Employers are required to implement KiwiSaver in their business. Here are some of the options you have when providing KiwiSaver in your workplace.
Choose a KiwiSaver scheme for your business
As an employer, you can choose a KiwiSaver scheme for your business. Choosing a scheme can help make the process easier for you by providing access to expert advice. Plus it may also make it easier for your employees who may be unsure which KiwiSaver scheme to choose.
Please note, if you do choose a KiwiSaver scheme, your employees may still nominate an alternative scheme. If an employee does not specify a scheme they will automatically be placed in your chosen scheme.
Choose to contribute more than the minimum
Compulsory employer contributions generally require employers to make contributions where their employee is contributing to KiwiSaver, is aged 18 or over and is not yet eligible to receive their KiwiSaver retirement benefit.
Employer contributions are free of employer's superannuation contribution tax up to 2% of the employee's gross salary or wages to the extent that they are matched by the employee. If an employer contributes more than 2% to an employee's KiwiSaver account, the employer may have to pay tax on the portion of the contributions above 2%.
So, for example, if an employee earns $52,000, you can make a $1040 (being 2% of their annual gross salary or wages) employer contribution and there will be no employer's superannuation contribution tax paid on this amount where the employee is also contributing 2%.
The Government announced in the 2011 Budget that the minimum employee and compulsory employer contribution rate will increase from 2% to 3% of gross salary or wages with effect from 1 April 2013.
From 1 April 2012, there will be no exemption from employer superannuation contribution tax for any employer contributions. From 1 April 2012, employer superannuation contribution tax will be deducted at the employee's marginal tax rate before employer contributions are forwarded to the scheme.
Please note that where you are already making tax exempt contributions to a complying superannuation fund for an employee, the tax exemption applying to any KiwiSaver contributions will be reduced accordingly.
Disclaimer
The FirstChoice KiwiSaver Scheme is provided by ASB Group Investments Limited.
The information contained in this website is for general informational purposes and is designed for use by New Zealand Residents only. None of the Crown, the Trustee, the Manager, ASB Bank Limited and its subsidiaries (the Banking Group), the Commonwealth Bank of Australia, or any other company in the Commonwealth Bank of Australia Group, or any of their Board members or directors (as the case may be), nor any other person or party, guarantees the securities offered in this website or the performance of those securities (including any of the investments or returns made in respect of the securities).
A copy of the Investment Statement for the FirstChoice KiwiSaver Scheme is available here or by calling 0800 1ST CHOICE (0800 178 246).
