From 1 April 2026, the minimum KiwiSaver contribution that both employees and employers must pay will increase from 3 % to 3.5 % of your salary or wages — with a further step up to 4 % in April 2028. This change is designed to help New Zealanders build stronger retirement and first-home savings over their working life.
If you’re not yet a KiwiSaver member, here’s what you should know about the benefits and what you’re currently leaving on the table each year.
1. Free money from your employer (and the Government)
If you join KiwiSaver, your employer must contribute at least 3.5 % of your gross pay into your KiwiSaver account from 1 April 2026. That’s money you don’t have to earn or save yourself which is a direct boost to your savings.
Stats NZ reports the median NZ salary is about $69,800 per year and at 3.5 %, your employer will contribute roughly $2,443 a year into KiwiSaver.
If you were already enrolled, that’s extra savings growing each year in your KiwiSaver balance, compounding with investment returns.
If you’re currently not in KiwiSaver, you miss out on every dollar of this contribution.
On top of the employer contribution, there’s also a Government contribution - currently up to $260.72 a year if you contribute enough yourself. That’s more free money that goes straight into your savings.
Combine this with employer contributions and investment growth, and KiwiSaver becomes a powerful long-term savings tool.
2. Compound growth over time is a big advantage
KiwiSaver isn’t just about what goes in today, it’s about what your money could become by age 65. Investment earnings over decades can dramatically boost your balance.
Even modest annual contributions early in your career can grow significantly through compound returns. For many members, KiwiSaver is one of the largest chunks of wealth they hold at retirement.
And with the default contribution rate increasing to 3.5 % in 2026 (and then 4 % in 2028), the amount flowing into your account, and the potential growth over time is only going to strengthen.
3. What you’re missing out on each year
Using a simplified scenario based on the median NZ salary of around $69,800:
Employer contribution at 3.5 % = $2,443
Plus Government contribution (max) = $260
Total missed if not enrolled $2,703+ pa.
By not joining, you’re effectively forgoing more than $2,700 a year in contributions that could go straight into your future savings before any investment returns. Over 10 years, that’s potentially $27,000+ (before growth), compounding above that amount. Even a conservative return can make this difference much larger in the long run.
4. Flexibility and control
Joining doesn’t lock you in beyond your control. KiwiSaver allows you to:
· Choose how much you contribute (more than the minimum if you want to accelerate savings)
· Change your contribution rate (subject to some rules)
· Choose the type of investment fund that matches your risk tolerance
There are also options for first-home buyers to use KiwiSaver savings for a deposit or to help with loan requirements.
5. The cost of waiting
Right now, many Kiwis haven’t yet joined KiwiSaver which means they’re missing out on free contributions and the long-term growth that comes from saving consistently. As contribution rates rise over the next few years, the future value of those missed contributions will continue to grow.
Put simply: the sooner you join, the more you benefit. Every year you delay means less employer money and compounded growth added to your financial future.
Bottom line
Joining KiwiSaver isn’t just about setting aside a portion of your salary, it’s about tapping into:
· Employer contributions you otherwise miss entirely.
· Government top-ups where eligible.
· Long-term growth through compound returns.
With the default employer contribution rising to 3.5 % from 1 April 2026, the incentive to be in KiwiSaver has never been stronger. Missing out means leaving potentially thousands of dollars and years of compounded growth on the table.