KiwiSaver savings suspension: pausing contributions from your pay

Who can have one, and for how long

A savings suspension is for employees, because it stops the deductions an employer makes from salary or wages. There are two kinds:

• Ordinary. Once you have been a member and contributed for 12 months or more, you can have one for 3 months to 1 year. You do not need to give a reason, you can have as many as you want, and they can run back to back.
• Financial hardship. Before 12 months, you can apply if you have made a contribution and are in, or likely to be in, financial hardship for reasons outside your control. Inland Revenue needs evidence. The default is 3 months, and it can give up to 1 year.

Until 1 April 2019 this was a contributions holiday, and it could last up to 5 years. The shorter limit means somebody who wants a longer break now reapplies each year. It is common: in July 2026, 83,434 members were on a suspension, 1,145 of them for hardship.

How to apply, and what your employer does

1. In myIR, open your KiwiSaver account panel and select "Apply for a savings suspension". Without myIR, use Inland Revenue's online request form.
2. The suspension starts on the day it is approved. Inland Revenue sends you a notice with the start and end dates, and can send one to your employer too.
3. Your employer stops the deductions, and usually its own contributions, from your next pay.

Keep the notice. If you start a new job during the suspension, show it to the new employer: until you do, it has to keep deducting, and anything already passed on is refunded only if you ask Inland Revenue. Near the end, Inland Revenue reminds you, and if you do not apply again, it asks your employer to start deductions again. You can restart sooner, but a change within 3 months of the last one needs your employer's agreement.

What a suspension costs you

Three things stop or shrink:

• Your employer's contribution, at least 3.5% of your pay since 1 April 2026 and 4% from 1 April 2028, unless your employment agreement says it continues.
• The government contribution, 25 cents for each dollar you put in, up to $260.72 a year. The full amount needs $1,042.86 of your own money between 1 July and 30 June, and your employer's contributions do not count. Voluntary payments to your provider can make up the difference.
• Growth on the money that would have gone in.

Take a $60,000 salary. At 2026/27 rates, with ACC at 1.75%, you take home $3,885.79 a month contributing 3.5%, and $4,060.79 on a suspension: $175 a month more. Over six months you keep $1,050. Your employer's $1,050 goes too, which after ESCT at 17.5% would have put $866.25 in your account. If the other six months of the year to 30 June are at 3.5%, your own $1,050 still clears $1,042.86, so the government contribution is kept.

If you only need a smaller cut, a temporary rate reduction lets you contribute 3% instead of 3.5% for 3 months to a year, and your employer can choose to match it. You cannot have one during a savings suspension. For how ESCT is worked out, see its page.

Between jobs: what to do instead

With no pay coming in, there is nothing to suspend: contributions from your pay stop when your job ends, none are taken from a redundancy payment, and your savings stay where they are. A suspension becomes useful when you start work again and need the pay more than the savings for a while. If you are in significant financial hardship now, applying to your scheme provider to release money early is a different process, with its own tests. Our guide to KiwiSaver and money between jobs covers both, and when a voluntary payment keeps the government contribution.

Before deciding, work out how long your savings last. The demo shows the money runway in Insights with sample savings and weekly outgoings, set against the after-tax Jobseeker Support rate, so you can see the week the money would run out, with no account needed.

Know how long your money lasts