How To Increase KiwiSaver Contribution – All You Must Consider

Do you want the maximum KiwiSaver contribution? Are you getting the full KiwiSaver government contribution each year? Or maybe you want to learn how to increase KiwiSaver contribution gradually at an achievable and sustainable level over time.

Below, you can find the answers you are seeking and more. 

An Introduction On Maximum KiwiSaver Contribution 

There are multiple ways of how to increase KiwiSaver contribution, and we’ll discuss some of them here. This article focuses on what you can do directly to boost your maximum KiwiSaver contribution regardless of fund performance. In particular, we will break down the best times to consider making additional contributions in correlation with your goals.

One of the first decisions you need to make when signing up for KiwiSaver is your contribution rate. Most of your KiwiSaver contributions will usually be deducted from your salary or wage. The minimum rate is 3% of your pre-tax salary which is also labeled as the default rate. However, if you wish to, you can contribute as much as 10% of your salary which is your maximum KiwiSaver contribution in that aspect. 

You can also take advantage of the yearly KiwiSaver government contribution. This is automatically added to your account each year if you meet certain criteria. You can read more about it below and find out just how much you can gain from the KiwiSaver government contribution.

Moreover, we will discuss the ability to make voluntary contributions that directly answers how to increase KiwiSaver contribution. It enables you to go beyond the maximum KiwiSaver contribution set at 10% of your salary. This can be a great way to strengthen your financial position in retirement but may not be right for everyone. We will go over a few scenarios where a maximum KiwiSaver contribution make sense and in others not so much.

Lastly, we consider your spending habits and how a maximum KiwiSaver contribution can have both favourable and unfavourable consequences.

There is no cookie-cutter model on how to increase KiwiSaver contribution. However, National Capital works hard to keep up to date with the latest performance data. Based on this and your own circumstances, we’re able to provide you with free KiwiSaver recommendations.

Your Goals & The Best Times To Consider How To Increase KiwiSaver Contribution

There are two points in your life where it makes the most sense to consider how to increase KiwiSaver contribution. That is not to say it’s a bad idea at any other time. But rather point out this is likely the best time as you plan to achieve specific goals in your life.

Firstly, when you’re 18 or just started working you may consider increasing your maximum KiwiSaver contribution rate as high as possible. You can also look to make additional lump-sum payments with any savings you have accumulated. Why? Well, this is probably the best time to aggressively start saving for a house deposit. Generally speaking, a young adult with lower financial responsibilities and debt, could afford to make the maximum KiwiSaver contribution, which is 10% of salary automatically. It has become increasingly difficult for first-time buyers to get into the property market. Therefore, setting the goal as a young adult and actively working towards it will help make it more attainable. And, KiwiSaver is a very good tool to use to build your deposit. It also ensures you’re always meeting the threshold to get the KiwiSaver government contribution from an early age. So, if you’re researching how to increase KiwiSaver contribution at an early age, props to you.

Secondly, you should evaluate your financial situation at least five years before retiring. You need to take into consideration every cost associated with financial freedom post-retirement. Will you have enough to enjoy the lifestyle you’re comfortable with? Will you need to cut back on some of your preferred activities and purchases? Is there something you can do now that will help secure your financial future? The answer is yes, and your investment is intended to be one of your solutions. If you aren’t happy with your account balance at this life stage, it may be time to increase towards the maximum KiwiSaver contribution you can.

3%, 4%, 6%, 8% Or More? How to Increase KiwiSaver Contribution?

As mentioned above, when setting up KiwiSaver, you will be asked to choose a contribution rate. This means that a percentage of pre-tax income will be deducted from your salary and transferred to your account. Unless you want to contribute more and opt for the maximum KiwiSaver contribution, your default contribution is set at 3% before tax. As an employee, this is relatively straightforward, as your employer will automatically deduct contributions each pay period. If you are self-employed or under other circumstances, you should talk directly to your scheme provider.

As an employee, you can also choose to contribute 4%, 6%, 8%, or 10%. As we will touch on below, this choice depends largely on your goals, circumstances, and spending habits. However, you do have the ability to change between rates as long as you meet the minimum 3% requirement. When you’re thinking of how to increase KiwiSaver contribution at a later date, simply speak with your employer or manager to change the deduction rate on your behalf.

