Both the employee and the employer contribute to KiwiSaver. Employers are required to contribute a minimum of 3% of the employee’s gross salary and the employee can elect to either contribute 3%, 4%, 6%, 8% or 10% of their gross salary.
From 1 April 2026 the default minimum contribution rate for both employees and employers will increase from 3% to 3.5%. Employee's can apply to Inland Revenue for a temporary rate reduction from 3.5% to 3%. The rate reduction also applies to employer contributions, allowing them to temporarily contribute at 3% but they can opt to continue contributing 3.5%. The rate reduction can be approved for a minimum of three months to a maximum of 12 months and employees must re-apply to extend it if they wish to. Inland Revenue will manage the application process and will notify the employer of approved rate reductions.
It is an automatic opt in process for new employees unless specified otherwise, although KiwiSaver deductions must cease if the employee opts out of KiwiSaver or the employer is provided with a savings suspension notice for the employee from the Inland Revenue Department.
KiwiSaver contribution deductions must be paid to Inland Revenue along with PAYE. Inland Revenue will on-pay it to the employee’s KiwiSaver provider.
On the employees KiwiSaver page you'll find the following options:
KiwiSaver Enrolment Option:
- Automatically enrol - If the employee is not already in KiwiSaver, are eligible and want to join you can choose to automatically enrol them. There are requirements and forms needed for this process which can be found here.
- Opt in - If your eligible employee was not automatically enrolled in KiwiSaver they can later choose to opt in through their employer. Sometimes employees opt into KiwiSaver through a scheme provider. This means they've chosen their own scheme and joined KiwiSaver through them. If this is the case, the IRD will notify the employer of this. Eligibility and deduction forms can be found here.
- Savings Suspension - Your KiwiSaver employees can apply for a temporary break from paying into their KiwiSaver account. It’s called a ‘savings suspension’. Employees can apply for the suspension through myIR. If the suspension is approved you stop employee deductions and your contributions. The employer is notified with a savings suspension notice as is the employee. This notice has dates showing how long the suspension is for. Employee can apply for a suspension from here.
- Opt out - The employee can choose to opt out of KiwiSaver between weeks 2 - 8 of starting the job by informing their employer. If the employee chooses to opt out of KiwiSaver outside of this period they can make this change online through their myIR portal where the employer will then be notified by the IRD. Any payments already made will be returned to the employer and in turn the employer will return to the employee. If it’s a late opt out (that's after 8 weeks), send the form to the the IRD at the address printed on the form. The opt out request form can be found here.
- Not enrolled - This option is selected for existing employees who are not enrolled in KiwiSaver and do not wish to do so.
- Ineligible - There are numerous reasons you may choose this enrolment option such as being under the age of 18. The list of reasons are listed here. Note that from 1 April 2026 employees aged 16-17 who are enrolled in Kiwisaver will become eligible for the compulsory employer contributions.
Employer Contribution: This is set as a percentage
KiwiSaver Savings Suspension: A "To" date must be entered and the end date is optional.
Reason for KiwiSaver ineligibility: If the employee has been set up as ineligible for KiwiSaver the following options are available for selection:
- Not a citizen/permanent resident
- Not normally living in NZ
- Under 18 years of age (Note, from 01/04/2026 this will change to Under 16 years of age)
- Working as an independent contractor (only available if feature has been enabled, refer to Advanced Settings for more information. This option will be set automatically if the employment type has been set as independent contractor).
N.B. It is your responsibility to verify that your employee meets all IRD requirements for enrolling, opting in, opting out, or taking a savings suspension. The system does not verify employee eligibility or prevent you from saving.
Rate Reduction
When an employee applies for a Rate reduction on their Kiwisaver, Inland Revenue will notify the employer of approved rate reductions. Notifications will be sent when:
- A temporary rate reduction is approved.
- The reduction period ends and the defual rate resumes.
- 30 days before an employee's rate reduction is due to end, the employee will be notified that the end date of their rate reduction is approaching/
- 7 days before an employee's rate reduction is due to end, the employer will be notifed that the end date is approaching and requiring the employer to increase the employee's contribution rate to the new default rate of 3.5%.
The rate reduction can be found in the employee's Kiwisaver screen.
When "Apply rate reduction to 3%" is ticked it will open the From/To date fields
Enter the dates that appear on the letter received from Inland Revenue in these fields.
Note: For both the savings suspension and the rate reduction they will be applied to the pay run as follows:
From - When the "From" date falls within a pay period, the rate reduction and savings suspension will apply for the whole of that period i.e. the From date is 15/04/2026 and the pay period is 13/04/2026 to 19/04/2026 the rate reduction/savings suspension will apply in that pay run.
To - When the "To" date falls within a pay period, the rate reduction and savings suspension will apply for the whole of that period i.e. the To date is 15/04/2026 and the pay period is 13/04/2026 to 19/04/2026 the rate reduction/savings suspension will apply in that pay run. The rate reduction/savings suspension will stop from the pay run beginning 20/04/2026.
Details on KiwiSaver exempt employees:
http://www.ird.govt.nz/kiwisaver/employers/how/working-with-employees/exempt-from-auto-enrolment/
List of approved Super (KiwiSaver and default schemes) providers: