What Is KiwiSaver? How KiwiSaver Works in NZ

KiwiSaver is New Zealand’s voluntary workplace retirement savings scheme. Since launching in July 2007, it has grown to 3.44 million members and about $138.8 billion in funds under management (FMA, as at 31 March 2026).

This page explains what KiwiSaver is and how it works: where the money comes from, how it moves from your pay to your account, how it is invested, who runs the scheme, and when you can get it out. Each section links to the guide that covers that topic in full.

What Is KiwiSaver?

KiwiSaver is a savings scheme administered by Inland Revenue (IRD) and managed by private providers, including banks and other fund managers.

When you enrol, a percentage of every pay is automatically deducted and sent by your employer to IRD, which then forwards it to your chosen provider. Your employer adds their own contribution on top. The money is invested in the fund you select until you reach 65 (the NZ Super age) or qualify for an early withdrawal such as the first home withdrawal.

KiwiSaver is voluntary: you choose whether to join, and if you are automatically enrolled you can opt out. However, if you start a new job and are eligible (aged between 18 and 65, in a full-time or permanent part-time job or on a contract of more than 28 days, and not already a member), your employer will automatically enrol you, and you can opt out of KiwiSaver from the end of week 2 to the end of week 8 (day 56) after starting work.

Key facts:

Launched: 1 July 2007
Eligible age: any age, including children, although employer and government contributions only apply from age 16. The government contribution age dropped from 18 to 16 on 1 July 2025; compulsory employer contributions for 16 and 17-year-olds followed from 1 April 2026
Regulated by: the Financial Markets Authority (FMA); administered by Inland Revenue (IRD)
Total funds under management: about $138.8 billion (FMA, as at 31 March 2026)

How KiwiSaver Works: Three Sources of Money

Money flows into your KiwiSaver account from up to three sources, plus investment returns.

1. Your contributions

You choose a contribution rate of 3.5%, 4%, 6%, 8%, or 10% of your before-tax pay (the default rose from 3% to 3.5% on 1 April 2026). The KiwiSaver contribution rates guide shows what each rate means in dollars.

2. Your employer’s contributions

If you're aged 16 or over and under 65, in KiwiSaver and contributing from your pay, your employer must contribute at least 3.5% of your gross pay (unless you're on a temporary rate reduction or in a defined benefit scheme), less employer superannuation contribution tax (ESCT). The minimum was raised from 3% on 1 April 2026, and ESCT means the amount that reaches your account is less than the headline 3.5%. The employer KiwiSaver contributions guide covers the ESCT rates and what counts as gross pay.

3. The government contribution

The government contributes up to $260.72 per year: 25 cents for every dollar you contribute yourself, up to a maximum of $1,042.86 in contributions per year.

To get the full $260.72, you need to contribute at least $1,042.86 between 1 July and 30 June each year, which works out to around $20 per week. It applies to members aged 16 to 65 with taxable income of $180,000 or less, among other conditions. See how the KiwiSaver government contribution works.

How the Money Gets From Your Pay to Your Account

Contributions from your pay do not go straight to your provider. They pass through your employer and IRD first:

Payroll deduction. Your employer deducts your contribution from your gross (before-tax) pay, so it is a percentage of your pay before PAYE, regardless of your tax bracket.
Employer contribution. Your employer adds their contribution on top of your regular pay, less ESCT (unless your employment agreement offsets it against your gross pay, in which case your take-home pay reduces).
IRD collects the money. Your employer pays both amounts to Inland Revenue along with its regular PAYE payments.
IRD forwards it to your provider. IRD passes the contributions on to your KiwiSaver provider, which invests them in your fund.

Because of this route, IRD says it may take up to a month from the time your employer deducts contributions for them to show in your account. Contributions IRD has received but not yet passed on can show in myIR before they show on your provider’s statement. Voluntary contributions are different: you can pay them straight to your provider at any time (see voluntary KiwiSaver contributions). IRD’s role in KiwiSaver explains the rest of what Inland Revenue does.

