Tax Facts

Kiwisaver

All New Zealand residents and people entitled to live here permanently up to the age of 65 are eligible for KiwiSaver.

Government:

• Contributes $1,000 (tax free) when a member first joins.
• Pays annual member tax credit (for those 18 and over) of up to $1,042.86.
• Pays fee subsidy of $20 every 6 months.
• Funds first home deposit subsidy through Housing NZ if criteria met.
• Exempts employer contributions from specified superannuation contribution withholding tax (SSCWT) up to a maximum of 4% of employee's gross pay.

Note: There is no Crown guarantee of KiwiSaver schemes or investment products of KiwiSaver schemes.

List of KiwiSaver Scheme Providers

Employers must:

• Give new employees and other staff who are interested an Employee information pack (KS3).
• Pass employee’s details to Inland Revenue to enable them to be enrolled.
• Deduct contributions from employee’s gross salary. (The Employer monthly schedule ( EMS) has been adjusted for KiwiSaver – download the payroll specifications for 2008 from the IRD website.)
• Deduct contributions from employee’s gross salary and pay these to IRD through the PAYE system

Compulsory Employer Contributions:

From 1st April 2008 employers must contribute to their employee's KiwiSaver scheme.

This compulsory contribution starts at 1% of employee's gross salary or wages and increases by 1% each year until the maximum contribution of 4% is reached in 2011.

A tax credit of up to $20 per week (per each employee contributing to KiwiSaver) can be claimed by employers through the PAYE system.

More details on the Employer’s role are available on the IRD website.