving $1,732.50 in your account.
Government contribution: 25 cents for each of your $2,100 would be $525, but the cap is $260.72, so you get $260.72. Because $2,100 is above the $1,042.86 needed for the full amount, you have already maxed it out.
Total into your KiwiSaver for the year: $2,100 + $1,732.50 + $260.72 = $4,093.22. Your own money is $2,100 of that. The rest is free.
From 1 April 2028 at 4 percent: your contribution becomes $2,400 a year ($46.15 a week) and your employer's gross contribution also rises to $2,400.
On the temporary 3 percent rate: your contribution drops to $1,800 a year ($34.62 a week). Your employer can choose to match the lower rate, so the combined amount can fall by $600 or more a year.
A real-world scenario. Manaia earns $60,000 and had a $10 a week shortfall after the April 2026 rate change pushed her deduction from $34.62 to $40.38. She applied to Inland Revenue for a temporary rate reduction to 3 percent for 12 months. Inland Revenue told her employer, who dropped their matching contribution to 3 percent too. In April 2027 Inland Revenue notified her employer again and both contributions went back to 3.5 percent. Manaia lost about $600 of her own savings plus up to $600 of employer money over the year, but kept her full $260.72 government contribution because $1,800 is still above the $1,042.86 threshold.
The catch
- The government contribution was halved. Until 30 June 2025 it was 50 cents per dollar up to $521.43. Anyone who built their contribution around that figure now gets $260.72 at most.
- ESCT eats part of your employer's money. The 3.5 percent you see in your agreement is gross. Depending on your income, between 10.5 and 39 percent of it goes to Inland Revenue as ESCT before the rest lands in your fund.
- Total remuneration clauses. Some employment agreements say your salary includes the employer's KiwiSaver contribution. That is legal if you agreed to it in good faith, and it means raising your rate does not get you any extra employer money.
- Earning over $180,000 means no government money. The test is your taxable income for the year, so a one-off bonus that tips you over can cost you the $260.72.
- Part-year rules. The government contribution is counted by the days you were eligible. If you turn 16, join KiwiSaver or reach your retirement withdrawal date mid-year, you get a proportion.
- The temporary reduction is not a savings suspension. A savings suspension stops contributions entirely for up to a year but is only available after 12 months of membership. The rate reduction keeps you at 3 percent and is the gentler option.
- Employer contributions can lapse if you take a savings suspension. No employee contribution usually means no employer contribution for that period either.
- Self-employed and non-earners have no employer, so to get the $260.72 they must pay $1,042.86 into their fund themselves by 30 June.
Do this next
- Check your payslip for the KiwiSaver line. From April 2026 it should show 3.5 percent of gross pay unless you chose a higher rate. If it still shows 3 percent and you have not applied for a reduction, ask payroll why.
- Check your employer's contribution. It should be at least 3.5 percent gross, with ESCT shown separately or deducted by Inland Revenue.
- Decide whether to go higher. You can change your rate by telling your employer in writing, or through myIR. Rates above the default are 4, 6, 8 and 10 percent.
- If 3.5 percent is too much, apply for a temporary rate reduction in myIR rather than stopping altogether. Choose 3 to 12 months.
- Make sure you hit $1,042.86 by 30 June if you want the full government contribution. Low earners and part-timers may need a voluntary top-up through their provider.
- If you are 16 or 17 and working, confirm your employer has started contributing from 1 April 2026. Existing members should see it start automatically.
- Diary 1 April 2028 for the move to 4 percent.
- Check your fund type and fees. They matter as much as your rate over the long run. Our KiwiSaver fund checker shows what they could mean for your balance at 65.
Common questions
Can I stay on 3 percent permanently?
No. The temporary rate reduction lasts 3 to 12 months and then resets to the default. You can reapply as many times as you like, so in practice you can keep renewing it, but each renewal is a fresh application.
Does my employer have to match if I contribute 8 percent?
No. The employer minimum is 3.5 percent (4 percent from 2028). Some employers match higher rates, but it is up to them and should be in your employment agreement.
Is my own KiwiSaver contribution taxed?
Your contribution comes from pay that has already been taxed, so there is no second tax on it. Investment earnings inside the fund are taxed at your prescribed investor rate (PIR), and your employer's contribution is taxed by ESCT.
I earn $190,000. Should I still contribute?
You will not get the government contribution, but you still get your employer's 3.5 percent, which is worth far more. Opting out of KiwiSaver to avoid your own contribution also forfeits the employer money.
What if my pay goes up and down each week?
KiwiSaver is a percentage, so the dollar amount moves with your gross pay each period. The $1,042.86 needed for the full government contribution is an annual total, so it is the yearly figure that matters.
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Last reviewed 14 October 2026. Written by Streetwise from the official pages listed above. General information only, not legal or financial advice.