How Your Savings Are Invested: Units and Unit Prices

Once your money reaches your provider, it is invested in the fund you have chosen. Your KiwiSaver account does not hold a cash balance: you hold units in the fund. Each contribution buys units at the current unit price, and a withdrawal sells units.

How unit pricing works

Each KiwiSaver fund calculates a unit price (net asset value per unit), typically daily. The unit price is the value of the fund’s investments (shares, bonds, property, cash) divided by the number of units on issue.

Example:

Fund holds $10,000,000 in assets
1,000,000 units on issue
Unit price = $10.00

If you contribute $1,000, you buy 100 units at $10.00 each.

If the fund’s assets grow to $12,000,000, the unit price becomes $12.00 and your 100 units are worth $1,200. If the assets fall to $8,000,000, the unit price becomes $8.00 and your 100 units are worth $800.

This is why a KiwiSaver balance goes up and down with markets, unlike a bank savings account. Percentage-based fund fees are usually built into the unit price rather than shown as a separate deduction.

Fund types

Funds differ in how much they hold in growth assets (shares, property) compared with income assets (bonds, cash):

Fund type	What it mostly holds	Risk level
Cash	Bank deposits, short-term bonds	Very low
Conservative	Mostly bonds, small share allocation	Low
Moderate	Mix of bonds and shares	Low-medium
Balanced	A mix of shares and bonds, often more shares (no fixed split)	Medium
Growth	Mostly shares	Medium-high
Aggressive	Almost all shares	High

Funds with more shares tend to rise and fall more in value from year to year. KiwiSaver fund types explained covers each type, and conservative vs balanced vs growth funds by time horizon sets out how volatility relates to the time until you need the money.

Who Runs KiwiSaver: IRD and the FMA

Two government bodies oversee KiwiSaver:

Inland Revenue (IRD) administers the scheme. IRD collects contributions from employers, passes them on to providers, keeps the central record of members, and pays the government contribution.

Financial Markets Authority (FMA) regulates KiwiSaver schemes in a similar way to other registered superannuation schemes.

If something goes wrong with your provider, making a KiwiSaver complaint explains the steps and the dispute resolution schemes.

Who Can Join KiwiSaver?

Inland Revenue says you can join KiwiSaver if you’re both:

A New Zealand citizen, or entitled to live in New Zealand indefinitely, and
Living, or normally living, in New Zealand

You cannot join if you have a temporary, visitor, work or student visa.

You can join at any age, including children and retirees, though certain rules apply to each group (see KiwiSaver for kids).

People on temporary visas: KiwiSaver on a work visa explains how the residence rules apply.

Self-employed and contractors can join KiwiSaver but do not receive employer contributions: all contributions come from their own income. See KiwiSaver for the self-employed.

Moving from Australia: Australian superannuation can be transferred to KiwiSaver under a trans-Tasman agreement. See KiwiSaver transfers from Australia.

How to Join KiwiSaver

If you are eligible (aged 18 to 65, not already a member, and in a full-time or permanent part-time job or on a contract of more than 28 days), you are enrolled automatically when you start a new job (unless you opt out between the end of week 2 and the end of week 8). Otherwise you can join by asking your employer or by signing up directly with a KiwiSaver provider. How to enrol in KiwiSaver walks through each route, and re-enrolling in KiwiSaver covers people who opted out earlier.

If you do not choose a provider, IRD allocates you to one of the default providers (or to your employer’s chosen scheme, if they have one), and your money goes into that provider’s default fund (see the KiwiSaver default fund).

KiwiSaver Providers

New Zealand has around 30 KiwiSaver scheme providers, from the big banks (ANZ, ASB, BNZ, Westpac) to specialist fund managers (among them Booster, Fisher Funds, Kernel, Milford, Pathfinder and Simplicity). Kiwibank no longer runs its own KiwiSaver scheme: it sold its former Kiwi Wealth business, including its KiwiSaver scheme, to Fisher Funds in 2022 and now refers customers to Fisher Funds (see what changed for Kiwibank KiwiSaver members).

