Hiring Hot Topics: KiwiSaver
Whether you have one or one thousand employees, you might need to pay KiwiSaver as an employer in New Zealand. The scheme is a great way for people to save for their retirement, so it’s important for employers to stay up –to date on recent changes to make sure they’re meeting legal obligations.
Here’s what employers should know.
What is KiwiSaver and how is it different to superannuation?
KiwiSaver is a voluntary savings and investment scheme designed to help New Zealanders save for their retirement. All citizens and permanent residents are eligible to join, but since the scheme is voluntary, some might opt out. Employees can choose their preferred KiwiSaver fund.
Currently, employers must contribute at least 3% of an employee’s total earnings. Employees can choose to contribute 3%, 4%, 6%, 8% or 10% or their pre-tax pay.
Superannuation, on the other hand, refers to the government-aged pension. This is for retirees aged 65 or older, who meet certain criteria. Unlike KiwiSaver, superannuation doesn’t include any individual or employer contributions as it is fully government- funded.
What are your obligations as an employer?
All employers generally need to pay KiwiSaver, no matter the size of the business, unless the team member opts out. You must enrol eligible new employees aged 18–64 unless they’re exempt (e.g. casual employees or temporary team members employed for 28 days straight or less).
Employers also have to provide a KiwiSaver information pack within seven days of a new starter joining (as well as for anyone who requests one). It’s easiest to simply include this as part of the onboarding process, says Rachael Judge, Employment Partner at Simpson Grierson. Some payroll systems can even send one automatically.
As part of this onboarding, you’ll either need to get the details of the employee’s chosen fund or tell them you’ll be contributing to your default one. Then, send the employees’ details to the Inland Revenue Department (IRD).
Employees can choose to opt out, but only from the 13th day of their employment through to the 55th day – not before and not after. If this is the case, you have to send out their opt-out request form to the IRD.
When it comes to paying KiwiSaver, this must be done every pay cycle. Both the member and employer contributions go the IRD through the PAYE process.
There are a number of risks if you don’t manage KiwiSaver correctly. Employers can face penalties for not meeting KiwiSaver obligations, such failing to give team members the right information or not enrolling new employees, says Judge. There are also penalties if you’re late with payments or miss them entirely.
Upcoming changes to KiwiSaver
There are three main changes coming to KiwiSaver from 1 April 2026:
Both the default employee and employer contribution rates will increase to 3.5%.
Employees will be able to apply for a temporary reduction (back to 3%) for up to a year, which employers can choose to match.
Employees aged 16–17 will be eligible for compulsory employer contributions.
Most common mistakes and how to fix them
Some of the most common mistakes Judge sees are: failing to give employees the right information; miscalculating salary amounts and stopping employee deductions; and employer contributions in some situations, such as parental leave.
It’s important to be upfront about whether an employee’s salary includes KiwiSaver, as some might ask for it to be paid on top, says Judge. While employers are legally allowed to take a ‘whole remuneration’ approach, where the salary amount includes compulsory contributions, this is only valid if it’s in the signed employment agreement.
This also can’t push an employee’s pay below minimum wage – that means anyone on minimum wage must receive KiwiSaver employer contributions on top of their salary. For example, if your employee is paid $23.50 per hour (the current minimum wage, going up to $23.95 on 1 April 2026), you’ll have to pay 3% on top of this.
If you do make a mistake, it’s important to act quickly. There are a few ways to take action:
Contact the IRD. Depending on what the error was, there are processes for mistakes such as incorrect payments. These often come with minor penalties.
Communicate with the employee. Keep them updated with what has happened and what you’re doing to fix the issue.
Update your processes. If there has been an error, make sure you set up internal checks or payroll audits to make sure it doesn’t happen again.
Where to go for more information
Inland Revenue has a broad range of resources on KiwiSaver. For more specific advice relating to your business, contact your accountant, seek legal advice or speak with your default fund.