New Zealand’s KiwiSaver default contribution rate is increasing from 1 April 2026 – the first change to the default rate since KiwiSaver launched in 2007. If you’re currently contributing at the default 3% rate, here’s what you need to know.
From 1 April 2026, both the default employee and employer KiwiSaver contribution rates increase from 3% to 3.5%. This applies to all pay days on or after 1 April. If your first April pay period spans dates either side of 1 April, the full pay period will be calculated at the new 3.5% rate.
Further to this increase, the Government has also signalled that default contributions will increase to 4% on 1 April 2028.
If you are already contributing above 3%, your employee contribution rate will stay unchanged. However, if your employer is currently contributing 3%, their contribution will automatically rise to 3.5%, giving your KiwiSaver balance a boost without any action needed from you.
Small rate changes can have a surprisingly large impact over time. Using the Sorted KiwiSaver calculator, here’s what the shift from 3% to 3.5% could mean for two different savers in an aggressive fund:
Case Study 1: Bruce is a 30-year-old who is currently earning $80,000 with plans to retire at 65. According to the Sorted.og.nz KiwiSaver calculator, Bruce will accumulate an estimated $554,565 at retirement with both employee and employer contributions at 3.5%. At the old 3% rate, that figure would have been closer to $462,400 – a difference of over $92,000.
Case Study 2: Katie is a 45-year-old who is currently earning $180,000 and who is also planning to retire at 65. Despite being closer to retirement age, the shift to 3.5% means that Sorted.org.nz estimates that Katie will now have an estimated balance of 65 is $682,788, compared to $603,624 if her rate had been left at 3% – a gain of nearly $80,000.
In both cases, the extra 0.5% (matched by the employer) compounds into tens of thousands of dollars of additional retirement savings over time.
If the increase is likely to create cash flow pressures for you, there is the option of applying to Inland Revenue for a temporary contribution rate reduction, which would allow you to remain at 3% for a period of 3 to 12 months. You can reapply as many times as needed.
If you are interested in finding out more about a temporary rate reduction or would like to apply, you can do so here: ird.govt.nz – Temporary KiwiSaver Rate Reduction
As the above case studies highlight, even a half a percent adds up to a significant difference by the time you reach 65. If you are interested in reviewing your KiwiSaver account to make sure you are in the right fund for your age, stage and risk appetite, book a complimentary review with our team by clicking here.
The content of this article should not be taken as financial advice, or a recommendation of any financial product. These insights are based on current economic commentary, market pricing for interest rates, and our personal opinion. Threefold is not liable or responsible for any information, omissions, or errors present.