Providers differ on facts you can check: annual fees, the range of funds offered (including ethical options), past returns (which do not guarantee future returns), and their online tools. KiwiSaver provider reviews set out each provider’s figures, head-to-head KiwiSaver comparisons put pairs side by side, and a KiwiSaver provider comparison table lists them all.

KiwiSaver Fees

KiwiSaver funds charge a percentage-based management fee and some also charge a fixed annual member fee or performance fees, all of which reduce your returns. KiwiSaver fees explained breaks down each type, and the KiwiSaver fees section compares them.

KiwiSaver and Tax

Your KiwiSaver scheme might be a Portfolio Investment Entity (PIE). If it is, it is taxed under the PIE tax rules, so your investment income is taxed at your Prescribed Investor Rate (PIR), capped at 28%, rather than your marginal income tax rate. The KiwiSaver PIR rate explained shows the income thresholds for each rate, and the KiwiSaver tax section covers the rest.

Using KiwiSaver to Buy Your First Home

After 3 years of KiwiSaver membership, you may be able to withdraw most of your balance (leaving at least $1,000) to buy your first home, as long as it is a home you will live in. The KiwiSaver first home withdrawal guide covers eligibility, how much you can withdraw and how to apply.

When Can You Access KiwiSaver?

KiwiSaver is designed to be locked in until age 65, the age you become eligible for NZ Super. There are several situations where you can access it earlier:

Scenario	Available?
First home purchase (after 3 years)	Yes
Significant financial hardship	Yes, subject to the hardship criteria
Serious illness or life-shortening congenital condition	Yes, if it meets IRD’s health criteria
Living overseas (not Australia)	Yes, most of your savings (not the government contributions), after 1 year overseas
Transferring to Australian super	Yes, if you move permanently to Australia
Death	Paid to estate
Redundancy alone	Not a listed reason by itself (hardship rules may apply)
Buying an investment property	No

The KiwiSaver withdrawal rules cover every early-access scenario. At 65 your account does not close automatically: you can withdraw all of your savings or leave them invested (some providers also allow partial withdrawals) (what happens to KiwiSaver at 65).

Changing or Pausing Your KiwiSaver

Contribution rate: you can change your rate through your employer (payroll or a KS2 form), myIR or your KiwiSaver provider, usually once every 3 months. A temporary rate reduction to 3% is available for 3 months to a year if you apply.
Stopping contributions: once the opt-out period has passed (or if you joined directly with a provider) you cannot leave KiwiSaver, but after 12 months of membership (or earlier if you show financial hardship) you can apply for a savings suspension of 3 months to 1 year. While it applies, your employer is no longer required to contribute. See the KiwiSaver contribution holiday (savings suspension).
Fund: you can switch funds with your provider; your units are sold in the old fund and bought in the new one (changing your KiwiSaver fund type).
Provider: you can switch providers at any time; the new provider arranges the transfer, IRD says it takes about 2 weeks, and your old provider may charge a transfer fee (switching KiwiSaver providers).
Checking your balance: your provider’s app or website shows your invested balance; myIR shows your contributions and provider (how to check your KiwiSaver balance).

A Getting-Started Checklist

If you are new to KiwiSaver, these are the things to look up:

Confirm you are enrolled: check myIR or ask your employer
Find out your provider: myIR shows your provider’s name (finding a lost KiwiSaver account)
Check your fund type: your provider’s app or website shows which fund you are in
Check your contribution rate: your payslip shows the rate being deducted
Check your contributions before 30 June: to see whether you have reached the $1,042.86 needed for the full government contribution

Things Members Commonly Miss

The opt-out window closes at day 56. After the end of week 8 in a new job you can opt out only in limited situations (IRD can accept a late opt-out in some cases, up to 3 months after it gets your first contribution); otherwise contributions can only be stopped with a savings suspension.
Default fund members are in a fund chosen for them. If you were allocated to a default provider and never chose a fund, you are in that provider’s default fund.
Low contributions can fall short of the government contribution threshold. Someone contributing only 3.5% from their pay needs to earn at least about $29,796 over the KiwiSaver year to reach $1,042.86; a voluntary top-up before 30 June makes up any gap.

