Employer KiwiSaver Match: Don't Leave Free Money on the Table

Your employer's KiwiSaver contribution might be the easiest money you'll ever earn – yet many New Zealanders don't fully understand how it works or how to make the most of it. With significant changes coming to KiwiSaver in April 2026, now's the perfect time to get clued up on employer contributions and ensure you're not leaving free money on the table.

What Is an Employer KiwiSaver Contribution?

An employer KiwiSaver contribution is money your employer puts into your KiwiSaver account on your behalf, separate from your own contributions.^{^[3]} It's essentially a workplace benefit that helps boost your retirement savings without coming out of your pocket.

If you're employed and contributing to KiwiSaver, your employer is legally required to contribute a minimum amount. This isn't optional – it's a compulsory workplace obligation, and it's one of the best perks of the KiwiSaver scheme.^{^[3]}

How Much Does Your Employer Contribute?

The Current Rates and What's Changing

Until 31 March 2026, employers must contribute a minimum of 3% of your gross salary if you're contributing to KiwiSaver.^{^[3]} However, this is about to change.

From 1 April 2026, the minimum employer contribution rate will increase to 3.5%.^{^[1]^[2]} This means your employer will be putting more into your account each payday, helping your balance grow faster over time.^{^[2]}

There's another increase on the horizon: from 1 April 2028, the default contribution rate will rise again to 4% for both you and your employer.^{^[5]}

Can Your Employer Contribute More Than the Minimum?

Yes. Many employers choose to be generous and contribute at higher rates. You can choose to contribute at a higher rate, and your employer can match your contributions at rates of 4%, 6%, 8%, or 10% of your gross pay.^{^[3]} If your employer offers this, it's definitely worth taking advantage of – that's free money going straight into your retirement fund.

Who's Eligible for Employer Contributions?

Employer contributions apply to employees aged 18 to 65 who are contributing to KiwiSaver.^{^[3]} However, there's exciting news for younger workers: from 1 April 2026, 16 and 17-year-olds will also become eligible for employer contributions if they're employed and contributing to KiwiSaver.^{^[5]} This gives younger New Zealanders a head start on building their long-term savings.

What About the Government Contribution?

While we're talking about free money, it's important to mention the Government contribution too. The Government matches your contributions, but the rules changed from 1 July 2025.

The Government now contributes 25 cents for every dollar you contribute, up to a maximum of $260.72 per year.^{^[4]} Previously, it was 50 cents per dollar with a maximum of $521.43. To receive the maximum Government contribution, you'll need to contribute $1,042.86 between 1 July and 30 June.^{^[4]}

There's one catch: if you earn over $180,000 per year, you won't be eligible for the Government contribution.^{^[2]} However, if you're self-employed, you're still eligible for the maximum contribution – just make sure you contribute regularly, either $24 per week or a lump sum of $1,042.86 annually.^{^[4]}

What Happens When Contribution Rates Change?

When the new rates come into effect on 1 April 2026, here's what you need to know:

If you're on the default KiwiSaver rate, your contribution will automatically increase to 3.5% of your before-tax pay, and your employer will also contribute 3.5%.^{^[2]}
More money flows into your account each payday, helping your balance grow faster.^{^[2]}
You have options if the increase doesn't suit your situation.

What If You Can't Afford the Rate Increase?

Not everyone can afford to increase their contributions, and that's okay. KiwiSaver is flexible, and there's a solution: you can apply for a temporary rate reduction.^{^[1]}

How the Temporary Rate Reduction Works

From 1 February 2026, you can apply for a temporary rate reduction to continue contributing at 3% instead of moving up to 3.5%.^{^[1]} Here's what you need to know:

The reduction won't take effect until your first payday on or after 1 April 2026.^{^[1]}
You'll need to show your employer a certificate confirming your rate reduction.^{^[1]}
The temporary reduction can last anywhere between 3 months and 12 months.^{^[6]}
You can apply more than once if you need to.^{^[6]}
You're not eligible if you currently have an active KiwiSaver savings suspension.^{^[1]}

What About Your Employer's Contribution?

