How your KiwiSaver money grows.

Your KiwiSaver balance can grow in four ways:

1. Your contributions
2. Employer contributions
3. Government contributions
4. Returns from your investment

All the contributions and returns are invested in a diversified fund that buys a mix of assets including shares and bonds. Those assets tend, over time, to rise in value. This growth in the value of the assets is what creates the investment returns – the money your money makes for you. The longer your money is invested, the more it is likely to grow.

The power of compounding returns

KiwiSaver harnesses the power of compounding returns: your returns are reinvested, then you earn returns on your new higher total. So the money you earn starts to earn more money.

Compounding returns add up significantly over time, so your earliest KiwiSaver contributions will grow the most. In this sense, the more you contribute and the earlier you start, the more your balance will increase.

Try our Westpac KiwiSaver Scheme Calculator to estimate how much difference it might make if you increase your contributions now.

Employer contributions start at 3.5%

Employer contributions make a big difference to your total KiwiSaver balance over the years, even if you don't earn a lot of money.

If you're a KiwiSaver member and an eligible employee, your employer normally contributes a minimum of 3.5% of your pretax earnings when you're aged between 16 and 65. Some employers choose to pay more than 3.5%.

When you start a new job, you should check whether employer contributions are in addition to your salary. While employers are required to pay the 3.5% in addition to your wages or salary, if it's been negotiated with you up front, they can take their contribution to your KiwiSaver account out of your salary.

If you're not working or you've opted out of KiwiSaver, you won't receive employer contributions.

Contribution changes coming in 2028

If you’re employed, the minimum employee and employer contribution rate will increase from 3.5% of your salary or wages to 4% on 1 April 2028.

Government contribution

Every year the Government could contribute up to $260.72 into your KiwiSaver account. Getting the maximum contribution requires you to put in at least $1,042.86 of your own money between 1 July – 30 June. This contribution really adds up over a lifetime.

For example, if the Government's $260.72 was invested each year from age 20, earning a 4.5% annual return, it would generate around $37,000, at age 65 (of that total, nearly $26,000 would be investment returns)¹.

To be eligible, you must:

• Be aged 16-64
• Be living in New Zealand
• Have an income of $180,000 or less.

Stay the course

Regardless of what the market is doing, it pays to resist the temptation to switch funds as your balance fluctuates. KiwiSaver is designed as a long-term investment and time will generally take care of short-term ups and downs.

It's important to understand how long it will be before you want to use your money and choose a fund that works best for that timeframe and your attitude to risk.

Maximising your balance growth

The more you contribute and the earlier you start, the faster your balance is likely to grow. If you want to know more about how you could increase your balance based on your own situation, use our KiwiSaver Calculator to work it out.