KiwiSaver Calculators

Retirement savings calculator: project your KiwiSaver and other savings at retirement
PAYE calculator: see the KiwiSaver deduction from your pay at each contribution rate
KiwiSaver first home withdrawal amount: estimate how much you could withdraw for a first home
Average KiwiSaver balance by age: compare balances with NZ averages

Frequently Asked Questions

Is KiwiSaver compulsory in NZ? No. KiwiSaver is voluntary. However, eligible new employees (aged 18 to 65, in a full-time or permanent part-time job or on a contract of more than 28 days, and not already members) are automatically enrolled when they start a job and can opt out from the end of week 2 to the end of week 8 (day 56) after starting work. IRD may accept a late opt-out in limited situations, up to 3 months after it gets your first contribution.

Can I access my KiwiSaver before 65? Yes, in limited circumstances: first home purchase (after 3 years), significant financial hardship, serious illness or a life-shortening congenital condition, or moving overseas permanently (to a country other than Australia; if you move permanently to Australia you can transfer your savings instead). Redundancy is not a listed reason by itself, though the hardship rules may apply.

How much should I contribute to KiwiSaver? The default is 3.5% (raised from 3% on 1 April 2026). Your employer’s compulsory contribution is the same 3.5% minimum whichever rate you choose, unless you are on a temporary rate reduction, when your employer can lower it to 3%. How much to contribute to KiwiSaver sets out what each higher rate costs and adds.

What happens to my KiwiSaver if I lose my job? Your balance stays in your account with your chosen provider. After 12 months in KiwiSaver (earlier if you can show financial hardship), you can apply for a savings suspension of 3 months to 1 year. Being made redundant is not itself a reason to withdraw (see KiwiSaver and redundancy), but if you are in significant financial hardship you can apply to your provider for early release.

What happens to my KiwiSaver if I change jobs? Your KiwiSaver account stays with your provider: it is yours, not tied to your employer. Give your new employer your contribution rate (through payroll or a KS2 form). If you have more than one job, see KiwiSaver with multiple employers.

Can my employer contribute more than 3.5%? Yes. Some employers contribute more than the 3.5% minimum; your employment agreement says what yours pays.

Why does my KiwiSaver balance go down sometimes? Your savings are held as units in an investment fund. When the value of the fund’s shares, bonds and other assets falls, the unit price falls and so does your balance.

Does KiwiSaver earn interest? Not in the way a bank account does. Your balance changes with the value of the fund’s investments (share prices, dividends, interest from bonds), not a fixed interest rate.

What is the KiwiSaver government contribution? It is the government’s contribution to your KiwiSaver: 25 cents for every $1 you contribute, up to $260.72 per year (halved from 50 cents and a $521.43 cap on 1 July 2025). To receive the full amount, you need to contribute at least $1,042.86 between 1 July and 30 June, and have taxable income of $180,000 or less.

What is the difference between KiwiSaver and NZ Super? NZ Super is the government pension paid from 65 to people who meet its residency rules, whatever their savings. KiwiSaver is a separate scheme where you build up your own balance. You can receive both from age 65 (KiwiSaver and NZ Super).

Can I use KiwiSaver to buy an investment property? No. The KiwiSaver first home withdrawal can only be used to purchase a home you intend to live in. It also has to be your principal place of residence, so it cannot be used for an investment property or a holiday home.

What happens to KiwiSaver when I die? Your KiwiSaver savings become part of your estate when you die. See the KiwiSaver death benefit guide.

Is KiwiSaver taxed at 65? No. Your withdrawal at 65 is not subject to income tax. If your scheme is a PIE (all the default schemes are), tax on investment earnings has been paid inside the fund at your PIR throughout the life of the account. See whether KiwiSaver is taxed at 65.

This page is general information, not financial advice. For advice on your own situation, the FMA’s guide to getting financial advice explains how to find a licensed adviser.