KiwiSaver Changes and April Payroll Updates: What Employers Need to Know

From 1 April, several updates come into effect that will impact payroll, employment costs, and compliance. While none are particularly complex on their own, together they’re worth reviewing now to ensure everything runs smoothly into the new financial year.

Here’s a clear overview of what’s changing - and what to check.

KiwiSaver Contribution Changes

From 1 April, KiwiSaver contribution settings are changing - and this will have a direct impact on both employer costs and payroll setup.

Default contribution rate increasing

The default KiwiSaver contribution rate for both employees and employers will increase from 3% to 3.5%. This change applies automatically unless action is taken.

Employees can remain at 3% (with approval)

Employees who wish to continue contributing at 3% can apply to Inland Revenue for a temporary rate reduction.

To apply the lower rate, employers must receive confirmation (an IRD acceptance letter) from the employee. Without this, both employee and employer contributions must be increased to 3.5%.

Employers can match the lower rate

If an employee has an approved temporary reduction, employers can match this and continue contributing at 3%.

Once the employee moves back to the higher rate, employer contributions will also need to increase accordingly. Inland Revenue will notify employers when this occurs.

KiwiSaver extended to younger employees

From 1 April, employees aged 16 and 17 who contribute to KiwiSaver will also be eligible for employer contributions.

If you employ staff in this age group, this may introduce a new cost that hasn’t previously applied.

What to do: Take a few minutes to sense-check your KiwiSaver settings in your payroll system and ensure everything aligns with current requirements.

ACC Earners’ Levy Increase

The ACC Earners’ Levy rate is increasing from 1 April, which will affect the amount deducted from employees’ wages.

This is typically applied automatically through payroll systems, but it’s still important to:

• Confirm your system has been updated with the new rate
• Check payslips in early April to ensure deductions look correct

What to do: Run a quick review after your first April pay run to ensure the updated levy has been applied accurately.

Minimum Wage Increase

Minimum wage rates are increasing from 1 April:

• Adult minimum wage: increasing to $23.95 per hour
• Starting-out and training wage: increasing to $19.16 per hour

If you have employees on or near minimum wage, their pay rates will need to be reviewed and adjusted.

What to do:

• Identify any affected employees
• Update employment agreements if required
• Ensure new rates are reflected in your first April pay run