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KiwiSaver Poua he Oranga

Making deductions

You need to work out your employees' contributions, deduct the correct amount from their pay and pass them on to us.

Contribution rates

Employees can choose a contribution rate of either 3%, 4%, 6%, 8% or 10% of their gross pay.

What gross pay is

Total salary or wages including:

  • bonuses
  • commission
  • extra salary gratuity
  • overtime, and
  • any other remuneration of any kind before tax eg ACC or paid parental leave (PPL) payments.

You'll usually pay employer contributions on the gross pay except for any excluded salary components. These include:

  • redundancy payments
  • the value of providing:
    • board or lodging
    • use of a house or part of a house, or
    • the payment of an allowance instead of the provision of the benefit.
  • expenditure or allowances for accommodation and living costs overseas
  • free or discounted shares received under an employee share scheme (also known as a share purchase agreement)
  • payments under a Voluntary Bonding scheme funded by the Ministry for Primary Industries, the Ministry of Health or the Ministry of Education
  • honoraria payments paid by Fire and Emergency New Zealand to a volunteer.

If an employee doesn't select a rate on their KiwiSaver deduction form (KS2) make deductions at the default rate of 3%.

Employees can:

  • make lump sum contributions through us or direct to their scheme provider
  • change between contribution rates by advising you of their new contribution rate.

They can't change their contribution rate more than once every three months unless you agree.

Complying funds

The definition of gross salary or wages is different for contributions to complying funds. It's worked out on gross base salary or wages. This excludes:

  • bonuses
  • commissions, or
  • other amounts not included in the employee's gross base salary or wages if these are set out in the fund's trust deed.

Employer contributions

As an employer you're required to contribute the equivalent of 3% of your employee's gross salary or wages.

Contributions made to existing superannuation schemes reduce the amount of compulsory employer contributions you're required to pay if certain conditions are met.

All employer contributions are liable for ESCT (employer superannuation contributions tax). The exception to this is if you and your employee have agreed to treat some, or all, of the employer contribution as salary or wages under the PAYE rules.

Find out more about ESCT

Working out deductions

To work out deductions use the:

Make sure deductions start from your employees' first pay.

Passing on deductions to us

You can pass on the employer contributions using the:

  • Employment information (EI) schedule if you're a payday filer.

Stopping deductions

You can stop making deductions for an employee when they:

Contributions made in error

If you make an error in deducting contributions from an employee's pay you can amend this.

If you file online, you can amend your EI in myIR.

We'll refund any contributions made in error. If these include employer contributions and ESCT, these will be repaid to you.

This process will take longer if we have to request the refund from the member's scheme

Deductions from ACC payments

If you continue to pay an employee after an accident you must keep deducting KiwiSaver. You can choose to make employer contributions but you don't have to. If an employee wants to stop deductions they need to apply for a savings suspension.

When ACC pays the employee weekly compensation you don't need to make the employee deductions or employer contributions.

Resignation and retirement benefits

Make deductions as normal at 3%, 4%, 6%, 8% or 10% from the final payment of salary or wages made up for the employee.

Specific exclusions to the term "salary and wages"

These apply where you intend to make ongoing payment to your employee after they retire. One of these relates to periodic payments by way of:

  • pension
  • retiring allowance
  • superannuation, or
  • other allowance or annuity relating to the person's past employment.

Contact us to learn more about these exclusions.

Find out more