As an employer, understanding your obligations around KiwiSaver is crucial to ensure compliance and support your staff effectively.
Employer Obligations
Employers must deduct employee contributions from wages and make employer contributions unless the employee opts out, or if the employee is under the age of 18 or over 65.
The minimum employer contribution rate is 3% of the employee's gross earnings. Employers also need to ensure that contributions are paid to the Inland Revenue (IRD) on time. This is bundled into your PAYE payments to IRD.
Opting In and Out
📝 Employees can choose to opt into KiwiSaver at any time or automatically be enrolled when starting a new job. Not many people are aware, but new employees have a window of 2 to 8 weeks to opt out. Once 8 weeks of employment has passed, the employee is unable to opt out after this time.
Employers must provide an information pack to new employees regarding KiwiSaver so they are aware of their obligations and options.
Employer Contribution Considerations
💡 Employer contributions are generally subject to Employer Superannuation Contribution Tax (ESCT). It's essential to calculate this correctly to avoid penalties. Employers can also choose to make additional voluntary contributions to support their employees' retirement savings. These contributions can be set up in your payroll software to be calculated automatically.
Conclusion
Having the right payroll software set up and integrated with IRD can ensure you remain compliant with your obligations as an Employer.
Even better, contact our team to process your payroll reporting so you can be confident that everything is being calculated correctly at all times.