Your pre-tax pay as an employee is your salary/wages, including any of the following:

• Allowances
• Bonuses & Commissions
• Extra Salary, Overtime & Gratuities
• Any other pre-tax payment of any kind

KiwiSaver contributions deducted from your salary will continue if you are on regular paid leave or employer-paid parental leave. If you are on government-paid parental leave or general unpaid leave, your contribution will stop automatically. You can keep them going by completing a KS2 form and getting in touch with Inland Revenue and your provider.

Your Employer Has To Contribute Too

As a KiwiSaver member who contributes from your pay, generally speaking, your employer has to contribute too. Your employer must contribute at least 3% of your gross pay unless you’re under 18, not making contributions, or not meeting the eligibility criteria. Depending on your remuneration package with your employer, they can choose to make voluntary contributions above the required 3%. Therefore, negotiations of your remuneration is another way of how to increase KiwiSaver contribution overall.

Regular contributions of at least 3% allow you to maximise the KiwiSaver government contribution and employer contributions into your account.

Getting The KiwiSaver Government Contribution

Each year after joining KiwiSaver, the KiwiSaver government contribution is directly added to your account up to $521.43. Although that is changing to $260.72 a year in 2026. Therefore, this year is your last chance to receive the KiwiSaver government contribution at the rate of $521.43. If you meet certain criteria, you do not need to do anything to claim the KiwiSaver government contribution. Your KiwiSaver provider will do this automatically for you.

To qualify for the KiwiSaver government contribution each year, you must have contributed at least $1042.86 yourself. As long as it is done between the 1st of July and the 30th of June, frequency doesn’t matter.

You can contribute in three ways:

• Salary or wage deductions
• Direct payments to Inland Revenue
• Direct payments through your KiwiSaver provider

If you don’t contribute regularly but would like to take advantage of the KiwiSaver government contribution you still can. Allow for processing time and make a lump sum payment of $1,042.86 before the 30th of June. It’s as easy as that. Of course, you need to have been registered with a KiwiSaver scheme for over a year. It is also worth mentioning to take advantage of the KiwiSaver government contribution while it is still here. As we have seen in the last change, the KiwiSaver government contribution dropped in half and could be gone entirely in the future. 

Getting A Partial KiwiSaver Government Contribution

You can still get a partial KiwiSaver government contribution without the minimum $1042.86 needed. If you have contributed less than that, you can still get 50 cents for every dollar you put in. For example, if I have contributed $500 to my account this year, I would get a $250 KiwiSaver government contribution.

If you turned 18 or joined KiwiSaver partway through the year, you won’t be eligible for the full KiwiSaver government contribution. It will instead be based on how many days you’ve been a member or since you’ve turned 18 within the year.

Typically, if you qualify, you should see the KiwiSaver government contribution in your account by the end of July. With delays, it may take until the end of August at the latest.

For the most up-to-date information on the KiwiSaver government contribution, you can check out IRD’s webpage on the topic.

How the KiwiSaver Government Contribution can Turn Into $138,000 at Retirement

KiwiSaver Government contribution is a great way to earn rewards for contributing towards your retirement or first home savings. The Government contribution may only be $260.72 per year, but that is a lot of money over time. Especially if you’re wondering how to increase KiwiSaver contribution. Below is a case study on how KiwiSaver government contribution can have a significant impact on your retirement savings. 

Sam is a self-employed contractor at 20 years old. As a self-employed contractor, he doesn’t need to contribute to his fund from his pay and he doesn’t receive any employer contributions. But, he is interested in making the most of other available benefits, and get the maximum KiwiSaver contribution from the government.

For every year that Sam contributes at least $1,042.86 to his account between 1 July and 30 June, the Government will pay $260.71 to his account. Because Sam is self-employed and doesn’t make employee contributions through his pay, he decides to set up a regular direct debit for $20.55 each week so he doesn’t have to worry about finding the money at short notice.

If Sam continues to receive the maximum KiwiSaver contribution from the Government from age 20 until he is 65, the total KiwiSaver Government contribution in his account could add up to $12,000 at age 65. That’s $12,000 from the Government that he wouldn’t have otherwise received if his money was invested elsewhere and a great way on how to increase KiwiSaver contribution.

When Sam’s own contributions and the returns he could expect from his investment in a balanced fund with a return of 3.5% each year are added to the KiwiSaver government contribution, he’d have an estimated $138,000 in his account when he turns 65 – just from contributing $20.55 per week from age 20.

