Taking unpaid leave, whether for travel, study, family or a sabbatical, pauses KiwiSaver contributions from your pay without you doing anything. This page covers what stops, what keeps going, and how the government contribution and any KiwiSaver-linked insurance are affected. (To deliberately pause contributions while you’re still being paid, see the KiwiSaver savings suspension page.)
KiwiSaver Contributions on Unpaid Leave
With no salary or wages, there’s nothing for payroll to deduct from:
- Your contributions stop automatically.
- Employer contributions stop too: the compulsory contribution is at least 3.5% of your gross pay, which is nil while you’re unpaid.
Your existing balance stays invested in your fund throughout, so it continues to rise and fall with the markets.
Do You Need a Savings Suspension?
Usually not. A savings suspension stops deductions from your pay, and while you’re unpaid there are none; the savings suspension page explains when one isn’t needed, who can apply, and for how long. A suspension becomes relevant if your leave includes some pay (for example reduced hours) or you want contributions to stay paused after you return.
Voluntary Contributions During Leave
You can still pay voluntary contributions directly to your provider during leave. They count towards the government contribution threshold, and they replace some of what you’d otherwise have contributed from pay. They don’t attract any employer contribution.
The Government Contribution During Unpaid Leave
The government contribution is worked out on your own contributions between 1 July and 30 June, however they were made: $1,042.86 earns the maximum $260.72, and less earns 25 cents per dollar. If leave leaves your payroll contributions short, a voluntary top-up before 30 June makes up the difference.
On a $70,000 salary contributing 4% ($2,800 a year from pay):
| Scenario | Contributions from pay | Top-up needed for the maximum |
|---|---|---|
| 6 months working, 6 months leave | $1,400 | none (already over the threshold) |
| 3 months working, 9 months leave | $700 | $342.86 |
| 12 months leave | $0 | $1,042.86 |
The KiwiSaver government contribution page has the other conditions.
Employer Contributions Not Received
The employer contributions you don’t receive during leave are the main cost. At the minimum 3.5% rate:
On a $70,000 salary (employer contributions before ESCT; your own 4% shown alongside):
| Leave duration | Employer contributions not received | Your own 4% contributions not made |
|---|---|---|
| 1 month | $204 | $233 |
| 3 months | $613 | $700 |
| 6 months | $1,225 | $1,400 |
| 12 months | $2,450 | $2,800 |
Investment returns those contributions would have earned add to the gap over time. Voluntary contributions can replace your own share, but not the employer’s.
KiwiSaver Insurance Add-Ons During Leave
Some KiwiSaver providers offer life or other insurance alongside your membership. Unpaid leave can affect it, for example if a policy’s terms depend on you working or contributing.
If you have KiwiSaver-linked cover, check its terms with your provider before your leave starts. KiwiSaver insurance add-ons explains how these policies work.
Parental Leave vs General Unpaid Leave
Parental leave has its own rules, including how government-funded parental leave payments interact with KiwiSaver and the government contribution; they’re covered in KiwiSaver contributions on parental leave. General unpaid leave (a sabbatical, travel, study leave or a career break) follows the simpler rules on this page: contributions stop when pay stops.
Worked Example: 6-Month Unpaid Sabbatical
Situation: Priya, 38, earns $85,000 and takes 6 months’ unpaid leave to travel. She contributes 4%, and her employer the 3.5% minimum.
During leave: no contributions from pay, no employer contributions; her balance stays invested.
Government contribution: her 6 months of pay contributions come to $1,700 (4% of $42,500), above the $1,042.86 threshold, so she still receives the full $260.72 without a top-up.
Optional top-up: a $100-a-fortnight automatic payment to her provider during leave adds $1,300 over 6 months (13 fortnights). That replaces most of her own $1,700 in missed contributions; the $1,488 in employer contributions she doesn’t receive (3.5% of $42,500, before ESCT) isn’t replaced.
Returning from Unpaid Leave
When you return to paid work, deductions restart at your existing rate and your employer’s contribution resumes. To change your rate, tell your employer (form KS2) or change it in myIR. You can also pay voluntary contributions to your provider at any time to close the gap left by the leave.
Summary
| Aspect | During unpaid leave |
|---|---|
| Your contributions | Stop (no pay to deduct from) |
| Employer contributions | Stop (calculated on gross pay, which is nil) |
| Savings suspension | Not usually needed |
| Voluntary contributions | Available, paid directly to your provider |
| Government contribution | Based on your contributions for the year; a top-up before 30 June counts |
| Insurance add-ons | Check with your provider |
| Existing balance | Stays invested |