Is It Compulsory For Employers To Pay KiwiSaver?
In New Zealand, under the standard KiwiSaver rules, if you are an eligible employee and you contribute to your KiwiSaver account, your employer is generally required to contribute a minimum of 3% of your gross salary or wages to your KiwiSaver account. This is a part of the KiwiSaver scheme’s design to encourage retirement savings.
If you don’t make contributions to your KiwiSaver account, your employer is not required to contribute the 3% on your behalf. However, it’s important to note that if you do not contribute, you will not receive the government member tax credits, which can be a valuable incentive to save for retirement. To get the maximum Government contribution of $521.43 each year, you need to make sure you contribute at least $1,042.86 yourself.
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For employees saving at the standard 3% savings level, the maximum government contribution will apply if they earn $34,762 or more each year. Employees with incomes below $34,762 will not receive the $521 maximum unless they save more than the minimum. This is because 3% of their income falls below the threshold of $1,043. Lower-paid employees may choose to make voluntary savings on top of the minimum to maximise the member tax credits they receive or to save at the higher 4% or 5% contribution levels. Understanding these thresholds and considering additional voluntary savings can help you maximise the KiwiSaver government incentives.
It’s always a good idea to check with your employer and review your employment agreement or contract to understand the specific terms and conditions of your KiwiSaver contributions, as there can be variations based on individual employment arrangements. Additionally, KiwiSaver rules and regulations can change, so staying informed about the latest requirements is important.