As part of the Government's recent Budget Announcement several changes are going to be made to KiwiSaver, including some significant ones that will impact an employer's bottom line.
Changes to the KiwiSaver scheme include the following:
Contribution Rate IncreasesGradually increasing the employee and employer contribution rate from 3% to 4%
- The current 3% rate will raise to 3.5% from 1 April next year and reach 4% on 1 April 2028
- An employee can still elect to keep their contributions at 3%. If so, then their employer can make their contributions at 3% as well
Decrease to Annual Government Tax CreditA decrease to eligible KiwiSaver members annual tax credit to $260.72 (down from $521.43 per year)
- Removing the annual tax credit to any earners over $180,000. Earners over this amount will no longer receive the Government’s annual tax credit.
Withdrawals for Farmers Relaxing the rules to allow farmers to use their KiwiSaver funds to purchase their first farm.
You can find more information about the Government’s 2025 Budget, including the changes to KiwiSaver here:
www.treasury.govt.nz/sites/default/files/2025-05/b25-at-a-glance.pdf www.rnz.co.nz/news/political/561810/budget-2025-at-a-glance-the-big-changes-winners-and-losers www.beehive.govt.nz/release/responsible-budget-secure-nz%E2%80%99s-future