KiwiSaver is a Government-initiated voluntary savings scheme for employees which involves their employers deducting money from their earnings as retirement savings and making an employer contribution to those savings.

KiwiSaver is open to all NZ residents and people entitled to live in NZ permanently aged up to 65 and who are living (or normally living) in New Zealand.

Any new employee who is 18 years or older (and under 65) is automatically enrolled in KiwiSaver (with some exceptions). The employee may choose a deduction of 3%, 4% or 8% from their gross wages or salary. The employee can opt out of the scheme if they do not wish to belong, provided they do so between day 13 and day 55 from the start of their employment. Existing employees may voluntarily choose to join KiwiSaver at any time provided they meet the eligibility criteria. 

Employees joining KiwiSaver get a number of benefits:

• They get a member tax credit of up to $521.43 each year.
• They get an employer contribution to their KiwiSaver account equal to 3% of their gross wages or salary, less ESCT (Employer Superannuation Contribution Tax).
• Three years after their first KiwiSaver contribution they may be able to withdraw some or all of their KiwiSaver savings to put towards buying their first home.
• They may qualify to receive a first home deposit subsidy in the form of a HomeStart grant from Housing New Zealand. 

Click here for information from the IRD on Kiwisaver for individuals.

Employers have certain duties and responsibilities for administering KiwiSaver, the main ones being:

• Providing employees with the KS3 KiwiSaver Information packs supplied by the Inland Revenue Department (IRD).
• Enrolling all new employees in the scheme; and any existing employees who choose to join.
• Sending IRD the name, address and IRD numbers of employees.
• Deducting 3%, 4% or 8% of a member’s gross pay and remitting that amount to IRD, who then transfer each member’s contribution to their scheme provider.
• Making the minimum 3% employer contribution to the member’s saving scheme (less ESCT).
• Acting on their request if a new employee chooses to opt out within the 6 week opt out timeframe.
• Stopping deductions if IRD or the employee issues the appropriate notice do so (such as when contribution holidays are activated by the employee). 

Click here for information from the IRD Kiwisaver for Employers, including the Kiwisaver Employer Guide.

For very small employers (five or fewer employees) there is a payroll subsidy of $2.00 per employee per pay period for those employers who use an IRD approved payroll provider.