Contents
Major changes to KiwiSaver were announced in Budget 2025 and they’re set to affect both your team and your business over the next few years.
KiwiSaver has long been a tool to help Kiwis save for retirement or when buying a first home. But with rising cost of living and economic pressures, the Government has made adjustments to make the scheme more sustainable.
As your trusted North Shore accountant, we’re here to break down what the changes mean and help you prepare.
Changes That Affect Your Employees (from 1 July 2025)
-
16- and 17-year-olds now eligible: Employees aged 16 and 17 will now qualify for government KiwiSaver contributions, provided they meet other standard criteria. Prior to 1 July 2025, members must be 18 or older to qualify.
-
Government contributions halved: The maximum annual government contribution will reduce from $521.43 to $260.72.
-
No government contributions for high earners: Individuals earning more than $180,000 of taxable income annually will no longer qualify for the government top-up.
-
No changes for the 2024/25 year: Contributions for the year ending 30 June 2025 will still be paid at the current rate.
Changes That Affect Your Business (from 1 April 2026)
-
Default contribution rates increasing to 3.5%: The minimum employer and employee contributions will rise from 3% to 3.5%.
-
Employees can opt to stay at 3%: Team members can apply for a temporary rate reduction if they wish to keep their contribution at 3%.
-
Employers can match employee rate reduction: If your employee opts for the reduced rate, you can match it temporarily. IRD will let you know when they return to the 3.5% rate, and you’ll need to increase your contributions accordingly.
-
Younger workers now included: If you employ 16 or 17-year-olds who contribute to KiwiSaver, you’ll now be required to make employer contributions for them too
From 1 April 2028, default contribution rates for both employers and employees will rise again to 4%.
What This Means for Your Business
These changes may seem gradual, but they could significantly impact your payroll, cashflow and admin systems particularly if you employ young staff or operate in a tight labour market.
As a small business owner, you’ll need to:
-
Factor increased employer contributions into your budgeting and cashflow planning
-
Ensure your payroll software is updated
-
Review employment agreements where needed
-
Stay ahead of IRD updates and employee notifications
Talk to a North Shore Accountant Who Gets It
At DVA, we work with small businesses across North Shore and wider Auckland to help manage payroll, compliance and forecasting.
Whether it’s updating your KiwiSaver setup, reviewing employment cost projections or simply keeping your payroll on track, we’re here to help you stay one step ahead.
