🕊️ Financial PlanningKiwiSaver explained: contributions, funds and withdrawals
KiwiSaver is a voluntary work-based savings scheme that most employed New Zealanders are part of. You contribute a percentage of your pay, your employer contributes on top, and the government adds an annual contribution. The money is invested in a fund of your choice and locked away — with two main exceptions — until age 65. Because you contribute from every pay over a working life, KiwiSaver is the main way New Zealanders build wealth on top of NZ Super. This guide covers how it works and the decisions that matter.
The three contributions
If you are an employee, you choose an employee contribution rate — 3%, 4%, 6%, 8% or 10% of your gross pay. Your employer must contribute at least a matching percentage (rising in steps from 3% towards 4% by 2028), less employer super contribution tax. The government adds 25 cents for every dollar you contribute during the KiwiSaver year (1 July to 30 June), up to a maximum of $260.72 — which you get in full if you contribute at least $1,042.86 in the year. The government contribution is not paid to those aged 65 and over, or on income above $180,000.
If you are self-employed or not working, you can still contribute directly to get the government contribution and keep the money invested. Contributing at least $1,042.86 a year to claim the full $260.72 is one of the best-value moves available.
Choosing a fund
Every KiwiSaver provider offers funds at different risk levels — from defensive and conservative through balanced to growth and aggressive. The right choice depends mainly on how long until you need the money. For retirement decades away, a growth or aggressive fund has historically produced the most, despite bigger short-term falls. If you plan to withdraw for a first home in the next few years, a conservative or cash fund protects the deposit from a market drop.
Fees matter a lot over decades — compare the annual fee between providers for the same risk level, using the standardised fund updates and the Sorted fund finder. Switching providers or funds is free and has no tax consequence. The default funds new members are placed in are now balanced-type, low-fee funds, but it is still worth making an active choice.
When you can withdraw
You can withdraw your full KiwiSaver balance from age 65 (provided you have been a member for at least five years if you joined between 60 and 65). Before 65, the main early withdrawal is for a first home: you can take out most of your balance (leaving $1,000) towards buying your first home, if you have been a member for at least three years.
There are also limited withdrawals for significant financial hardship, serious illness, or permanent emigration (other than to Australia, where your KiwiSaver can transfer to an Australian scheme). Hardship withdrawals are assessed case by case and are not a substitute for an emergency fund.
Frequently Asked Questions
- How much do I need to contribute to get the full government contribution?
- At least $1,042.86 in the KiwiSaver year (1 July to 30 June) to receive the maximum government contribution of $260.72. For most employees on the 3% rate, normal contributions already exceed this; if you are self-employed or not working you can top up before 30 June.
- Can I use KiwiSaver to buy my first home?
- Yes. After three years of membership you can withdraw most of your balance (leaving $1,000) towards a first home. You may also qualify for a First Home Loan with a 5% deposit through a participating lender. The old First Home Grant was closed to new applications in 2024.
- What happens to my KiwiSaver if I move overseas?
- If you move to Australia, your KiwiSaver can be transferred to an Australian complying super fund. If you move elsewhere permanently, you can apply to withdraw your balance (less the government contributions) 12 months after leaving, or leave it invested until 65.
Informational content, not financial, tax or legal advice. Check amounts, limits and current rules directly with the official sources (Work and Income, the Reserve Bank of New Zealand, Inland Revenue, the Depositor Compensation Scheme) before making a decision.
