How KiwiSaver works

We know that saving for the future is a must, and the earlier the better. But it can feel almost impossible, even for people with great financial literacy. That's where KiwiSaver comes in: an easy way to save and grow your nest egg for retirement.

To boost your savings, make sure you qualify for the KiwiSaver government contribution.

What is KiwiSaver? It's a long-term savings initiative started by the Government in 2007. It is designed to help you save for your retirement as well as other features such as helping you to save for your first home or in some cases your second home.    

The default minimum contribution deducted from your income is 3%. You can decide to increase your contribution rate to 4%, 6%, 8%, or 10%. Your KiwiSaver contributions are calculated on your before-tax pay, which your employer automatically deducts from your income, and is then deposited into your KiwiSaver account.

One of the biggest benefits of KiwiSaver is that if you're contributing, you can also receive compulsory employer contributions too. Plus, every year, the government can contribute to your KiwiSaver savings as well! And your savings don’t just sit there: your provider manages and invests your savings in a variety of assets like stocks, shares, property and term deposits, to help your money grow over time.

Who can join KiwiSaver?

To be eligible for the scheme, you must meet the following criteria:

  • You are a New Zealand citizen, or you are entitled to live in New Zealand indefinitely (NZ Permanent Resident). If you’re on a student visa, work visa or any other temporary visa you are not eligible.
  • You live, or normally live, in New Zealand (exceptions might apply for some New Zealand government employees).

Individuals of all ages can join KiwiSaver, but different rules apply:

  • Under 18: Parent or legal guardian needs to be involved in the sign-up process.
  • Between 18 and 65: You can join on your own.
  • Over 65: Can join on your own, and your funds are unlocked so you can use them for any reason, but you won't be eligible for government contributions.

You don’t need to have permanent employment to join KiwiSaver, although new employees who are eligible are automatically enrolled in the scheme. But if you're self-employed you can join too and make regular contributions to your KiwiSaver account. If you've previously opted out of KiwiSaver, you can join at any time.

You can also join if you are transferring to AMP from another provider’s KiwiSaver scheme.

What can you use KiwiSaver for?

KiwiSaver accounts are retirement savings schemes where you can withdraw some or all of your savings when you reach your qualifying date, currently age 65 in New Zealand.

There are certain situations where you can access your savings early, such as to help buy your first home (after a minimum of three years in the scheme). Early withdrawals may also be possible if you move overseas permanently, or if you experience serious illness or significant financial hardship.

Find out ways you can use KiwiSaver

How does KiwiSaver work for individuals?

Starting a new job comes with a mix of excitement, nerves, and of course, paperwork. Among the latter might be enrolment into KiwiSaver. Here’s how KiwiSaver works for employees.

There are two main ways you can join the scheme: automatic enrolment or voluntary enrolment. If you’re starting a new job and are between 18 and 65 years old, your employer might sign you up automatically. They’ll make sure you're eligible and provide you with all the information and forms you need.

Don’t want to join your employer’s chosen KiwiSaver scheme? No worries, you can choose to opt out of automatic enrolment and choose the scheme provider you want to join or opt out of joining altogether.

If you’re eligible for KiwiSaver but you aren’t automatically enrolled, or you’re a self-employed individual, you can still join voluntarily. All you have to do is ask your employer for a KiwiSaver information packet or pick a provider and sign up with them directly. With AMP, you can join online in a few easy steps.

How does KiwiSaver work for employers?

Employers play a key role in helping their employees save for the future. They automatically enrol eligible new hires into KiwiSaver, deduct contributions, and even add their own employer contributions!

How much will your employer contribute?

If you contribute a portion of your before-tax pay to KiwiSaver, your employer will contribute too. Typically, they will contribute a minimum of 3% of your gross salary or wages to your KiwiSaver account. There are some exceptions, like if they are contributing to a superannuation scheme on your behalf.

If you decide to opt-out you could be leaving money on the table – you would miss out on the additional 3% contributions from your employer, along with any government contributions. Ultimately joining KiwiSaver can be super beneficial for your future financial well-being.

How does the government contribute to your KiwiSaver savings?

