Can I change my contributions?
Yes, you can change the amount that you contribute to KiwiSaver from your gross salary or wages to 2%, 4% or 8% by advising your employer. You need to either complete a KiwiSaver deduction form (KS2) or write to your employer. The change will take effect from your next payment of salary or wages.
You can only change your contribution rate once every three months unless your employer agrees to more frequent changes.
Please note, if you joined KiwiSaver prior to 1 April 2009, your contribution rate will not change to 2% unless you ask your employer to change it. Reducing your contribution rate to 2% may affect your matching Government contributions, especially if you use Mortgage Diversion. Please note, Mortgage Diversion is closed to new applicants.
How much do I need to contribute to KiwiSaver as an employee?
As an employee, the minimum contribution to KiwiSaver is 2% of your gross salary or wages. You can choose to contribute at the higher rate of 4% or 8% if you wish.
Your employer will deduct these contributions from your gross salary or wages and forward them to Inland Revenue at the same time as PAYE deductions. Your contributions will then be passed on by Inland Revenue to your KiwiSaver scheme.
You can also make voluntary payments whenever you like to your KiwiSaver scheme (subject to any minimum contribution amounts that apply to your KiwiSaver scheme).
The Retirement Commissioners website (www.sorted.org.nz) has KiwiSaver calculators that will help you work out the amount that will be deducted from your take home pay and by contributing this amount how much you could save by the time you reach the KiwiSaver retirement age.
How do KiwiSaver contributions work if I have more than one employer?
If you have more than one employer you will be able to choose to join KiwiSaver and make contributions from any or all of your employment sources. However, if you start new employment within 12 months of joining KiwiSaver, contributions will need to be deducted from your salary or wages for that employment. 12 months after your first KiwiSaver contribution, you can apply for a contributions holiday from any or all of your employment sources.
Is my employer required to contribute?
Your employer is generally required to make compulsory employer contributions where you are contributing to KiwiSaver from your salary or wages (subject to eligibility). Generally employer contributions are 2% of your gross salary or wages. However, your employer can choose to contribute more.
How much do I need to contribute to KiwiSaver if I am self-employed or not employed?
If you are not employed or you are self-employed your minimum contributions will be set by the provider of your KiwiSaver scheme. You can choose to make lump sum contributions, or regular contributions.
FirstChoice KiwiSaver currently has no minimum contribution levels, which means you can choose the amount and frequency of your contributions.
How are payments credited to my KiwiSaver account?
Your employer will pass the contributions it deducts from your salary or wages (and its contributions if any) to Inland Revenue, who will then forward these payments to your KiwiSaver provider. Inland Revenue will hold the first three months of your contributions when you first join KiwiSaver. This period may be extended if your balance is below any minimum amount set by Inland Revenue.
After this three month period, your contributions will be paid, with interest, to your KiwiSaver scheme provider.
If you want more information about the whereabouts of your contributions during this period, please go to www.kiwisaver.govt.nz and register as a user. You will be able to track payments into Inland Revenue on your behalf there.
Can I stop payments to my KiwiSaver account? What is a contributions holiday?
If you are a new employee who is automatically enrolled you can opt out between the end of the second and eighth week of commencing employment.
If you are an employee who joins KiwiSaver, then 12 months after your first contribution to KiwiSaver you can apply for a contributions holiday. A contributions holiday allows you to put a hold on your contributions for a period between 3 months and 5 years. Contributions will recommence again at the end of the contributions holiday period, unless you apply to renew it. Your employer will need to stop your deductions and restart them when your contributions holiday finishes. Any compulsory employer contributions will also stop while you are on a contributions holiday.
A contributions holiday may be permitted by Inland Revenue before 12 months in the case of financial hardship.
Disclaimer
A copy of the Investment Statement for the FirstChoice KiwiSaver Scheme ("FirstChoice KiwiSaver") is available here or by calling 0800 1ST CHOICE (0800 178 246).
