Tax facts – Kiwisaver

All New Zealand residents and people entitled to live here permanently up to the age of 65 are eligible for KiwiSaver. All new eligible employees must be automatically enrolled in KiwiSaver. However there are some employees who are exempt from automatic enrolment. These include:

  • Those under 18 years of age
  • Casual agricultural workers or Election Day workers
  • Private domestic workers
  • Casual and temporary employees employed under a contract of service that is 28 days or less

All eligible existing employees can join the scheme at any time they wish by notifying their employer.

There are 3 employee contributions rates, being 2%, 4% or 8%. The employee can elect the rate at which they want their contributions deducted. If an employee does not elect a rate then the default rate of 2% will be used by the employer for contribution deductions made. This will rise to 3% from 1 April 2013.

Compulsory Employer Contributions

From 1 April 2008 it became compulsory for employers to contribute to their employees’ KiwiSaver scheme.

This compulsory contribution started at 1% of employees’ gross salary or wages on 1st April 2008 and increased to 2% on 1 April 2009. The employer contributions will rise to 3% from 1 April 2013.

From 1 April 2012 all employer contributions will be subject to Employer Superannuation Contribution Tax (ESCT) at the employees’ marginal tax rate.

Government Assistance

The government also:

  • Contributes $1,000 (tax free) when a member first joins
  • Pays annual member tax credit (for those 18 and over) of up to $521.43 (effective from 1 July 2011)
  • Funds first home deposit subsidy through Housing NZ if the relevant criteria are met

Note: There is no Crown guarantee of KiwiSaver schemes or investment products of KiwiSaver schemes.

Employers must:

  • Give new employees and other existing staff who are interested an Employee information pack (KS3)
  • Pass employees’ details to Inland Revenue to enable them to be enrolled
  • Deduct contributions from employees’ gross salary and pay these to IRD through the PAYE system

For more information on KiwiSaver and how this may apply to you give us a call or refer to the KiwiSaver for Employers information available on the IRD website.

Supplied by CCH Business Fitness NZ

Book a Complimentary 1 Hour Consult

What our clients say

Brilliant team. Extremely helpful and professional business attitude.

Mehernosh Kotwal

Extremely professional and astute business advisors. Our businesses has benefitted and elevated to new horizons with DFK OGC by our side. Even when going gets challenging, they are open to seek subject matter experts. Anit Patel and his entire team are great highly recommended.

Sanjai Bagia

It’s not so big that you feel like just another number, but it’s also big enough that they can cover everything I need.  I feel comfortable with the fact that as my business grows, DFK OGC will be able to handle the demands that come with it.

Lee Chang Woo

DFK have supported us for many years and the service has been great across various partners.

MAHA Australia & New Zealand

We have found DFK OGC’s approach to everything from services provided to how they build relationships one that had worked well for them. We’ve found them to be down to earth, obviously knowledgeable about what they do and approachable as well. They always welcome the phone.

Any time I need them – any of the partners – they’re there to pick up the phone.
And they provide that service after hours as well, which is just great.

Dipak Bagia – CEO Petrochem Group

Very efficient and has a personal touch. If you have questions, they respond in a timely manner and even visits you to explain things face to face.

Marlo Camacho
Previous
Next