One of the major benefits of KiwiSaver is that for every dollar you invest into your account, the government contributes 50 cents – up to $521.43 each year.

The government’s contribution to your account is a great tool for boosting your savings. Regular contributions, paired with the government’s yearly boost, can add up over the years, helping the growth of your savings.

Government contributions to KiwiSaver

Growing and managing your KiwiSaver Contributions

We’ve answered the question ‘What is KiwiSaver?’. We’ve learnt how KiwiSaver works. The next question: how do you make the most of it?

How much you contribute is up to you. And you can change how much you want to contribute whenever you want.

If you are working you can choose contributions of 3%, 4%, 6%, 8% or 10% of your before-tax pay to KiwiSaver. If you don’t tell your employer how much you want to contribute, they will set it at the default rate of 3%. You can easily adjust your contribution rate by giving your employer written notification, through Inland Revenue or directly through your provider.

You can give your account a boost with voluntary savings – extra contributions you make directly to your provider or through Inland Revenue in regular payments or one-off lump sums.

If you’re an AMP KiwiSaver Scheme member, or are considering choosing AMP as your provider, with MyAMP (online or mobile app) you can check your KiwiSaver balance, do one-off top ups or set up regular automatic payments, change funds, or change your KiwiSaver contribution rate all in one place.

Why is it important to choose the right KiwiSaver fund?

Choosing the right KiwiSaver fund is one of the most significant financial decisions you’ll ever make, as it can seriously enhance the benefits of KiwiSaver, adding up to tens of thousands of dollars over time.

It’s important to choose the right fund for you. What you invest in will come down to the type of fund that you’re enrolled in. Each fund has a unique focus, designed to suit people at different life stages, with different financial goals and levels of risk tolerance.

You can invest in several types of investment funds, each with its risk profile and potential returns. The four common fund types are conservative fund, balanced fund, growth fund and aggressive fund.

Choosing the right fund involves careful thought about your future needs. Factors like whether you aim to buy a house in a few years, or whether retirement is a short-term or long-term prospect, should guide your decision. Try our KiwiSaver calculator to plan your investment journey.

Compare AMP KiwiSaver Scheme funds

How do KiwiSaver providers invest your savings?

With the contributions that you make to your KiwiSaver fund, your provider will invest in various assets to help your savings grow over time. Remember, each provider has a unique investment strategy; what’s important is to ensure their approach resonates with your financial goals, values and risk profile.

At AMP, we believe that the future is about putting money into good. AMP’s investment strategy is rooted in sustainability-minded decisions that we believe will go towards healthy fund performance.

Our definition of sustainability is comprehensive – it includes environmental protection but also focuses our efforts on a wide range of social issues to promote a thriving community and economy. We back this up by applying exclusionary thresholds to the investments we make to avoid supporting certain industries as much as possible, such as those related to the production of fossil fuels, palm oil, nuclear power and controversial weapons.

AMP's sustainable investment philosophy

Do you have to pay tax on KiwiSaver savings?

Just like any other form of income, KiwiSaver comes with tax implications. The scheme is taxed as a portfolio investment entity (called a PIE) that contains various fund options. The PIE’s taxable income (or loss) will be attributed to you based on your share in the PIE’s fund(s).

The PIE pays tax to Inland Revenue on your share of the PIE’s taxable income at your Prescribed Investor Rate (PIR). Your level of taxable income will determine your PIR – either 28%, 17.5% or 10.5%, depending on your circumstances. 

It's important to provide your correct Prescribed Investor Rate (PIR) and Inland Revenue Department (IRD) number, as failure to do so could lead to defaulting to the highest PIR of 28%, potentially resulting in overpayment of tax, or in certain circumstances, you may be liable for additional tax if you've been on a lower PIR than you should have been.

What role does Inland Revenue play in KiwiSaver?

Inland Revenue (IRD) plays a critical role in the smooth functioning of KiwiSaver. They manage all contributions and pass them on to the scheme providers.

If you haven’t chosen a scheme or haven’t been automatically enrolled into one, IRD will assign you to a default or your employer’s chosen scheme. 

