How KiwiSaver contributions work
KiwiSaver is made up of money from three different sources:
- You contribute money from your pay.
- Your employer contributes money as well.
- The Government may add extra money to your KiwiSaver account.
1. Your contributions
Your contribution is taken directly from your pay and paid into your KiwiSaver account.
Since 1 April 2026, the standard contribution rate is 3.5% of your pay before tax. You can also choose to contribute 4%, 6%, 8% or 10%.
For example, if you earn $1,000 before tax and contribute 3.5%, $35 will go into KiwiSaver.
If 3.5% is more than you can afford, you can apply through myIR to temporarily reduce your contribution rate to 3%. This reduction lasts between three and twelve months and can be renewed.
2. Your employer's contributions
Your employer must also contribute at least 3.5% of your pay to your KiwiSaver account.
For example, if you contribute 3.5%, your employer will generally contribute another 3.5%.
If you choose to contribute more — for example, 8% — your employer does not have to increase their contribution. They can continue contributing 3.5%, although some employers choose to contribute more.
Your employer's contribution is taxed before it is added to your KiwiSaver account, so the amount you receive will be slightly less than 3.5%.
3. The Government contribution
The Government can also add money to your KiwiSaver account.
For every $1 you contribute, the Government adds 25 cents, up to a maximum of $260.72 each year.
To receive the full $260.72, you need to contribute about $1,043 of your own money during the KiwiSaver year, which runs from 1 July to 30 June.
You won't receive the Government contribution if your annual income is $180,000 or more.
What happens to the money
You don't have to do anything to get your contributions invested. Every payment — yours, your employer's and the government's — flows automatically into the KiwiSaver fund you're in, buying units at that day's unit price.
From there it stays invested on your behalf. Your provider manages the underlying mix of shares, bonds, property and cash that makes up your fund, and any returns are reinvested rather than paid out, so your balance compounds over time.
If you've never actively chosen a fund, you'll usually have been placed in your provider's default fund, or one based on your age. That fund keeps receiving and investing every contribution until you switch — so it's worth making sure the one you're in actually suits your timeframe.