Often we think of KiwiSaver in terms of our personal use, but if you own a business, you need to make sure you’re doing the right thing for your employees.
Even if you offer a registered superannuation scheme and have an exemption from the Financial Markets Authority, you can’t just ignore KiwiSaver.
As an employer, you must:
When you bring on a new employee, you are responsible for checking whether they are eligible to be a KiwiSaver member and if they should be automatically enrolled. You can check their eligibility on the IRD website.
If they aren’t already enrolled
You’ll need to give them a KiwiSaver information pack within 7 days of the employee starting work. This information pack includes a KS2 KiwiSaver deduction form which the employee can use to let you know whether they want member contributions to be deducted at 3%, 4%, 6%, 8%, or 10% of their gross salary or wages. If they don’t advise you of their preferred rate, you should deduct member contributions at the default rate of 3%.
If they are already enrolled
If your new employee is already a KiwiSaver member, they need to give you a completed KS2 KiwiSaver deduction form, and you must deduct member contributions from their first pay, unless you are given a valid savings suspension notice.
A new employee who is an existing KiwiSaver member must:
Existing employees aren’t enrolled automatically into KiwiSaver, but they can join as long as they meet the eligibility criteria by contracting directly with their chosen KiwiSaver scheme provider or joining through you as their employer if they are 18 or over.
If an existing employee has told you they’d like to join KiwiSaver, you need to check if they’re eligible and:
If a new employee wishes to opt out of KiwiSaver, you need to:
KiwiSaver members can take a break from saving 12 months after they’ve made their first contribution to their KiwiSaver – this is called a savings suspension. It can be for a minimum of three months, up to a maximum of one year.
An employee can apply for a savings suspension by calling the IRD, and if approved, either your employee will show you a valid savings suspension notice or the IRD will notify you. You can stop deducting member contributions and making employer contributions once you’ve seen a valid savings suspension notice.
An employee can give you notice that they’d like to restart their deductions but they can’t ask you to start and stop deductions too often; the minimum period before requesting a change is three months.
You aren’t required to pay compulsory employer contributions if an employee is taking a savings suspension, but if you choose to, you can continue to make employer contributions.
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