Hospitality operators are reminded to prepare for KiwiSaver changes in 2026, including contribution changes coming in the next few months.
Key dates to note
1 February 2026: Employee applications for temporary rate reduction open
Ahead of increases to compulsory KiwiSaver contribution rates, which will take effect from 1 April 2026, from February, your employees can apply to Inland Revenue for a temporary rate reduction to maintain their current Kiwisaver contribution rate.
The application is made by the employee through the Inland Revenue website – the rate reduction will start from 1 April 2026, when the change to the default KiwiSaver contribution rate from 3% to 3.5% comes in.
If an employee’s application is approved, they can stay at 3% for between 3 and 12 months.
Notification process:
As an employer, you will be notified – either by your employee or Inland Revenue – of any KiwiSaver rate reductions that need to be applied to your payroll from 1 April.
You will receive:
- a letter from Inland Revenue advising which employee has been granted a temporary rate reduction and the periods they’ve been granted it for, or,
- a letter from your employee showing the period they have an active rate reduction for, or
Choice to match employees rate reduction
As an employer, you will be able to match your employee’s temporary rate reduction. However, when your employee moves to a higher contribution rate, you will need to increase your employer contributions to the default 3.5% rate that comes into effect on 1 April.
1 April 2026: New contribution rates take effect
Two significant changes come into force on this date:
Increased Contribution Rates
The default KiwiSaver contribution rate increases from 3% to 3.5% for both employers and employees. Any staff member currently contributing at the minimum 3% rate will automatically move to 3.5% unless they’ve successfully applied for a rate reduction.
Hospitality businesses run on tight margins, so this increase will require some budget planning.
Employer Contributions for 16-17 Year Olds
You must now make KiwiSaver contributions for eligible employees aged 16 and 17. Previously, employer contributions were only mandatory for workers aged 18 to 65. This change is particularly relevant for our sector which commonly employs younger workers.
To be eligible, these younger employees must work for you for more than 28 days and meet standard KiwiSaver membership requirements. If they’re already enrolled in KiwiSaver and you weren’t previously contributing, you’ll need to start from 1 April.
Preparing your business
Get prepared now.
- Ensure your payroll systems are set up to accommodate the new 3.5% default rate from 1 April.
- Review your current workforce to identify any 16-17 year old employees who will trigger new employer contribution obligations.
Factor these increased costs into your financial planning for the year.
It is also important to communicate these changes to your team. While employees will receive information from Inland Revenue, proactive communication from you can help staff understand their options.
Looking Ahead
It’s worth noting that this isn’t the final change. Another increase to 4% is scheduled for 1 April 2028. Planning for these progressive increases now will help you manage the financial impact on your business over the coming years.
Find out more about the Temporary Rate Reduction here – Inland Revenue website