KiwiSaver is a voluntary long-term savings initiative with special features designed to help New Zealanders save for the future. KiwiSaver is open to all New Zealand citizens normally living in New Zealand - and people entitled to be in New Zealand indefinitely.
Most KiwiSaver members will build up their savings through regular contributions from their salary or wages, which are deducted by the member's employer and passed on to the individual's KiwiSaver scheme by the IR.
Those who do not earn a salary or wage subject to PAYE can contribute directly to their chosen KiwiSaver scheme.
KiwiSaver for employees
- employees who are eligible for KiwiSaver and aged 18 and over but under 65 will be enrolled automatically in a KiwiSaver scheme when they commence employment
- employees have the ability to opt out between week 2 and 8 of commencing employment
- existing employees who are eligible can join KiwiSaver at any time.
- the minimum contribution for employees is 3% of gross salary or wages. However, members can contribute more - either 4%, 6%, 8% or 10% of their gross salary or wages
- employees can change the amount they contribute by notifying their employer
- those who do not earn a salary or wage subject to PAYE can make voluntary contributions directly to their KiwiSaver scheme subject to any minimum rate set by their scheme provider
- If an employer has not chosen a KiwiSaver scheme, or the employee has not already chosen its own KiwiSaver scheme, the employee will be allocated to a default KiwiSaver scheme via Inland Revenue.
All contributions deducted from an employee's after-tax salary or wages in the first three months of an employee’s membership with a KiwiSaver scheme are held by the IR.
These contributions will then be passed on to the member’s scheme, together with any interest earned.
Withdrawing KiwiSaver savings or taking a savings suspension
KiwiSaver savings can be accessed once the member has reached Qualifying Age. Being a KiwiSaver member does not currently affect eligibility for New Zealand Superannuation.
In certain circumstances a member may be able to make earlier withdrawals
- for the purchase of a first home
- when facing significant financial hardship
- in cases of serious illness
- when they permanently emigrate from New Zealand (except Australia)
- if required by statute or upon death of member
- to meet a tax liability or additional student loan repayment obligation arising from a transfer to KiwiSaver from an overseas superannuation scheme.
Members may apply to Inland Revenue for a savings suspension if suffering financial hardship or if 12 months have passed since making their first KiwiSaver contribution. Find out more information here.
KiwiSaver members may be eligible for the following benefits
- Government contributions of 50 cents for every dollar the member contributes up to a maximum of $521.43 per year (1 July to 30 June) until the member turns 65*
- Compulsory employer contributions - 3% of an employee’s gross salary or wages until the member turns 65*
- KiwiSaver HomeStart Grant of up to $10,000 (eligibility criteria applies).
- Click here for more information
* If the member first joined a KiwiSaver scheme before 1 July 2019 and was aged over 60 at that time, they may be eligible for Government contributions and compulsory employer contributions for up to 5 years from when they joined (subject to conditions)
What employers need to do about KiwiSaver
Give a KiwiSaver employee information pack (KS3) to
- new employees who are eligible for KiwiSaver
- existing employees who have opted into KiwiSaver or are interested in joining.
If you have chosen a preferred KiwiSaver scheme, supply employees with a
- copy of the preferred scheme’s product disclosure statement.
- written statement advising employees that if they don’t select a KiwiSaver scheme they will be allocated to your chosen KiwiSaver scheme (and not one of the default schemes)
Give KiwiSaver enrolment details to the Inland Revenue for
- new employees who are subject to automatic enrolment
- current employees who choose to join a KiwiSaver scheme.
Deduct KiwiSaver contributions
- from employees’ after tax salary or wages, and
- forward to Inland Revenue with employees’ PAYE.
Make employer contributions
- make compulsory employer contributions for eligible employees after the ECST has been deducted
- consider making additional employer contributions
Help manage KiwiSaver for employees
- stop KiwiSaver deductions for employees who opt out or request a savings suspension
- maintain KiwiSaver records for your staff.
For more information about KiwiSaver for employers visit www.ird.govt.nz