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COVID-19 Government info for businesses

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COVID-19: Information for businesses

KiwiSaver

KiwiSaver is a savings scheme that helps people save for retirement. Employers contribute to their employees’ schemes and make sure employee contributions are taken from their pay.

As an employer you have several responsibilities. It’s important to get these right — not only because it impacts your employees’ futures, but because you could be liable for penalties if you don't meet your obligations.

You have to:

  • enrol eligible new employees in KiwiSaver
  • provide KiwiSaver information packs to all new employees (and existing employees if they ask)
  • deduct KiwiSaver contributions from your employees’ pay
  • make compulsory employer contributions
  • pay tax on your contributions via ESCT (employer superannuation contribution tax) or PAYE
  • pass employer and employee KiwiSaver contributions on to Inland Revenue
  • act on opt-out and savings suspension requests from employees.
To contribute to your own KiwiSaver scheme, speak to your KiwiSaver provider.

To contribute to your own KiwiSaver scheme, speak to your KiwiSaver provider.

They'll be able to tell you about the requirements and how to make contributions.

How to set up an employee's Kiwisaver

Follow these steps to make sure you cover all the must-dos.

1. If the employee is not a KiwiSaver member

Enrolment is automatic for employees aged 18-64, but they have the opportunity to opt out.

Employees aged under 18 or aged 65+ can join KiwiSaver by either:

  1. giving you a KiwiSaver deduction form (KS2)
  2. contacting a KiwiSaver scheme provider.

You’ll need to enrol your new employee if:

  • they’re aged between 18 and 64
  • they live in New Zealand or are entitled to live here indefinitely
  • you’re not an exempt employer.

Some employees, including contractors, secondees and casual staff, are exempt from automatic enrolment — there’s a list on the Inland Revenue website (external link) .

If you have an employer-chosen KiwiSaver scheme, you must:

  • Tell new employees in writing they'll be allocated to this scheme unless they choose their own.
  • Give them your scheme's investment statement.
  • Start making deductions from their first payday.

2. If the employee is already a KiwiSaver member

Your new employee must give you either:

  • KiwiSaver deduction form (KS2) — if they don't complete the form, make deductions at the default rate of 3%.
  • a letter from Inland Revenue confirming they're already on a contributions holiday.

KiwiSaver forms and guides (external link) — Inland Revenue

3. Enrol employees into KiwiSaver

Give your employee a KiwiSaver information pack (KS3) within seven days.

For most employees, this means filling in a deduction form (KS2) and giving it to you for your records. If they don't complete the form, make deductions at the default rate of 3%.

The Inland Revenue website has full details, including links to download deduction and opt-out forms:

Starting employees in KiwiSaver (external link) — Inland Revenue

Once enrolled, employees have eight weeks to decide if they want to stay with KiwiSaver.

How to make an opt-out request (external link) — Inland Revenue

4. Start making deductions

Send employer and employee contributions to Inland Revenue every month during payday filing. Inland Revenue then forwards the contributions to the employee’s KiwiSaver provider.

Making deductions (external link) — Inland Revenue

Payroll deductions

The easiest way to file your EMS is by using Inland Revenue’s ir-File online service

The easiest way to file your EMS is by using Inland Revenue’s ir-File online service

ir-File online (external link) can save you a lot of time and hassle each pay cycle. 

Employee contributions

The employee chooses the amount you need to deduct. There are five contribution rates of their before-tax pay — 3%, 4%, 6%, 8% or 10%.

If they don't make a choice, you should deduct 3%.

Employer contributions

You're legally required to contribute to your employees' KiwiSaver at 3% of their gross salary or wage. You can contribute more if you wish.

The 3% has to be on top of their total salary or wages, which include:

  • bonuses
  • commission
  • extra salary gratuity
  • overtime
  • any other before-tax payments, eg ACC or paid parental leave payments.

KiwiSaver calculation tables are included in Inland Revenue’s PAYE deduction tables (external link) (IR340 and IR341) to help make it easier for you to work out how much to deduct.

Employer contributions are liable for employer superannuation contribution tax (ESCT).

Tips and advice on ESCT (external link) — Inland Revenue

Deduct ESCT from employer contributions (external link) — Inland Revenue

The easiest way to file payroll information with Inland Revenue is direct from your accounting software.

The easiest way to file payroll information with Inland Revenue is direct from your accounting software.

Payday filing (external link) — Inland Revenue

Make any necessary changes

5. Make any necessary change

Once an employee is in KiwiSaver, you have to keep making deductions, unless either:

  • Inland Revenue tells you the employee is taking a savings suspension — or your employee gives you a savings suspension confirmation letter from Inland Revenue.
  • Inland Revenue tells you to stop making deductions for an employee.
  • The employee turns 65 and decides to stop their KiwiSaver deductions from their pay. They must give you a non-deduction notice (external link) (KS51).

Inland Revenue can also ask you to start making deductions from an employee's pay if the employee joins a scheme directly, or when their savings suspension expires.

Employees can change between the five contribution rates (3%, 4%, 6%, 8% or 10%) by telling you their new contribution rate. They can't change it more often than every three months, unless you both agree to do so.

As with all records for your business, you need to keep KiwiSaver documents for seven years.

As with all records for your business, you need to keep KiwiSaver documents for seven years.

Keep good records

For all your employees who are KiwiSaver members, you need to keep records of:

  • each employee’s contribution rate
  • PAYE records showing deduction amounts
  • any savings suspensions or opt-out requests
  • amount of ESCT deducted from your employer contributions.

Tips and advice on ESCT (external link) — Inland Revenue

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