KiwiSaver - How KiwiSaver works & why it's worth joining

What is KiwiSaver?

KiwiSaver is a voluntary savings scheme set up by the government to help New Zealanders to save for their retirement.

You can choose to contribute 3%, 4% or 8% of your gross (before tax) wage or salary to our KiwiSaver account. Your employer has to contribute as well – at least 3% of your gross salary.

Along with KiwiSaver employer contributions, there’s an annual KiwiSaver government contribution.

Your funds are invested on your behalf by the KiwiSaver provider of your choice. If you don’t choose a provider Inland Revenue will assign you to one of the nine default KiwiSaver schemes. 

Who can join KiwiSaver

• A New Zealand citizen, or entitled to live in New Zealand indefinitely.
• Living or normally living in New Zealand.
• Under the age of eligibility for NZ Super (which is currently 65 years).

Find out more about who can and can’t join KiwiSaver on the Inland Revenue KiwiSaver website.

How to join KiwiSaver

• Automatic enrolment when starting a new job
• Opting in through your employer
• Opting in through a KiwiSaver provider

Self-employed? Not currently working? Not a problem – just contact a KiwiSaver provider to sign up and arrange a regular contribution amount. For a list of KiwiSaver providers, see the Inland Revenue KiwiSaver website.

Also, find out more about how to join KiwiSaver on the Inland Revenue KiwiSaver website.

Benefits of KiwiSaver

• KiwiSaver contributions come out of your pay before you see it. This makes saving easy.
• If employed, your employer has to contribute at least 3% of your gross wage or salary into your KiwiSaver account. That’s on top of your own contributions.
• The government pays into your KiwiSaver account as well – an annual ‘member tax credit’ (if you are a contributing member aged 18 or over) of up to $521.
• As well as saving for retirement, you can also use KiwiSaver for buying your first home through a KiwiSaver HomeStart grant and home purchase withdrawal.
• If you change jobs or leave the workforce your KiwiSaver account moves with you.
• If you experience hardship it is possible to access the funds in your account.

How does KiwiSaver work?

No one has to join KiwiSaver. But if you’re 18 or over and start a new job you’ll be automatically enrolled in KiwiSaver (with some exceptions). And that’s usually a good thing!

Here's how KiwiSaver works: 

• If automatically enrolled you can ‘opt out’ (leave KiwiSaver), but only between 2 and 8 weeks of starting a job. Once you join you have to contribute for at least 12 months. (If you’re 18 or younger and have been incorrectly enrolled, you can still opt out through Inland Revenue.)
• You can choose to ‘opt in’ (join KiwiSaver) at any time – although once you do, you can't opt out – either through your employer or through a KiwiSaver provider.
• As an employee, you can choose to contribute 3%, 4% or 8% of your gross (before-tax) wage or salary to your KiwiSaver account. 
• After 12 months in KiwiSaver you can take a break from saving (called a ‘contributions holiday’) or carry on.

Once you’ve joined, you can make voluntary contributions (lump sums or regular automatic payments) at any time, either directly to your KiwiSaver provider or through Inland Revenue. 

Guide to managing my KiwiSaver account

Saving for a first home

In addition to a KiwiSaver savings withdrawal, there’s also the KiwiSaver HomeStart grant. If eligible, the government may also give you up to $5,000 towards buying an older, existing home, or up to $10,000 towards buying a new home or land to build a new home on.

Visit the Housing New Zealand website for more information.

Saving for retirement

Choosing a KiwiSaver fund

Each fund has a different mix of things it invests in – such as bank deposits, bonds, shares and property.

KiwiSaver: which fund suits?

To get the results you’re after, select a fund that works for you. The KiwiSaver fund finder helps compare funds to match your situation.

Where to go for help

• Inland Revenue KiwiSaver website: Everything there is to know about the KiwiSaver scheme
• Housing New Zealand website: Using KiwiSaver to help buy a first home
• Investment advice: Talk to a KiwiSaver provider or an authorised financial adviser about the investment options on offer.
• Financial Markets Authority website: KiwiSaver regulations and international transfer information