Payroll Changes Coming in 2026 (and Beyond): What New Zealand Employers Need to Know

If you employ staff in New Zealand, there are a few important payroll changes coming up that are worth planning for early. While some of the updates happen automatically in your payroll system, they can still impact your cashflow, budgets, and employee take-home pay.

Here’s a clear breakdown of what’s changing, when it’s happening, and what it means for your business.

KiwiSaver contribution increases

From 1 April 2026

The minimum KiwiSaver contribution rate will increase from 3% to 3.5% for both employees and employers.

From 1 April 2028

The minimum rate will increase again to 4%.

What this means for employers

• You’ll need to contribute at least 3.5% from 1 April 2026
• Employees can still choose to contribute higher rates (3.5%, 4%, 6%, 8% or 10%), but you are only required to match the minimum rate.
• That extra 0.5% employer contribution may feel small, but it can add up across your team over the year, making this a good time to factor the increase into your budgets and cashflow forecasts.

Temporary KiwiSaver rate reductions for employees

Some employees may wish to temporarily remain at 3%, and Inland Revenue allows eligible staff to apply for a temporary rate reduction.

Key points for employers

• Reductions can be approved for 3 to 12 months
• Applications open from 1 February 2026
• This option is not available if the employee has a KiwiSaver savings suspension in place
• The reduced rate can only be applied once IRD confirmation is received

ACC levy increases (every 1 April)

ACC levies increase each year on 1 April. For 2026:

• The employee ACC levy will increase from 1.67% to 1.75%.
• If 1 April falls mid-week, the first pay or two can look slightly different due to part-period calculations. This is normal.

What your payroll system will handle automatically

Most modern payroll systems will automatically:

• Apply the updated KiwiSaver contribution rates.
• Adjust ESCT (Employer Superannuation Contribution Tax) rates based on each employee’s annual earnings.

Even though the system handles the calculations, employers still need to plan for the financial impact and regularly review payroll settings.

Why it’s worth planning early

These changes may seem small individually, but together they can affect:

• Payroll costs
• Cashflow
• Employee communication
• Budget planning for 2026 and beyond

A little preparation now can help you avoid surprises later.

Practical steps you can take today

• Review your payroll costs for the coming year
• Update your budgets and cashflow forecasts
• Communicate upcoming changes clearly with your team
• Check employment agreements for any agreed contribution differences

Need support?

If you’d like help reviewing your payroll setup, forecasting the impact of these changes, or communicating clearly with your team, we are here to help.

At Books & Admin, we support small business owners with payroll, bookkeeping, budgeting and cashflow planning so you can focus on running your business with confidence.

Get in touch to discuss how these changes affect your business.