Kiwisaver for employers

07

Nov

If an employee is a KiwiSaver member making contributions from their pay, employers must also make a contribution every time they pay their employee salary or wages. These compulsory employer contributions (CEC) are at a minimum rate of 3% of the employee’s gross salary or wages. CEC is not compulsory if the employee is under 18, or if they are a member of a defined benefit scheme.

Employers paying contributions to KiwiSaver are liable for employer superannuation contribution tax (ESCT). Rates have to be calculated for each employee, as it depends on how much the employee earns and how long they’ve worked for. ESCT does not have to be paid if the employer and employee are under agreement to treat part of or all of the contributions as salary or wages under PAYE rules.

When an employee reaches the age of entitlement for New Zealand, employers no longer have to pay CEC unless they have an agreement with the employee to continue payments, want to voluntarily continue paying contributions, or if the employee is aged 60 or over who joined KiwiSaver before July 2019.

Employers can stop making CEC if the government or employee provides an approved savings suspension notice, or if an employee provides a non-deduction notice (KS51) because they are eligible to withdraw from their savings. If employers choose to continue paying contributions voluntarily, they still have to pay ESCT on them.


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