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Role of your employer

 

 

All employers:

Your employer's main responsibilities

The table below describes your employer's main KiwiSaver responsibilities.

If ... then your employer must ...
  • you're a new employee,

    and
  • you're eligible for automatic enrolment,

    and
  • your employer isn't an exempt employer
  • enrol you automatically
  • give us your name, address and IRD number by completing the KiwiSaver employee details (KS1) form
  • give you a KiwiSaver employee information pack (KS3)
  • if they have an employer-chosen scheme:
    • give you an investment statement, and
    • notify you that you'll become a member of their scheme, if you don't choose one of your own
  • start deducting contributions from your first pay and forward to us:
    • your contributions, along with
    • your income tax deductions (PAYE), and
    • their employer contributions
  • if you decide to opt out:
    • action your opt-out request, and
    • notify us, and
    • refund any contributions deducted, if they haven't been passed on to us.

you want to join KiwiSaver, and you're:
  • give you a KiwiSaver employee information pack (KS3)
  • complete a KiwiSaver employee details (KS1) and send it to us (but only if you're not applying directly to a scheme provider)
  • if they have an employer-chosen scheme:
    • give you an investment statement, and
    • notify you that you'll become a member of their scheme, if you don't choose one of your own
  • start to deduct contributions from your pay and forward to us:
    • your contributions, along with
    • your income tax deductions (PAYE), and
    • their employer contributions.

you've already:

  • joined,

    or
  • been enrolled automatically
  • deduct contributions from your gross pay and forward to us:
    • your contributions, along with
    • your income tax deductions (PAYE), and
    • their employer contributions
  • action your contributions holiday notice, if you have one
  • keep certain KiwiSaver records as required by law.

If you have an "exempt" employer

If your employer already offers a registered superannuation scheme they may have an exemption from the Government Actuary.

The exemption means that your employer doesn't have to automatically enrol new employees in KiwiSaver, but they still have to:

  • have KiwiSaver available to any staff who want to join
  • make deductions for any new employees who are KiwiSaver members
  • make employer contributions for staff who are KiwiSaver members.

Employer-chosen schemes

What are they?

Your employer can choose to have a KiwiSaver scheme for employees who don't choose a scheme of their own. All new permanent employees must be eligible to be members of the scheme.

How do they affect you?

If you want to join KiwiSaver you can still choose the savings scheme you want to invest in. If you don't choose your own savings scheme, you'll be allocated to your employer's chosen scheme. You'll also be able to change schemes later, if you want to.

What happens if you cease to be eligible?

If you cease to be eligible to be a member of your employer's chosen KiwiSaver scheme, then:

  • your employer, or the provider as the employer's agent, must notify both you and us in writing, and
  • you need to join another scheme, or
  • we'll allocate you to a default scheme and give you three months to make an active choice. After this time we'll confirm your enrolment in the default scheme.

Employer contributions

Since your first whole pay period after 1 April 2008 your employer is required to make compulsory contributions to your KiwiSaver scheme if you're:

  • 18 or over, and
  • having contributions deducted from your salary or wages.

Your employer will contribute 2% of what you earn to your KiwiSaver scheme from 1 April 2009.

Wage bargaining

Your employer's compulsory contributions must be on top of your regular pay. This means that if you have agreed to a total remuneration package, the compulsory employer contributions must be paid on top of that package. Your take-home pay should not be reduced because your employer is making a compulsory contribution.

 

Through good faith bargaining, a salary package under an employment agreement can be negotiated whereby compulsory employer contributions can be offset against the employee’s gross pay.

 

For more information please read the Department of Labour fact sheet.

 

Inland Revenue can only send your employer’s compulsory contributions to your scheme provider if we’ve received the money from your employer.

Employer superannuation contribution tax exemption

Your employer's KiwiSaver contributions up to the compulsory employer contribution amount are exempt from employer superannuation contribution tax (ESCT). ESCT is usually paid by employers when they contribute to a superannuation fund for an employee.

 

Employer contributions to employees under 18 or over 65 (and who have been members for more than 5 years) years of age, or to employees on a contributions holiday, aren’t compulsory employer contributions and will be liable for ESCT.

 

Existing schemes

If you join KiwiSaver and your employer already contributes to an existing superannuation scheme for you, they may not be required to make another contribution to your KiwiSaver account. This depends on whether your existing scheme meets certain criteria.

Salary sacrificing of KiwiSaver contributions

What is salary sacrifice?

Salary sacrifice is an arrangement where part of your salary is sacrificed for an employer superannuation contribution. You and your employer mutually agree that your salary will be reduced by a specific amount, which is instead paid as an employer contribution to your superannuation scheme.

What is the effect of salary sacrificing KiwiSaver contributions?

The effect for you is that any contributions you make using a salary sacrifice arrangement:

  • reduce your annual salary (so you will pay less income tax)
  • will not count towards your member tax credit entitlement, as they are treated as an employer contribution, and
  • may affect any of your future salary-based entitlements - for example, to ACC and redundancy.

The effect for your employer, depending on your own level of contributions and the type of your super scheme, is that they will pay:

  • less employer superannuation contribution tax, and
  • in some cases no employer superannuation contribution tax at all.

The effect on the employer is explained in the following table:

If ... then your employer will pay ...
your employer contributes towards a superannuation fund and you contribute nothing employer superannuation contribution tax on the full amount of the contribution.
you sacrifice an amount less than your KiwiSaver contribution, both of which are less than 2% of your annual salary or wages no employer superannuation contribution tax on the sacrificed amount.
you sacrifice an amount more than your own 2% KiwiSaver contribution employer superannuation contribution tax on the difference between the sacrificed amount and your contribution.


Important

We strongly recommend that you seek professional advice before considering salary sacrifice.

Find out more

Further information for employers about what KiwiSaver means for them is on the Inland Revenue website.

Forms and guides

Check out what KiwiSaver forms and guides are available.

Date published: 24 Mar 2009
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