KiwiSaver Government Contribution 2026: What $260.72 Means for You (NZ)

From 1 July 2025 the government contribution halved to $260.72. Here is exactly how much to put in ($1,042.86), who the $180,000 rule now shuts out, and whether it is still worth chasing.

Written by Henry Smith (Financial Adviser). Reviewed by Craig Smith (Principal Adviser, FSP712931). Last reviewed 16 June 2026.

TL;DR: From 1 July 2025 the maximum KiwiSaver government contribution halved to $260.72 (down from $521.43). To get the full amount you must put in $1,042.86 of your own money between 1 July and 30 June. People earning over $180,000 a year no longer qualify at all ¹²⁴.

Key takeaways

• The maximum government contribution is now $260.72 a year, down from $521.43 ¹.
• You still need to contribute $1,042.86 of your own money to get the full amount — about $20.06 a week or $87 a month ²⁷.
• A new $180,000 income cap shuts high earners out completely ⁴.
• It is still an instant 25% on the money you put in, before your fund earns a cent ⁸.

Previously, putting in $1,042.86 of your own money before the end of June earned a $521.43 government top-up. From 1 July 2025 the maximum government contribution is $260.72, down from $521.43, and a new income cap shuts some people out entirely ¹.

This guide breaks down what changed, how much you now need to contribute to get the full amount, who misses out, and whether the smaller amount is still worth contributing for.

What changed on 1 July 2025?

The match was halved: the government now pays 25 cents per $1 you contribute, to a maximum of $260.72 a year, down from 50 cents and $521.43 ¹.

The KiwiSaver government contribution (the payment some people still call the "member tax credit") used to match 50 cents for every $1 you contributed, up to a maximum of $521.43 a year. From 1 July 2025 that match was halved to 25 cents for every $1, and the maximum was cut to $260.72 ¹.

Nothing else about the mechanics changed. The contribution year still runs 1 July to 30 June. The amount of your own money you need to put in to max it out is still the same. What changed is the size of the reward at the top.

Source: Te Ara Ahunga Ora Retirement Commission, Budget 2025 KiwiSaver changes; Inland Revenue ¹²⁴.

Read the table twice, because it catches people out. The amount you have to contribute to get the maximum did not change. You still need $1,042.86. You just get half as much back for it. The return on that $1,042.86 has gone from 50% to 25%.

How much do I still need to contribute to get the full $260.72?

You must contribute at least $1,042.86 of your own money between 1 July and 30 June to receive the full $260.72 ².

That works out to roughly $20.06 a week, or about $87 a month, or a single lump sum any time before 30 June ⁷.

What counts toward that $1,042.86, and what does not, trips a lot of people up:

• Counts: the contributions deducted from your pay, and any voluntary top-ups you make yourself.
• Does not count: your employer's contributions, last year's government contribution, and money transferred in from an Australian super scheme ².

For most employees on PAYE, you are already there without thinking about it. An employee earning at least $35,000 a year and contributing the minimum rate will pay in more than $1,042.86 over the year, so the full $260.72 lands automatically ⁸. (At the 3% minimum rate that applied for most of the 2025/26 year, $35,000 × 3% = $1,050, which clears the line.) The minimum employee rate rises from 3% to 3.5% on 1 April 2026 (and to 4% on 1 April 2028), which only makes it easier to clear the threshold ⁶.

The people who have to be deliberate about it are the self-employed, contractors, anyone working part-time on a low income, and people not currently in paid work. More on them below.

Worked example: the part-time earner

Scenario: Mereana works part-time and earns $28,000. At the 3.5% rate that takes effect from 1 April 2026 her own contributions over a full year would come to about $980 — just under the $1,042.86 line. (For most of the 2025/26 year the rate was 3%, so her exact figure depends on the timing of the rate change; the principle below is the same either way.)

