KiwiSaver Employer Contributions: Who Qualifies and What You Get
Learn about the mandatory payments employers must make into their staff's retirement funds for eligible employees.
KiwiSaver Employer Contributions are mandatory payments that employers must make into the retirement funds of their eligible staff to support long-term savings.
Who it's for
This scheme is designed for the workforce within New Zealand. Specifically, it applies to all employees who fall within the age range of 18 to 65 years old. If you are an employee within this age bracket, you are eligible to receive these contributions from your employer.
What you get
When you are an eligible employee, you receive a mandatory employer contribution. This is a percentage of your gross salary that your employer must pay directly into your retirement fund. This money is provided by the employer to help build your personal savings for the future.
What it costs you
If you are an employer, this scheme represents a specific payroll cost. You must add a contribution of 3% of your staff's gross salary to your total payroll costs. This means that for every dollar of gross salary earned by an eligible employee, an additional 3% must be allocated to their retirement fund.
The catch to know
The most important thing for employers to remember is the requirement for auto-enrollment. Forgetting to automatically enroll new staff members into the scheme is considered a compliance breach. It is vital to ensure that the enrollment process is handled correctly as soon as a new employee begins their role to avoid these issues.
How to apply
- Check the age of all employees to identify those between 18 and 65.
- Ensure that the enrollment process is completed for all new staff to maintain compliance.
- Calculate the 3% contribution based on the gross salary of each eligible staff member.
- Add these amounts to your payroll costs and distribute them to the staff retirement funds.
For more information, visit the official portal: https://www.kiwisaver.govt.nz