How Does KiwiSaver Work?

How does KiwiSaver work
How does KiwiSaver work

A voluntary, work-based savings initiative called KiwiSaver has been designed to assist you with your long-term retirement savings.

It is essentially hassle-free, so maintaining a regular savings pattern is easy. Do you know How does KiwiSaver work?

A wide range of membership benefits is available to encourage you to start saving. Regular contributions from your employer and annual member tax credits paid by the government are included.

Selected people are also eligible for help with the deposit on their first home.

How do I make contributions?

How to make contributions
How to make contributions

For the majority of the users, KiwiSaver will be work-based. Your employer will inform you about KiwiSaver, and your contributions will come directly from your paycheck.

Once you have chosen to join, you can choose a KiwiSaver scheme rate of 3%, 4%, or 8%. Contributions will be deducted from your pay according to the rate you selected.

If you are self-employed or unemployed, you can discuss with your KiwiSaver provider and agree upon an amount you will pay directly to them each month.

KiwiSaver providers

Private sector companies called KiwiSaver providers manage certain KiwiSaver schemes. Which KiwiSaver provider you invest your money with is entirely up to you.

Your investment choices in a KiwiSaver scheme are at your own risk. The government does not guarantee KiwiSaver. See a list of some well-known providers below!









Although all of the KiwiSaver mentioned above providers may offer their own slightly customized KiwiSaver schemes, KiwiSaver works the same way for all customers. Here is the guide on how KiwiSaver works.

How does KiwiSaver work?

  • If you’re automatically enrolled, you can ‘opt out, but only between 2 and 8 weeks of starting the job. Once you have joined, you have to contribute for at least 12 months.
  • You may choose to join KiwiSaver at any time, although once you do, you can’t opt out.
  • As an employee, you can contribute 3%, 4%, or 8% of your gross (before-tax) wage or salary towards your KiwiSaver account.
  • After contributing towards your KiwiSaver for 12 months, you can take a break from saving (called a ‘contributions holiday’) or carry on.

You can make voluntary contributions such as lump sums or regular automatic payments once you have joined. You can pay this directly to the KiwiSaver provider or Inland Revenue.

Read also: Kiwis Fourth Biggest Punters in the World.

Who can join KiwiSaver?

Who can join KiwiSaver
Who can join KiwiSaver
  • a New Zealand citizen, or someone who is entitled to live in New Zealand indefinitely
  • People who usually live in New Zealand (with some exceptions)
  • Anyone below the age of eligibility for New Zealand Super, which is currently 65

You can also be:

  • Employed
  • Self-employed
  • Unemployed
  • Under 18

How can I join KiwiSaver?

The three ways to join KiwiSaver include;

  • Automatic enrolment when you start at a new job
  • Opting in through your current employed
  • Using a KiwiSaver Provider to opt-in through

KiwiSaver Benefits

KiwiSaver Benefits -how does KiwiSaver work
KiwiSaver Benefits

There are many great benefits to signing up with KiwiSaver, and they may leave you wondering, “Well, why wouldn’t I sign up?” So, by now, you must have understood how KiwiSaver works.

  • Your contribution is deducted from your pay before we see it. This makes saving easier.
  • On top of your contributions, your employer has to contribute at least 3% of your gross wage or salary into your KiwiSaver account.
  • If you are a contributing member age 18 or older, the government also pays into your KiwiSaver account. This is an annual member tax credit’ and may be up to $521.
  • You can save for retirement and use KiwiSaver to help you buy your first home through the KiwiSaver HomeStart grant and home purchase withdrawal.
  • Your KiwiSaver account moves with you according to whether you change jobs or leave the workforce.


What are the options for choosing a KiwiSaver fund type?

Explore the different fund types available within KiwiSaver schemes, such as conservative, balanced, and growth funds, and how to choose one that aligns with your risk tolerance and investment goals.

Can I switch KiwiSaver providers or funds, and how?

Detail the process for changing KiwiSaver providers or switching between funds within the same scheme, including any potential fees and considerations.

What are the implications of taking a contributions holiday?

Discuss the eligibility criteria, the application process, and how taking a break from contributions might affect the overall growth of your KiwiSaver savings.

How does KiwiSaver support first-home buyers?

Elaborate on the KiwiSaver HomeStart grant and home purchase withdrawal, including eligibility criteria, how to apply, and the benefits for first-home buyers.

What happens to my KiwiSaver if I move overseas?

Cover the rules regarding KiwiSaver accounts for New Zealanders living abroad, including contributions, withdrawals, and the impact on your savings.

How are KiwiSaver contributions taxed?

Provide an overview of the tax implications for your KiwiSaver contributions and investment earnings, including PIR rates and how taxes are calculated.

What happens to my KiwiSaver account when I retire?

Explain the options available to KiwiSaver members upon reaching the age of eligibility, including withdrawing funds, continuing to invest, and the potential benefits of each choice.

About the author

Michaela Scott

Michaela Scott

Michaela Scott stands as one of the leading voices in New Zealand's online gaming scene.

With a tenure spanning nearly a decade at PokiesMobile NZ, Michaela's contributions range from meticulously crafted game reviews to in-depth industry analysis.

Hailing from Christchurch, she brings a mix of local insights and global perspectives to her writings.

Her dedication to staying ahead of industry trends and her unparalleled expertise make her pieces both educational and enjoyable.