KiwiSaver and money between jobs

Your final pay

Your last pay is often the largest you will receive for a while, so check it against your payslip and your agreement. It must include:

• wages or salary owed for the hours you have worked
• annual holidays you are entitled to but have not taken, paid at the higher of your ordinary weekly pay or average weekly earnings
• 8% of your gross earnings since your last anniversary date, less anything already paid for annual holidays taken in advance
• any unused alternative holidays (days in lieu)
• public holidays that would have fallen within your unused annual leave, which is treated as if you took it straight after your last day
• pay to the end of your notice period, if notice was given

There is no legal right to have unused sick leave paid out, although your employment agreement can provide for it. The final leave and holiday payment is due on or before the pay day of the final pay period. These are Holidays Act 2003 rules, which keep applying until the Employment Leave Act 2026 replaces them on 6 August 2028. Whether you also get redundancy pay depends on your employment agreement, covered in Redundancy in New Zealand.

Tax on a final pay or lump sum

Holiday pay paid out when you leave, a bonus and a redundancy payment are taxed as lump sums. For a lump sum paid when your job ends, your employer adds up your pay for your last two pay periods, converts it to a yearly figure, adds the lump sum, and uses the total to set the lump sum's tax rate. The rates follow the income tax brackets from 10.5% to 39%, plus the 1.75% ACC earners' levy on earnings up to $156,641 where it applies. The levy does not apply to redundancy payments, and KiwiSaver is not deducted from them.

Because the rate assumes that level of income carries on all year, you may pay too much tax if you then earn less. Inland Revenue squares this up after the tax year ends on 31 March. If your only income was salary, wages, a benefit or interest that was already taxed, it works out your tax automatically, sends assessments from the last weekend in May, and pays any refund into the bank account it has on file, so check those details in myIR.

Jobseeker Support is taxable too. It uses the M tax code, and the Ministry of Social Development deducts the tax before paying you.

What happens to your KiwiSaver

Contributions come out of your pay, so they stop when your job ends, and none are taken from a redundancy payment. Your savings stay in your account and nothing needs cancelling. You can still make voluntary contributions at any time, either to your scheme provider, which Inland Revenue describes as the preferred method because it avoids extra transfer time, or through Inland Revenue.

In a new job, contributions restart from your pay. From 1 April 2026 the default rate for you, and the minimum rate for your employer, is 3.5%. You can choose 4%, 6%, 8% or 10% instead, and both defaults rise to 4% on 1 April 2028.

The government contribution in 2026/27

For every dollar you put in between 1 July and 30 June, the government adds 25 cents, up to $260.72 a year. Getting the maximum takes at least $1,042.86 of your own money in that year. To be eligible you must be aged 16 to 65, living mainly in New Zealand, with an annual taxable income of $180,000 or less.

Only your own contributions count, including voluntary ones made by 30 June; employer contributions do not. You do not need to claim it: your provider applies after 30 June, and it can take until the end of August to arrive. If your pay stopped part way through the year, your total may be lower than usual. Sorted's KiwiSaver guides can help you weigh up whether a voluntary contribution suits you.

Savings suspension and lowering your rate

With no pay coming in, there is nothing to deduct. These two options matter once you are earning again, and you apply for either through Inland Revenue in myIR:

• A savings suspension stops contributions from your pay for 3 months to 1 year, and suspensions can run back to back. You can apply once you have been a member and contributed for 12 months, or sooner with evidence of financial hardship. While it runs you do not get employer contributions unless your employment agreement says otherwise.
• A temporary rate reduction lets you contribute 3% instead of 3.5% for 3 months to a year. You cannot have one during a savings suspension, and your employer can choose to lower its contribution to 3% as well.

Hardship withdrawal and its tests

KiwiSaver savings are designed to stay locked in, but you can apply to withdraw some early if you are in significant financial hardship. Inland Revenue lists these situations, where you:

• cannot meet minimum living expenses
• cannot pay the mortgage on the home you live in, and your lender is seeking to enforce the mortgage
• need to modify your home to meet your special needs or those of a dependent family member
• need to pay for medical treatment for yourself or a dependent family member
• have a serious illness
• need to pay funeral costs of a dependent family member
• need palliative care, for yourself or a dependant

You apply through your scheme provider, on its form, with evidence of the hardship. You only apply to Inland Revenue if you are within your first 2 months of membership. If your application is accepted, you can withdraw only your own and your employer's contributions, not government contributions.

Worth knowing before you decide: money locked in KiwiSaver has no effect on your benefit, because Work and Income does not treat it as a cash asset. Money withdrawn from KiwiSaver does count as a cash asset for Temporary Additional Support, whose limits from 1 April 2026 are $1,411.22 for a single person and $2,351.46 for a couple or sole parent.

Your student loan

If you live in New Zealand your student loan is interest-free, and repayments are 12% of every dollar you earn over the $24,128 annual threshold. Your employer deducts them from pay above the pay-period threshold, which is $464 a week, $928 a fortnight or $2,010.66 a month, so they stop when your pay does.

Repayments are deducted from a redundancy payment, but Work and Income does not deduct them from benefit income. If $70 a month or more was over-deducted, Inland Revenue counts it as a significant over-deduction that can be refunded, unless it came from using the wrong tax code. If your income for the year is still over the threshold, you may have more to pay at the end of the year.

Jobseeker Support: when payments start

The Jobseeker Support rate for a single person 25 or over is $426.12 a week before tax, about $372.55 after tax (from 1 April 2026). Three rules decide when the first payment arrives:

• When your job is treated as ending. Entitlement usually starts the day after your employment ended, but holiday pay, pay in lieu of notice and pay in lieu of accumulated leave push that date back by the days they cover. A redundancy payment does not.
• The stand-down, usually 1 or 2 weeks with no payment, starting from your entitlement date. Its length depends on your average weekly income before tax over the last 26 or 52 weeks, which includes any redundancy payment, and on how many children you have. For a single person with no children it is 2 weeks if that average was $1,620.68 a week or more.
• A 13-week non-entitlement period can apply if you became voluntarily unemployed without a good and sufficient reason, or were dismissed for misconduct.

Work and Income says it might be able to help with urgent or unexpected costs during the stand-down, and you can talk to it before your last day. What the benefit asks of you is covered in Job hunting on Jobseeker Support.

Build a simple runway

A runway is the number of weeks your money lasts. It takes four numbers:

1. What you have today: savings, plus your final pay after tax once it lands.
2. True weekly outgoings: rent or mortgage, power, food, transport, phone, insurance, debt repayments, and an allowance for irregular costs such as car registration. Sorted's budgeting tool can help you find the real figure.
3. Weekly income after tax: $372.55 for a single person 25 or over on Jobseeker Support. Use the after-tax figure, because outgoings are paid from what reaches your account.
4. The weeks before the first payment: the stand-down, plus any days covered by holiday pay. Until money comes in, savings fall by the whole of your outgoings.

A worked example: $6,000 in savings, $650 a week of outgoings, and two weeks until the first payment. Those two weeks use $1,300, leaving $4,700. After that the weekly gap is $650 less $372.55, or $277.45, so the $4,700 lasts just under 17 more weeks, a runway of just under 19 weeks in total. Using the before-tax rate of $426.12 would give just under 23 weeks, overstating the runway by about four weeks.