How Much Should I Contribute to KiwiSaver?

Employees choose a contribution rate set as a percentage of their pay, and your employer contributes as well. A sensible starting point for many people is the rate that captures the full employer and government contributions they are entitled to, then increasing it if their budget allows. The right rate balances building your balance with what you can comfortably afford now.

What are my contribution options?

If you are an employee, you select your contribution from a set range of percentages of your before-tax pay, and it comes out automatically. If your circumstances change, you can usually adjust the rate. The current set of available rates can change, so it is worth checking what applies at the time you decide.

How do employer and government contributions work?

On top of your own contributions, employers generally contribute too, and members who meet the criteria may also receive an annual government contribution. These extra contributions are part of what makes KiwiSaver attractive, so many people make sure they are contributing enough to receive everything they are entitled to.

What if I am self-employed or not currently working?

If you are self-employed or not in paid work, contributions are not taken automatically from a salary, but you can still contribute directly. Some people set up regular payments to keep their KiwiSaver growing and to remain eligible for any contributions that apply to their situation.

Does a higher contribution rate really make a difference?

Over a long working life, even a modest difference in your contribution rate can have a meaningful effect on your final balance, because contributions and any returns build on each other over time. That said, the rate still needs to be affordable, so it is a balance rather than simply “more is always better”.

Can I change my contribution rate later?

In most cases, yes. People often review their rate when their income changes, when they are saving hard for a goal such as a first home, or when they are thinking further ahead about retirement. A periodic check helps keep your contributions in step with your plans.

If you would like help thinking through your KiwiSaver contributions, our KiwiSaver page explains how we can help.

The information in this article is general information only and is not intended as financial, medical, health, tax or other advice. It does not take into account any individual’s personal situation or needs. You should consider obtaining professional advice from a financial adviser and/or tax specialist in relation to your own circumstances and before acting on this information.