Assumptions on how to increase KiwiSaver contribution:

• Calculations are rounded to the nearest 1,000.
• Sam receives the KiwiSaver government contribution appropriate to his contributions and at today’s levels only.
• Where they haven’t been adjusted for the effect of rising prices over time (that is, inflation), in which case the amount does not reflect the ‘real’ buying power in the future.
• After fees, the fees used are an industry average for the fund type that may not reflect all fees.
• The returns are gained by a balanced fund with a yearly return after fee rate of 3.5%.
• Sam’s Birthday is July 1st, with projected savings calculated in July.

The KiwiSaver government contribution can increase your savings substantially, and with it being harder to live off of NZ Superannuation, this is an excellent opportunity. To learn more about your maximum KiwiSaver contribution and help securing your future complete a KiwiSaver Healthcheck.

Voluntary Contributions – Beyond The Maximum KiwiSaver Contribution

At any time, you may want to top up your account with voluntary contributions. These contributions can come in lump-sum payments or at regular intervals. That is completely fine and you are able to do voluntary payments directly through your scheme provider. That is the quickest way to transfer and see your additional contribution on your account balance. However, you can also make payments through your Inland Revenue account.

Most KiwiSaver providers will also accept regular top-up payments to your KiwiSaver. These are essentially the same as one-off payments but set in regular intervals of your choosing. Typically, you can choose to make payments every week, fortnightly, or monthly intervals through a direct debit. Essentially an additional way of how to increase KiwiSaver contribution at regular intervals.

You must keep in mind that once you’ve made a voluntary payment, it’s locked in until you’re eligible to withdraw. Therefore, you can’t pull out your savings until you are eligible. Typically, when purchasing a first home, reach the retirement age, or encounter significant financial hardship. Nonetheless, this is a way to increase your maximum KiwiSaver contribution beyond the automatic salary deductions.

Your Spending Habits & The Downside Of The Maximum KiwiSaver Contribution Strategy

If you don’t have a monthly budget, your money will disappear, and you won’t know where it went. Something here and a little there adds up and spending without a plan can put pressure on your finances. Additional KiwiSaver contributions can help you create a better structure and plan with your money.

As we’ve mentioned before, you can only withdraw your funds under very limited circumstances. Unlike your savings account, you can’t just withdraw small amounts here and there when you want to. For this reason, it may just be the best way to save more money. There isn’t a temptation to yo-yo money in and out because the system doesn’t allow for it. Thus, if you want to save more but struggle with the temptation of accrued wealth, maximum KiwiSaver contribution is worth considering.

Self-discipline is hard to come by and we can all slip up sometimes. I can certainly vouch for one too many convenient food delivery orders now and again. Therefore at certain times where you are working towards buying your first home or retirement, the structure in place helps.

If you’re already a good saver you may consider other forms of investments. However, at the two life stages touched on above, adding to your KiwiSaver egg nest is one of the best ways to narrow your focus and reach your goals.

However, this is really a double-edged sword. We’ve established you can only withdraw your contributions when purchasing your first home or hit the age of retirement. Thus, if another investment opportunity does come along and you need to withdraw this capital, you can’t do so. Making it the counter-argument when considering how to increase KiwiSaver contribution.

Conclusion – How to Increase KiwiSaver Contribution

To conclude, there are three ways of increasing your maximum KiwiSaver contribution. Increasing your personal contribution rate, taking advantage of the KiwiSaver government contribution and employer contributions, and additional voluntary payments. Each one of these methods impacts the other two directly or indirectly.

We discussed the two best moments to consider increasing your maximum KiwiSaver contribution. One is during your young adulthood if your goal is to buy your first property. The second is around five years before retirement to ensure you’re comfortable with your lifestyle beyond retirement. That is not to say, those are the only times where you should consider how to increase KiwiSaver contribution. If you are in a position in your life to invest excess capital, KiwiSaver is always a great option.

Lastly, we can’t ignore the downside of making the maximum KiwiSaver contribution. Your savings are essentially stuck in there until you are either buying your first home or retiring. Can that money be better invested elsewhere?

This article, in particular, has focused on the methods and important life stages when considering how to increase KiwiSaver contribution. We have not mentioned market trends or dived too deep into unique circumstances. However, you can complete our short questionnaire to get KiwiSaver recommendations tailored to you. If you wish, you can then opt-in to a free call with one of our advisors. You may even consider switching KiwiSaver schemes to one more aligned with your goals and we’re here to help.