What is the KiwiSaver? The KiwiSaver is a voluntary, work-based savings initiative open to all New Zealanders under the age of 65.
How does it affect me? If you are an employer, you must now ensure that all new employees are enrolled in KiwiSaver, unless they are:
- Under 18
- Casual agricultural or Election Day workers
- Private domestic workers
- Casual or temporary employees whose contract is 28 days or less
Existing employees are able to join the scheme at any time by informing their employer.
How do the contributions work?Employee Contributions An employee can choose to make contributions of either 2%, 4% or 6%. Should no option be chosen, the default contribution is 2%. (Note: this changes to 3% on April 1st 2013) Employer Contributions Employers must make a contribution of 2% but this will rise to 3% on April 1st 2013. Employer contributions will be subject to Employer Superannuation Contribution Tax (ESCT) at the employees’ marginal tax rate. Government Contributions The government contributes a tax-free amount of $1000 to new members and pays annual member tax credit of up to $521.43. There is also government funding for first home deposits when relevant criteria is met.
Is there anything I need to do now? Yes, you must:
- Give interested new and existing employees an Employee Information Pack (KS3)
- Pass employee details to the Inland Revenue so they can be enrolled
- Deduct contributions from employee gross salaries and pay via PAYE
I’d like to know more about the KiwiSaver Please get in touch and we can explain more about your KiwiSaver obligations. You can also find out more from the KiwiSaver for Employers section of the IRD website.