Key features of KiwiSaver

KiwiSaver is a voluntary savings scheme designed to help New Zealanders save for the future.

If you're employed, you can currently contribute 2%, 4% or 8% of your gross wage or salary to KiwiSaver. Use our Quick KiwiSaver calculator to work out how much that would be each pay, and what you may have saved by age 65.

You are also entitled to a compulsory employer contribution of 2% of your gross salary.

Note: In Budget 2011 the government announced several changes to KiwiSaver it intends to introduce over the next two years, including raising the minimum employee and employer contribution rates from 2% to 3%.

Here are some of the current key features of KiwiSaver:

• You don't have to be working to join
• You don't have to join
• If you do join, you can build a nest egg for retirement
• You can take KiwiSaver with you
• You get a kick-start of $1,000 when you join
• You get up to another $521 each year from the government
• Your employer has to contribute also
• You may get help buying your first home
• You can choose where your money’s invested

You don't have to be working to join

To be eligible to join KiwiSaver you don't have to be employed but you do have to be:

• a New Zealand citizen, or entitled to live in New Zealand indefinitely; and
• living or normally living in New Zealand; and
• under the age of eligibility for NZ Super (currently 65).

You can't join KiwiSaver if you hold a temporary, visitor or student permit.

You don’t have to join

KiwiSaver membership is voluntary. If you’re 18 or over and start a new job you’ll be automatically enrolled in KiwiSaver (with some exceptions). 

If you are automatically enrolled you can ‘opt out’ if you wish. Once you join you have to contribute for at least 12 months. You can choose to ‘opt in’ at any time.

If you do join, you can build a nest egg for retirement

If you're an employee, every time you’re paid, an amount equal to either 2%, 4% or 8% (you select the amount) of your before-tax pay will be deducted from your take-home pay and sent to your KiwiSaver account.

Budget 2011 change: The government intends to raise the minimum 2% contribution rate to 3% from 1 April 2013.

After paying in for 12 months you can take a contribution break or carry on. It’s a long-term savings scheme and you can’t touch your money (with exceptions) until the eligibility age for NZ Super (currently 65). If you’re between 60 and 64 years old when you join, you can’t touch the funds for 5 years.

You can take KiwiSaver with you

If you change jobs or leave the workforce your KiwiSaver account goes with you. 

You get a kick-start of $1,000 when you join

You can’t touch the $1,000 until the age of eligibility for NZ Super (currently 65) or after 5 years, if you were between 60 and 64 years old when you joined. The $1,000 will be paid into your account after about 3 months.

You get up to another $521 each year from the government

If you're 18 or over you'll get a government contribution called a "member tax credit" of 50c for every $1 you contribute, up to a maximum of $521 per year, and depending on how long you've been a member.

The tax credit is paid into your KiwiSaver account annually some time after 30 June depending on when your scheme provider claims the credit on your behalf from Inland Revenue. You don't have to do anything, it will be paid automatically. You'll find general information about the member tax credit at www.kiwisaver.govt.nz.

Your employer has to contribute also

Your employer has to match your contributions to KiwiSaver, at a minimum of 2% of your pay.

If your employer already contributes to another superannuation plan in your name that amount may be offset against this compulsory KiwiSaver contribution.

Your employer may contribute more than these amounts. Employer contributions in amounts that match yours are currently tax-free up to a limit of 2% of your before-tax pay.

Budget 2011 change: All employer contributions will be subject to tax from 1 April 2012. However, the government also intends to increase the minimum employer contribution rate to 3% from 1 April 2013.

You may get help buying your first home

When you buy your first home you may be able to make a one-off withdrawal of all contributions and earnings on that money, except the original $1,000 ‘kick-start’ and the member tax credit (those amounts generally have to stay in KiwiSaver until you're eligible for NZ Super). 

You will need to have been a KiwiSaver member for at least 3 years to make a home purchase withdrawal.

The government may also give you another $1,000 for every year you contribute to KiwiSaver (minimum $3,000 after 3 years, maximum $5,000 after 5 or more years) to go towards buying your first home. Eligibility criteria apply. The first home subsidy is administered by Housing New Zealand - visit their website for more information.

Qualification for a home purchase withdrawal and subsidy may be available to previous home owners if you're in the same financial position as a first home buyer.

You can choose where your money’s invested

If you prefer, you can choose the organisation your KiwiSaver funds are sent to and the type of investment option for your savings. See Funds and schemes to find out which organisations are involved in KiwiSaver.  

If you would rather not choose, your employer may have selected a preferred organisation which they’ll send the money to. Otherwise the government will automatically allocate you to one of six default providers.