Parental leave in New Zealand can last up to 26 weeks (primary carer) or more with extended leave. During that time, your KiwiSaver contributions change, and this page sets out the rules (the wider KiwiSaver contributions section covers rates, employer and government contributions).
Do You Keep Contributing During Parental Leave?
It depends on whether you are receiving salary or wages from your employer.
Paid parental leave from the government (Parental Leave Payments)
Parents who qualify can receive government Parental Leave Payments, which Inland Revenue pays, rather than their regular salary. KiwiSaver contributions from these payments are optional, and they are not subject to compulsory employer contributions, so:
- Employee KiwiSaver contributions are deducted only if you ask Inland Revenue to deduct them from government parental leave payments
- Your employer does not have to contribute on these payments, but if you choose deductions, Inland Revenue also makes employer contributions at the minimum rate
Your KiwiSaver balance stays invested. If you don’t ask for deductions, no new contributions flow in from these payments; if you do, Inland Revenue deducts your contributions and adds employer contributions, and you can stop them at any time through myIR (IRD: KiwiSaver and paid parental leave).
Employer-paid top-up during parental leave
Some employers continue paying salary top-ups or supplementary payments during parental leave. If these payments are salary/wages, KiwiSaver contributions do apply unless you have a savings suspension: both your employee deductions and employer contributions continue on those amounts.
Check your employment agreement or HR policy to understand what your employer pays during leave.
Employer Contributions During Parental Leave — The Detail
Employers are not required to make compulsory KiwiSaver contributions during periods when no salary or wages are paid, and government paid parental leave payments are not treated as salary or wages for those contributions.
This means, while you receive only government payments:
- No compulsory employer 3.5% contribution from your employer (Inland Revenue pays one if you choose KiwiSaver deductions from the government payments)
- No employee contribution from pay (deductions from the government payments happen only if you ask Inland Revenue for them)
- Existing balance continues to be invested
For a parent on $80,000 who receives only government payments for 6 months and doesn’t ask for KiwiSaver deductions from them:
- Employer contributions not made: about $1,400 (half a year at the 3.5% minimum, before ESCT)
- Own contributions not made at 3.5%: about $1,400
Choosing deductions from the government payments narrows this gap, because Inland Revenue then makes employer contributions too.
The Government Contribution During Parental Leave
The government contribution (up to $260.72/year) is based on your own contributions, not employer contributions. If you make no contributions during parental leave, you won’t earn the government contribution for that period.
However, you can top up voluntarily before 30 June to hit the $1,042.86 threshold and earn the full government contribution, even during parental leave.
Example: Mia takes 6 months of parental leave. Her payroll contributions for the year total $700 (6 months at 3.5% of $40,000 pro-rated). Before 30 June, she makes a voluntary top-up of $342.86. Total: $1,042.86. She receives the full $260.72 government contribution.
See voluntary KiwiSaver contributions for how to make a top-up, and the KiwiSaver government contribution guide for the other conditions.
Savings Suspensions During Parental Leave
While you receive only government Parental Leave Payments, deductions from them happen only if you ask Inland Revenue for them (you can stop them at any time through myIR), so there is nothing to suspend. If your employer pays salary or wages during or after leave and you want to pause or reduce deductions from them, the KiwiSaver contribution holiday guide covers the savings suspension and the temporary rate reduction.
What Happens to Your KiwiSaver Balance During Leave?
Your balance remains invested in your chosen fund throughout parental leave. It continues to grow (or fluctuate) according to the fund’s performance — the leave has no direct impact on the investment.
If markets perform well during your parental leave, your balance will grow even without new contributions. If markets fall, your balance may dip (KiwiSaver in a recession covers what that means), which is the normal operation of an invested fund.
Returning to Work After Parental Leave
When you return to work, KiwiSaver contributions automatically restart — your employer begins deducting from your pay and making employer contributions again. No action is required from you.
If you had a savings suspension active, you can restart contributions before it ends by talking to your employer (if the change is within 3 months of the last change, your employer needs to agree); see the contribution holiday guide.
Ways to Reduce the Parental Leave KiwiSaver Gap
1. Make a voluntary top-up before 30 June Even a small lump sum top-up before the end of the KiwiSaver year ensures you earn some of the government contribution. Contributing $1,042.86 earns the full $260.72.
2. A lump sum when you return A bonus, tax refund, or savings you’ve built up can be contributed as a lump sum in your first year back — helping to fill the gap from the leave period.
3. Your employer’s policy Some employers continue full salary and therefore full KiwiSaver contributions during parental leave. Others top up the government payment. Understanding what your employer pays determines how large the KiwiSaver gap actually is.
KiwiSaver After 26 Weeks — Extended Leave
If you take extended parental leave beyond the government-paid period (up to 52 weeks total is available under NZ law, but only 26 weeks is paid by the government), you may be on unpaid leave for the additional period. The same rules apply: no salary means no deductions and no compulsory employer contributions. See also KiwiSaver on unpaid leave.