Because the contribution is paid pro-rata, she does not miss out entirely — she gets 25 cents for every dollar she put in, which is about $245 ³. To reach the full $260.72 she would put a one-off $63 of her own money into her own account before 30 June — that's her own savings, not a fee. Doing so earns her an extra $16 of government money on those last dollars (25% of $63). So a small, deliberate top-up turns a near-miss into the full match — a smaller amount than before the cut, but still a government top-up on her own savings.

It is common for members to sit $100 to $300 short of the full government contribution near 30 June without realising a small top-up would close the gap.

Who is now excluded — the $180,000 income rule

Anyone with annual taxable income over $180,000 no longer receives the government contribution at all, from 1 July 2025 ⁴.

Previously there was no income test — everyone who contributed got the match. Now, above $180,000, the top-up is zero.

To qualify for the government contribution from 1 July 2025 you must:

• be aged 16 to 65 (the qualifying age was extended down from 18 to include 16- and 17-year-olds);
• have made personal contributions during the year (employer contributions and IRD interest do not count);
• have been a KiwiSaver member and mainly resident in New Zealand for the full year to 30 June; and
• earn $180,000 or less per year ⁵.

If you are a high earner over the cap, the government contribution is no longer part of your KiwiSaver maths. That does not mean KiwiSaver stops working for you — your employer contributions, your own contributions and compounding returns still do the heavy lifting — but the annual $260.72 is off the table.

Is the government contribution still worth chasing, and what does the cut do to your balance?

Yes — for anyone under the income cap it is an instant 25% on the money you put in, before your fund earns a cent, and for most employees the higher contribution rate more than offsets the smaller top-up over a career ⁸¹⁰.

Even at 25 cents in the dollar, no term deposit, managed fund or share portfolio matches a 25% uplift on the way in. The smaller it gets, though, the more it matters as a slice of the final balance for low earners specifically. Retirement Commission modelling found that for members earning under $30,000, the government contribution used to make up 15–20% of their total KiwiSaver balance at age 65; after the Budget 2025 cut that falls to 6–11% ¹². For a $100,000 earner the share drops from about 5% to 1%, and for a $180,000 earner from about 3% to 0% ¹². (The $100,000 and $180,000 share figures should be read against the full Budget 2025 analysis ¹⁰.)

The cut did not happen in isolation. The same Budget lifted the minimum contribution rate from 3% to 3.5% (April 2026) and then 4% (April 2028) ⁶. The Retirement Commission's modelling found the combined package could see retirement funds last about 30% longer than under the old settings, with around 80% of currently contributing members ending up with higher balances and around 20% worse off ¹⁰¹¹. In its worked scenarios, a 16-year-old earning $30,000 could end up with roughly 26% more in savings, and a 35-year-old earning $80,000 with around a 25% higher balance at retirement, because the move toward 4% contributions compounds far harder over a long working life than the lost $260 a year ever could ¹⁰¹¹.

Who is in that worse-off 20%? Mainly the people who only ever got the government contribution and no employer match — the self-employed and non-working. In 2024 about 200,000 members received only a government contribution, including roughly 125,000 self-employed people ¹¹. They feel the full force of the cut with none of the offsetting higher employer contributions. If that is you, the response is not to give up on the $260.72 — it is to capture every cent of it, and to look hard at whether your contribution rate and fund choice are pulling their weight.

That last point matters more than the government contribution for most people over a full working life. To see what your own numbers look like under the new settings, run them through our KiwiSaver growth calculator, then book a KiwiSaver review to pressure-test your rate, fund and provider.

A quick note on PIR — the tax that quietly costs more than the cut

While you are checking your KiwiSaver, check your Prescribed Investor Rate (PIR). If your PIR is too high, you over-pay tax on your KiwiSaver returns every year — and for many people that silent leak is bigger than the $260.72 they are chasing. The PIR thresholds are set in the Income Tax Act 2007 and have been unchanged since 2010 ⁹:

Source: Inland Revenue; PIR thresholds per Income Tax Act 2007 s HM 60 ⁹.