Here's where it gets interesting: your employer can choose whether to match your temporary rate reduction. If they decide to stay at 3% to match your reduced rate, your employer's contribution stays at 3%.^{^[2]} However, if they choose to continue contributing 3.5%, they can do that too – it's up to them.^{^[2]}

When you're ready to move back to a higher contribution rate, your employer must increase their contributions to match the compulsory 3.5% rate (or higher if they choose).^{^[1]}

Making the Most of Your Employer's Contribution

Don't Leave Money on the Table

Your employer's contribution is essentially free money – you don't have to do anything to earn it beyond contributing to KiwiSaver yourself. Over time, this compounds significantly. For example, if you're contributing the minimum and your employer matches it, you're building your retirement savings much faster than you would on your own.

Consider Contributing More

If your employer offers to match contributions at a higher rate (4%, 6%, 8%, or 10%), it's worth considering whether you can afford to increase your own contributions.^{^[3]} The employer match effectively doubles the benefit of your contribution, making it excellent value for money.

Stay Informed About Changes

Make sure you understand when your contribution rates are changing and what that means for your take-home pay. The April 2026 increase will result in slightly less money in your pay packet, but the long-term benefit to your retirement savings is significant.

Frequently Asked Questions

What if I change jobs? Do I lose my employer contribution?

Your employer contributions stay in your KiwiSaver account – they don't disappear when you change jobs. However, your new employer will need to start making contributions if you're contributing to KiwiSaver with them. Make sure you tell your new employer that you're in KiwiSaver so they know to set up their contributions.

Can my employer stop making contributions?

No, not legally. If you're contributing to KiwiSaver, your employer is required to contribute the minimum (3.5% from April 2026).^{^[3]} However, if you stop contributing to KiwiSaver, your employer's obligation to contribute stops too.

What if I'm self-employed? Do I get an employer contribution?

Self-employed people don't get employer contributions – you're responsible for your own contributions. However, you're still eligible for the Government contribution of up to $260.72 per year if you contribute $1,042.86 annually.^{^[4]}

How much will the April 2026 rate increase cost me in take-home pay?

The increase from 3% to 3.5% means an extra 0.5% of your gross salary going into KiwiSaver. For someone earning $60,000 per year, that's roughly an extra $26 per year (or about 50 cents per week) coming out of your pay. It's a small sacrifice for the long-term benefit to your retirement savings.

Should I apply for a temporary rate reduction?

That depends on your personal situation. If your budget is tight or you have other savings goals, a temporary rate reduction might make sense. However, remember that you're potentially missing out on the employer contribution at the higher rate. If you can afford the increase, it's generally better to keep contributing at the higher rate and let that extra money compound over time.

What happens to my employer contribution if I take a KiwiSaver withdrawal or use it for a first home?

Your employer contributions are locked in your KiwiSaver account until you reach 65 (with some exceptions for first home purchases and financial hardship). Any withdrawals you make don't affect your employer's obligation to continue contributing to your account.

Next Steps: Make the Most of Your KiwiSaver

Your employer's KiwiSaver contribution is one of the best workplace benefits available – it's free money that helps build your retirement savings. With changes coming in April 2026, now's the time to:

Check whether your employer offers contributions above the minimum rate
Understand how the April rate increase will affect your pay
Decide whether a temporary rate reduction is right for you (you can apply from 1 February 2026)
Review your KiwiSaver fund choice to ensure it matches your goals and timeline
If you're changing jobs, make sure your new employer knows you're in KiwiSaver

Visit the Inland Revenue website for detailed information about the 2026 KiwiSaver changes, or talk to your employer's payroll team if you have questions about how the changes affect you. Don't leave free money on the table – make sure you're getting the most out of your employer's KiwiSaver contribution.