What is Kiwisaver?
KiwiSaver is a voluntary, work-based savings scheme designed to help New Zealanders save for their retirement. If you are an employer in New Zealand, KiwiSaver must be factored in as part of your payroll. Employer contributions to Kiwisaver must be a minimum of 3% of the employee’s gross salary or wages unless the employee has provided notice that their contribution rate is 4% or 8%.
Why is Kiwisaver important?
The KiwiSaver scheme is designed to help New Zealanders work towards future financial stability. Employers need to make regular KiwiSaver deductions and contributions. Failing to make Kiwisaver deductions and contributions can result in penalties as a result of failing to comply with the KiwiSaver Act 2006.
How does KiwiSaver work/affect me as an employer?
If you’re a New Zealand employer, it is your responsibility to facilitate KiwiSaver payments as part of your payroll to be calculated in each pay run. Employers also need to provide information to the Inland Revenue Department detailing the employee’s KiwiSaver contribution.
Your main tasks for KiwiSaver as an employer include:
- Checking if your new employees are eligible for automatic enrollment
- Enrolling them if they are
- Making KiwiSaver deductions and contributions.
Read more about understanding employer obligations when it comes to KiwiSaver in this informative blog.
Are casual and temporary employees eligible for KiwiSaver?
It is not compulsory to enrol temporary employees who are consistently working for you for 28 days or less regardless of how many hours or days of work they complete. Any temporary employees who consistently work for you for more than 28 days need to be enroled in Kiwisaver so you may begin paying employer contributions.
If casual employees are working for you on an irregular basis and get holiday pay alongside their wages, you don’t have to automatically enrol them in KiwiSaver. However, if they’re eligible they can opt to join KiwiSaver through you, which means you will also have to make the minimum 3% contribution to their KiwiSaver fund.
Do employers need to choose their employees’ KiwiSaver provider?
Employers can assist employees when it comes to the options available but are not permitted to provide financial advice. There are several KiwiSaver providers available for scheme members to choose from to manage their KiwiSaver fund. Find out more about different providers here.
Need help with your Payroll and Kiwisaver obligations?
If all of this sounds overwhelming, you’re not alone. HR and payroll software like Employment Hero is designed to safely record information and automate several processes, saving you time and effort, so you can get back to running your business.
Book a demo with us to learn more about automating HR and payroll with Employment Hero.
Disclaimer: The information in this article is current as at 3-Nov-2022, and has been prepared by Employment Hero Pty Ltd (ABN 11 160 047 709) and its related corporate bodies (Employment Hero). The views expressed in this article are general information only, are provided in good faith to assist employers and their employees, and should not be relied on as professional advice. The Information is based on data supplied by third parties. While such data is believed to be accurate, it has not been independently verified, and no warranties are given that it is complete, accurate, up-to-date or fit for the purpose for which it is required. Employment Hero does not accept responsibility for any inaccuracy in such data and is not liable for any loss or damages arising directly or indirectly as a result of reliance on, use of or inability to use any information provided in this article. You should undertake your own research and seek professional advice before making any decisions or relying on the information in this article.
