Legislation Update

KiwiSaver Contribution Changes: What Employers Need to Know for April 2026

For: Payroll Managers, Finance Directors|4 min read|Last updated: February 4, 2026

TL;DR

From 1 April 2026, minimum KiwiSaver contribution rates will increase. Employees can apply for a temporary rate reduction from 1 February 2026. Employers must apply reductions only when they receive a valid certificate and not before 1 April 2026.

By Ben Dallimore

Starting 1 April 2026, minimum KiwiSaver contribution rates will increase across New Zealand. To help employees adjust to this change, the IRD is introducing a temporary rate reduction option that employees can apply for from 1 February 2026 via myIR.

Understanding the temporary rate reduction

From 1 February 2026, employees can apply through myIR to temporarily reduce their contribution rate if they meet one of these criteria:

  • They can't afford the increased rate
  • They prefer to save in other ways

Although employees can apply from 1 February 2026, any approved reduction won't take effect until their first pay day on or after 1 April 2026. Employees cannot apply for a rate reduction if they already have an active KiwiSaver savings suspension.

Important Timing

Do not apply any rate reduction before 1 April 2026, even if you receive the certificate earlier. The reduction only takes effect from the first pay day on or after 1 April 2026.

What employers need to do

You will need to apply the reduced rate when either:

  • The employee gives you a valid rate reduction certificate, or
  • IRD notifies you directly about their reduction period

Key points to remember

Do not apply any rate reduction before 1 April 2026Even if you receive the certificate earlier, wait until the effective date.
You can choose to reduce your employer contributionsYou may reduce your employer contributions to match the employee's reduced rate during this period.
Restore contributions when employees return to higher ratesWhen the employee goes back to a higher rate, you must increase your contributions to at least 3.5% (or higher if that's what you normally contribute). Automated award interpretation can help ensure contribution rules are applied correctly.
KS2 forms end the temporary reductionIf an employee submits a KS2 form to change their rate, that ends any temporary rate reduction, and they will need a new certificate if they want to reduce it again later.

Getting ready

Expect more questions from employees as we get closer to April. Make sure your payroll team knows to:

  1. Only apply rate reductions when they receive a valid certificate – Don't make changes without proper documentation.
  2. Hold off on any reductions until 1 April 2026 – Even if certificates arrive earlier.
  3. Restore employer contributions correctly – When employees return to higher rates, ensure your contributions match.

Questions?

If you need guidance on how these changes affect your payroll operations, get in touch with your payroll provider or consult the IRD's official guidance on myIR.

Need help navigating complex payroll compliance requirements?

Our team can help you manage KiwiSaver compliance and ensure your payroll platform is ready for these changes.

Get in touch

Ben Dallimore

Senior Solutions Consultant at Affinity

20 years helping organisations design and run accurate, compliant payroll in complex operating environments across New Zealand and Australia.

View all articles by Ben →