Want to opt out of KiwiSaver or need a break from contributions? IRD is your point of contact. If you wish to opt out, you can request after you’ve been in a new job for two weeks, but before you’ve been in the job for eight weeks.

For those who need to hit a pause on contributions, you can also request a savings suspension from the IRD.

Not an AMP KiwiSaver Scheme member yet?

Understanding KiwiSaver is the key to unlocking your financial security. From making the most of employer and government contributions to choosing the right provider, every informed decision brings you a step closer to your financial goals. And if sustainability matters to you, choosing a provider like AMP might be the right move.

Looking for expert KiwiSaver advice?

Navigating your financial future can be complex – even if you have good financial literacy – but you don’t have to do it alone! Financial advice can help you keep on top of your KiwiSaver savings plan, particularly if you are thinking about changing providers. By speaking with a financial adviser, you will find out how your plan is working (or not) for you and make some suggested changes if needed.

Book a consultation and we’ll get in touch at a time that suits you.

As an AMP KiwiSaver Scheme customer, you have access to financial advice whenever you need it which can be obtained either through AMP or an external Adviser. The financial advice that can be provided by an internal AMP Adviser is limited to AMP products, whereas an external Adviser may be able to advise you on a broader range of financial matters.

Helpful resources for your KiwiSaver journey

Optimise your KiwiSaver investment

Your choice of KiwiSaver fund can make a huge difference to the amount of money you have to spend in retirement, and age, risk tolerance and financial goals should be taken into account. Here’s all you need to know.

Find the perfect fund

Grow your money with managed funds

Looking to grow your savings outside of KiwiSaver too? AMP Managed Funds are an effective way to do just that, requiring no minimum investment, offering consistent, healthy returns, granting you the flexibility to withdraw when you need to.

AMP Managed Funds

Planning for retirement with KiwiSaver

The better prepared you are for retirement, the more enjoyable and comfortable it will be. KiwiSaver plays a significant role in retirement planning, so head to our hub to find out how you can live post-work life to the fullest, from understanding how much you need, to transferring over Australian superannuation.

KiwiSaver and retirement


High-interest savings account or KiwiSaver? 

You might be tempted to place your retirement savings in a high-interest bank account, because, unlike KiwiSaver, you can access that money whenever you wish. But for that very reason, this can be a mistake.

When your money is easy to access, you’ll inevitably access it and eat into your retirement savings. High-interest bank accounts also don’t earn government contributions, and won’t offer the long-term returns that KiwiSaver funds do.


I don't believe in KiwiSaver for myself – what do I do?

As Albert Einstein once said, “Just because you don't believe in something doesn't mean it isn't true.” Sure, there are other ways to save and invest in your future, but KiwiSaver is the only retirement scheme where other entities – the government and your employer – contribute to your savings.

The choice is yours, but if you have any questions or reservations regarding KiwiSaver it’s wise to speak to an expert: you can get in touch with ours by booking a consultation, emailing, or calling 0800 AMP KIWI (0800 267 5494), Mon-Fri 9-5.


What percentage do you put into your KiwiSaver and why?

The percentage of your income that you contribute to your account is up to you: you can choose the default 3%, or increase your rate to 4%, 6%, 8% or 10%. The higher the rate you choose, the faster your retirement savings will grow. If you feel as though you need access to money in the short term, you can keep your contributions at 3% (a rate which is matched by your employer).


Why do we only get 3% on KiwiSaver?

The default KiwiSaver contribution for both individuals and employers is 3%. Both individuals and employers can choose to increase that rate, but it is at their discretion – some employers, for example, incentivise higher contributions by offering to match whatever rate their employees choose.


Can I get money out of my KiwiSaver?

KiwiSaver is intended primarily as a retirement savings scheme. You can withdraw some or all of your savings, no questions asked, when you reach your qualifying date – currently 65 years of age (provided you’ve been a member of a KiwiSaver scheme for a total of five years).

That said, there are certain circumstances in which you can access your savings early. You can use them to fund the purchase of your first home (after a minimum of three years in the scheme), or for reasons of serious illness, significant financial hardship, or a permanent move overseas.