Tax – Kiwi Saver

Who is eligible for KiwiSaver?

  • All New Zealand residents and people up to the age of 65 entitled to live in New Zealand permanently.

Employees exempt from automatic enrolment:

  • Anyone under the age of 18.
  • Casual agricultural or Election Day workers.
  • Private domestic workers.
  • Casual and temporary employees working for 28 days or less.

Can employees opt out of KiwiSaver?

  • Yes, by filing the prescribed KS10 form from the end of week 2 to the end of week 8 of their employment.

When can eligible existing employees join the scheme?

  • Employees can join KiwiSaver at any time. They just need to notify their employer.

Employee contribution rates:

  • 3%, 4%, 8%
  • Employees elect the rate they want deducted.
  • 3% rate is the default rate if the employee does not specify a rate themselves.

Compulsory Employer Contributions:

  • It is compulsory for employers to contribute to their employees KiwiSaver scheme.

What is the minimum employer contribution?

  • 3% is the minimum.

Employer Superannuation Contribution Tax (ESCT):

  • Employers are subject to ESCT on a progressive scale based on the employees’ marginal tax rate.

Government Assistance; for self-employed or not in paid employment:

  • Members 18 years and over get their annual member tax credit paid up to $521.43.
  • To qualify members will need to contribute $1042.86 in the period 1 July to 30 June.

First Home Deposit:

  • Funds first home deposit subsidy through Housing NZ if the relevant criteria are met.
  • Kiwisaver can be used to buy your first home, if you meet the required rules.

Employers Responsibilities:

  • Must provide new employees and existing staff who are interested an Employee information pack (KS3).
  • Provide employees details to the IRD so that they can be enrolled.
  • Make deductions from employees’ gross salary and pass these on to the IRD through the PAYE system.
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