KiwiSaver

As an employer you have several responsibilities. It’s important to get these right — not only because it impacts your employees’ futures, but because you could be liable for penalties if you don't meet your obligations.

You have to:

• enrol eligible new employees in KiwiSaver
• provide KiwiSaver information packs to all new employees (and existing employees if they ask)
• deduct KiwiSaver contributions from your employees’ pay
• make compulsory employer contributions
• pay tax on your contributions via ESCT (employer superannuation contribution tax) or PAYE
• pass employer and employee KiwiSaver contributions on to Inland Revenue
• act on opt-out and savings suspension requests from employees.

Follow these steps to make sure you cover all the must-dos.

1. If the employee is not a KiwiSaver member

Enrolment is automatic for employees aged 18-64, but they have the opportunity to opt out.

Employees aged under 18 or aged 65+ can join KiwiSaver by either:

1. giving you a KiwiSaver deduction form (KS2)
2. contacting a KiwiSaver scheme provider.

You’ll need to enrol your new employee if:

• they’re aged between 18 and 64
• they live in New Zealand or are entitled to live here indefinitely
• you’re not an exempt employer.

Some employees, including contractors, secondees and casual staff, are exempt from automatic enrolment — there’s a list on the Inland Revenue website.

Employees who choose to opt into KiwiSaver(external link) — Inland Revenue

If you have an employer-chosen KiwiSaver scheme, you must:

• Tell new employees in writing they'll be allocated to this scheme unless they choose their own.
• Give them your scheme's investment statement.
• Start making deductions from their first payday.

2. If the employee is already a KiwiSaver member

Your new employee must give you either:

• KiwiSaver deduction form (KS2) — if they don't complete the form, make deductions at the default rate of 3%.
• a letter from Inland Revenue confirming they're already on a contributions holiday.

KiwiSaver forms and guides(external link) — Inland Revenue

3. Enrol employees into KiwiSaver

Give your employee a KiwiSaver information pack (KS3) within seven days.

For most employees, this means filling in a deduction form (KS2) and giving it to you for your records. If they don't complete the form, make deductions at the default rate of 3%.

The Inland Revenue website has full details, including links to download deduction and opt-out forms:

Starting employees in KiwiSaver(external link) — Inland Revenue

Once enrolled, employees have eight weeks to decide if they want to stay with KiwiSaver.

How to make an opt-out request(external link) — Inland Revenue

4. Start making deductions

Send employer and employee contributions to Inland Revenue every month during payday filing. Inland Revenue then forwards the contributions to the employee’s KiwiSaver provider.

Making deductions(external link) — Inland Revenue

Payroll deductions

Employee contributions

The employee chooses the amount you need to deduct. There are five contribution rates of their before-tax pay — 3%, 4%, 6%, 8% or 10%.

If they don't make a choice, you should deduct 3%.

Employer contributions

You're legally required to contribute to your employees' KiwiSaver at 3% of their gross salary or wage. You can contribute more if you wish.

The 3% has to be on top of their total salary or wages, which include:

• bonuses
• commission
• extra salary gratuity
• overtime
• any other before-tax payments, eg ACC or paid parental leave payments.

KiwiSaver calculations are included in Inland Revenue’s PAYE calculator to help make it easier. You can also work this out in the PAYE deduction tables.

Deductions from salary and wages(external link) – Inland Revenue

Employer contributions are liable for employer superannuation contribution tax (ESCT).

Tips and advice on ESCT(external link) — Inland Revenue

Deduct ESCT from employer contributions(external link) — Inland Revenue

5. Make any necessary change

Once an employee is in KiwiSaver, you have to keep making deductions, unless either:

• Inland Revenue tells you the employee is taking a savings suspension — or your employee gives you a savings suspension confirmation letter from Inland Revenue.
• Inland Revenue tells you to stop making deductions for an employee.
• The employee turns 65 and decides to stop their KiwiSaver deductions from their pay. They must give you a non-deduction notice(external link) (KS51).

Inland Revenue can also ask you to start making deductions from an employee's pay if the employee joins a scheme directly, or when their savings suspension expires.

Employees can change between the five contribution rates (3%, 4%, 6%, 8% or 10%) by telling you their new contribution rate. They can't change it more often than every three months, unless you both agree to do so.

For all your employees who are KiwiSaver members, you need to keep records of:

• each employee’s contribution rate
• PAYE records showing deduction amounts
• any savings suspensions or opt-out requests
• amount of ESCT deducted from your employer contributions.

Tips and advice on ESCT(external link) — Inland Revenue