Note these PIR income bands are not the same as the PAYE income-tax brackets — a common mix-up. If you never told your provider your PIR, you are on the default 28% — and you may well be over-paying. It is worth checking as part of any KiwiSaver review.

What about the self-employed and not-working — how to claim it

If you are self-employed or not earning, there are no PAYE deductions doing the work, so you must make voluntary contributions totalling $1,042.86 by 30 June to capture the full $260.72 ⁷.

The simplest ways to get there:

• About $20 a week by automatic payment (precisely $20.06/week from 1 July reaches $1,042.86 by 30 June), or
• About $87 a month ($1,042.86 ÷ 12 = $86.91), or
• A single lump sum of $1,042.86 any time before 30 June ⁷.

You can pay your scheme provider directly or pay Inland Revenue. Most providers make this easy. The table below is illustrative — confirm the exact payee details and any suggested amount on your own provider's government-contribution page:

Source: provider government-contribution pages; Inland Revenue ²⁷. Specific provider amounts and payee names are illustrative — verify on your provider's own page.

Worth knowing: only about 41% of self-employed New Zealanders currently receive the government contribution, according to Kernel Wealth — meaning the majority miss it. If you run your own business and your KiwiSaver only ever sees the odd ad-hoc payment, a deliberate top-up before 30 June is a straightforward way to capture it.

Your government-contribution checklist

1. Confirm you are eligible — aged 16–65, KiwiSaver member, mainly NZ-resident all year, and earning $180,000 or less ⁵.

2. Check what you have contributed so far this contribution year (1 July–30 June). Employer money does not count ².

3. If you are short of $1,042.86, make a voluntary top-up before 30 June — even a partial top-up earns 25c per dollar ³.

4. Self-employed or not working? Set up ~$20/week, ~$87/month, or a lump sum to your provider or IRD ⁷.

5. Check your PIR — being on 28% by default can cost more than the contribution is worth ⁹.

6. Review your contribution rate and fund ahead of the 3.5% rise on 1 April 2026 ⁶.

Frequently asked questions

How much is the KiwiSaver government contribution in 2026? The maximum is $260.72 per contribution year (1 July to 30 June). It was halved from $521.43 on 1 July 2025, when the match rate dropped from 50 cents to 25 cents for every $1 you contribute ¹.

How much do I have to put in to get the full $260.72? You need to contribute at least $1,042.86 of your own money between 1 July and 30 June. Employer contributions, past government contributions and Australian-scheme transfers do not count toward that total ².

What happens if I do not contribute the full $1,042.86? You still receive a pro-rata amount — 25 cents for every dollar you contributed during the year. So if you put in $600, you would receive $150 ³.

Who no longer gets the government contribution? Anyone with annual taxable income over $180,000, anyone outside the 16–65 age range, and anyone who did not make personal contributions or was not mainly NZ-resident for the full year to 30 June ⁴⁵.

I'm self-employed — how do I claim it? Make voluntary contributions totalling $1,042.86 by 30 June, either to your scheme provider or to Inland Revenue. That is about $20 a week, $87 a month, or one lump sum ⁷. Only about 41% of self-employed Kiwis currently claim it, so it is easy free money to miss.

Is it still worth contributing now the amount is smaller? Yes. Even at 25 cents in the dollar it is an instant 25% on the money you put in before your fund earns anything — better than any deposit or fund return you will find. For low earners it is still a meaningful slice of the final balance ¹².

Book a free KiwiSaver review with a Smiths adviser to check your contributions, PIR, fund and rate. Book a review

General information, not personalised financial advice. Seek advice tailored to your situation before acting. Craig Smith Business Services Ltd (FSP712931), trading as Smiths Financial, holds a Class 2 licence issued by the Financial Markets Authority and is a member of the Financial Dispute Resolution Service (FDRS). Written by Henry Smith, Financial Adviser; reviewed by Craig Smith, Principal Adviser. Last reviewed 16 June 2026.