iPayroll is ready for the KiwiSaver changes effective April 2026

From 1 April 2026 several KiwiSaver changes introduced by the New Zealand Government will come into effect. These updates include higher minimum contribution rates, the introduction of temporary rate reduction, and new employer contribution obligations for employees aged 16 - 17.

Full details are available on the Inland Revenue website: https://www.ird.govt.nz/kiwisaver-changes.

iPayroll has been updated to ensure customers remain compliant with automatic rate updates, support for temporary rate reductions and enhanced employee data requirements.

KiwiSaver contribution rate increase

From 1 April 2026, the minimum KiwiSaver contribution rate for both employees and employers will increase from 3% to 3.5%.

• Employees currently contributing 3% will automatically move to 3.5% in iPayroll, unless a temporary rate reduction has been recorded.
• All employer contribution rates set at 3% will also automatically increase to 3.5%, including where an employee has an approved rate reduction.

Employers who wish to match the employee’s temporary rate reduction will need to reduce the employer contribution manually once the employer contribution rate has been updated.

No manual action is required for standard rate changes.

KiwiSaver temporary rate reductions

Employees may apply to Inland Revenue for a temporary rate reduction, allowing them to continue contributing at 3% for up to 12 months, subject to approval.

Once approved, employers can record the reduced rate and its expiry date in iPayroll. Employer contribution rates (3%, 3.5% or other) are recorded independently within the system.

Employees may reapply once an approved reduction period ends.

Recording rate reductions in iPayroll

iPayroll allows approved reduced contribution rates and expiry dates to be recorded against an employee’s profile ensuring the correct rate applies from 1 April 2026.

Employees without a recorded reduction will automatically move to the 3.5% rate in their first pay run on or after this date.

Setup instructions are available here: https://support.ipayroll.co.nz/portal/en/kb/articles/kiwisaver-information

Employer contributions for 16 to 17 year old employees

From 1 April 2026, employers must make KiwiSaver contributions for employees aged 16 - 17 who are enrolled and contributing.

The minimum employer contribution will be 3.5%.

To support this requirement Date of Birth is now mandatory in iPayroll for employees under 18 who are making KiwiSaver contributions.

Future KiwiSaver changes

Further KiwiSaver changes are currently under discussion including a possible increase in minimum contribution rates to 4% from 2028.

Finding a payroll system that will keep up to date with legislative changes is essential. iPayroll continues to invest in the development of new features and compliance updates to deliver a fully comprehensive, compliant and easy-to-use payroll system.

For further enquiries about the latest changes contact our Support Team on 04 472 2997.

Want to know more about iPayroll features or see how it can help you stay compliant? Contact our Team for a free demo.

Disclaimer:
This material has been prepared for general informational purposes only and is not intended to be relied upon as payroll, accounting, tax, legal or other professional advice. Readers are encouraged to seek professional advice before taking any action based on the content provided.