Guide
KiwiSaver contribution holiday: how to take a break from contributing
A KiwiSaver contribution holiday — officially called a savings suspension — lets you temporarily stop your contributions when money is tight. Here is who qualifies, how long it lasts, what it does to employer and government money, and what a pause really costs your balance.
Last checked October 2026
What a savings suspension actually is
A contribution holiday is the everyday name for what Inland Revenue calls a savings suspension. It pauses the KiwiSaver deductions that come out of your pay — nothing more. Your account stays open, your balance stays invested in your fund, and the money in there keeps rising and falling with the market.
It is more common than most people think. In August 2026, 83,533 KiwiSaver members were on a savings suspension, almost all of them ordinary suspensions taken after 12 months of membership rather than hardship suspensions.
Who can take one
If your hardship is something within your control — for example, you want to save for a holiday — an early suspension may be declined. Once you have been a member for a year, the rules are much simpler.
- Members who have contributed for 12 months or more: you can take a savings suspension for any reason — no explanation needed.
- Members in their first year: you can apply for an early suspension, but you must be experiencing, or likely to experience, financial hardship for reasons outside your control, and you will need to provide evidence.
- Non-employees, such as the self-employed: you do not need a suspension, because nothing is being deducted from your pay. You simply choose how much (or how little) to pay in yourself.
How long a contribution holiday lasts
- Standard length: from 3 months up to 1 year.
- No reason is needed after 12 months of membership, and you can take as many suspensions as you like, including back-to-back ones.
- Early (hardship) suspensions default to 3 months, but Inland Revenue can grant up to 1 year depending on your circumstances.
- Under the KiwiSaver Act, a holiday granted for financial hardship can run for longer than a year where Inland Revenue agrees — the legislation allows up to 5 years — but in practice most are 3 to 12 months.
What happens to employer and government money
This is the part that catches people out. When your suspension starts, your employer stops deducting your contributions — and they stop their compulsory employer contributions too, unless your employment agreement says they must keep paying them. From 1 April 2026 the employer minimum is 3.5% of your pay (rising to 4% in 2028), so pausing also pauses that money.
You also stop building up your own member contributions, which is what earns the government contribution. At the current rate of 25 cents per dollar, up to $260.72 a year, missing a year costs you that top-up — unless you keep making voluntary payments yourself while on the suspension.
- Employer contributions: stop automatically during the suspension.
- Government contribution: only if you keep paying in voluntarily.
- Your existing balance: keeps moving with your fund's returns, for better or worse.
- Fees: keep getting charged on your balance the whole time.
Government contribution explainedEmployer contributions explained
How to apply
The suspension starts on the date Inland Revenue approves your request, and applies from your next pay. Your employer is notified too, and stops the deductions and their own contributions from the dates on the notice.
- 1. Log in to myIR and open the KiwiSaver account panel on your homepage.
- 2. Choose to apply for a savings suspension and follow the steps. If you are in your first year, have your evidence of hardship ready.
- 3. Have your IRD number, contact details, and your employer's name and address handy.
- 4. If you do not have myIR, Inland Revenue offers an online request form for non-myIR users.
- 5. When it is approved, you receive a notice showing the start and end dates. Show this to your employer — and keep it, because you will need it again if you change jobs.
Restarting, changing your mind, or extending
- You can start or stop contributing at any time while on a suspension — just tell your employer.
- If you restart within 3 months of your last change, your employer needs to agree.
- Inland Revenue contacts you before the suspension ends. If you do not apply for another one, they tell your employer to resume deductions and employer contributions.
- To extend, apply for a new suspension before the current one ends.
What a break costs — and what to consider first
A suspension is the right tool when you genuinely cannot afford to contribute and the alternative is going into debt. But it is worth understanding the trade-off before applying, because the pause is more expensive than it looks: you lose your own contributions, your employer's 3.5% (soon 4%) on top, and the government top-up unless you pay in voluntarily. For someone on a $70,000 salary, pausing for a year means roughly $2,100 of employer money plus up to $260.72 of government money you will never get back, on top of your own foregone contributions and the compounding they would have earned.
- Lower your rate instead: you can drop from your current rate to the 3% minimum rather than pausing entirely.
- Shorten the break: a 3-month suspension costs a quarter of a 12-month one.
- If eligible, pay at least $20.06 a week for 52 weeks and check you reach $1,042.86 by 30 June to earn the full $260.72 government top-up. Smaller payments can still earn a partial top-up.
- If you are in genuine crisis, a hardship withdrawal may be more appropriate than a suspension, because it takes money out rather than pausing money going in.