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KiwiSaver Automatic Enrolment
- Every person that starts a new job is automatically enrolled in the scheme. Section 10(a)
- New employees under 18 or over 65 are exempted from automatic enrolment. Section 10(b)
- Automatic enrolment does not apply to temporary or casual staff engaged for 28 days or less. Section 12
- Automatic enrolment does not apply if the employee is not required to have tax deductions made from his or her salary or wages under the PAYE rules. Section 14(1)(c)
- Automatic enrolment does not apply to working partners. Section 14(1)(a)(i)
- A new employee has 8 weeks in which to opt out of the scheme.
- You may also like to read our document KiwiSaver Exempt Employees.
- The automatic enrolment rules of Sections 9 to 15 apply to all employees.
- Note in the screen below Ace Payroll not only indicates the employee membership status, but also explains why the employee is a member.
The following options are available from the above screen:
Membership Status
- Every new employee is automatically enroled.
- The employee has eight weeks to opt out of the scheme under Sections 16 to 18.
Contribution Rate
- The contribution rate is determined by Section 64 of the Act.
- Every member must contribute at least 3% of gross wages.
- An employee can choose to contribute 4% or 8% of gross wages.
- An employee cannot choose to contribute at a rate different from 3%, 4% or 8%.
- For more information see our FAQ KiwiSaver Contribution Rates.
Contribution Holiday
- Contribution holidays are provided for by Sections 102 to 114 of the Act.
- Contribution holidays can only be allowed by the IRD. An employee cannot ask their employer for a contributions holiday.
- The IRD advises the employer if a contributions holiday has been allowed.
- With this option set in Ace Payroll, no KiwiSaver deductions are made from the employee.
- For more information see our FAQ KiwiSaver Contributions Holiday.
Deduction Report
- This report shows all the employee's KiwiSaver deductions.
Outline of how people become members of overall KiwiSaver scheme
(1) This subpart provides for employees and other persons to become members of the overall KiwiSaver scheme by
(a) the operation of the automatic enrolment rules when an employee starts new employment, with the effect that a person becomes subject to automatic deductions from his or her salary or wages, but may opt out within specified time limits; or
(b) opting in (whether as an employee who becomes liable for automatic deduction of contributions from his or her salary or wages or otherwise).
(2) This subpart also provides for employers to be exempt employers, with the effect that the automatic enrolment rules will not apply to their employees when they start new employment.
Who automatic enrolment rules apply to
The automatic enrolment rules apply to every employee who
(a) starts new employment with an employer that is not an exempt employer; and
(b) is aged 18 or over, but less than the New Zealand superannuation qualification age, when he or she starts that new employment.
Meaning of new employment
(1) New employment means any employment that is started on or after the date of commencement of the automatic enrolment rules, but
(a) does not include temporary employment (except as provided in section 12); and
(b) does not include employment in respect of which the employee remains on the same payroll as the payroll that he or she was on immediately before starting that employment; and
(c) does not include employment with an employer that carries on the same business as the business in which the employee was employed immediately before starting the employment.
(2) Same business means a business that, in substance, carries on the same or a similar role (regardless of whether or not the legal entity carrying on the business changes), and includes, without limitation,
(a) a company that results from, or continues after, an amalgamation under the Companies Act 1993 involving the company by which the employee was employed immediately before that employee started the employment; and
(b) a business that takes over as a going concern the business in which the employee was employed immediately before that employee started the employment.
(3) However, subsection (1)(c) applies only if an employer has given to the Commissioner the notice (if any) that is required by the Commissioner for the purposes of the administration of this section.
Temporary employment
(1) Employment is temporary, and the automatic enrolment rules do not apply, if
(a) the employment is as a casual agricultural worker within the meaning of section OB 1 of the Income Tax Act 2004; or
(b) the employment is under a contract of service that is for a period of 28 continuous days or less.
(2) However, employment ceases to be temporary, and the automatic enrolment rules then apply (as if the employee then started new employment)
(a) on the day after the date on which the employee ceases to be a casual agricultural worker within the meaning of section OB 1 of the Income Tax Act 2004; or
(b) in the case of any other employee, on the 28th day after the employee started the employment.
Employment in schools
(1) If a person is employed by a board of trustees to work in a state school or integrated school, the relevant board of trustees must be treated as the employer for the purposes of this Act.
(2) If a person is employed to work in a state school or integrated school after being employed to work in another state school or integrated school, the person is treated as starting new employment for the purposes of this Act, despite the fact that the person stays on the same payroll.
(3) In this section,
board of trustees means a board of trustees constituted under Part 9 of the Education Act 1989
integrated school has the same meaning as in section 145 of the Education Act 1989
state school has the same meaning as in section 2(1) of the Education Act 1989.
Other situations when automatic enrolment rules do not apply
(1) Despite sections 10 to 13, the following are not new employment, and the automatic enrolment rules do not apply:
(a) if the person is an employee only because he or she is in receipt of payments of a type referred to in any of the following subparagraphs of paragraph (b) of the definition of salary or wages in section OB 1 of the Income Tax Act 2004:
(i) subparagraph (iii) (which relates to payments to working partners):
(ii) subparagraph (x) (which relates to parental leave payments paid under Part 7A of the Parental Leave and Employment Protection Act 1987):
(iii) subparagraphs (xii) to (xvi) (which relate to certain ACC payments):
(b) if the new employment is as an election day worker or a private domestic worker as those terms are defined in section OB 1 of the Income Tax Act 2004:
(c) if the employee is not required to have tax deductions made from his or her salary or wages under the PAYE rules.
(2) Despite sections 10 to 13, the automatic enrolment rules do not apply if the employee is already a member of a KiwiSaver scheme.
Effect of automatic enrolment
(1) An employee who is subject to the automatic enrolment rules
(a) becomes liable in accordance with subpart 1 of Part 3 to automatic deduction of contributions
(i) from the salary or wages paid in respect of the new employment that triggered the automatic enrolment rules; and
(ii) from the salary or wages paid in respect of any other new employment that the employee starts after becoming subject to the automatic enrolment rules; and
(b) must become a member of a KiwiSaver scheme under subpart 2 of this Part.
(2) The employee must continue to be a member of a KiwiSaver scheme until the earliest of
(a) an opt-out notice taking effect; or
(b) the KiwiSaver end payment date referred to in clause 4 of the KiwiSaver scheme rules (which relates to lock-in of funds); or
(c) the provider terminating the employee's membership of a KiwiSaver scheme under clause 4(5) of the KiwiSaver scheme rules (which relates to zero account balances); or
(d) the date of withdrawal or transfer to a foreign scheme in the case of permanent emigration under clause 14 of the KiwiSaver scheme rules.
(3) The employee continues to be liable for automatic deduction of contributions in accordance with subsection (1)(a) in respect of salary or wages until the earliest of
(a) the dates referred to in subsection (2); or
(b) the date on which section 62 otherwise applies to that payment of salary or wages.
More KiwiSaver Information
| KiwiSaver Automatic Enrolment
Every person that starts a new job is automatically enrolled in the scheme more.. | KiwiSaver Exempt Employees
Under 18, over 65, and casual employees are exempted from automatic enrolment more.. |
KiwiSaver Contribution Rates All members must contribute 3% of gross wages and may contribute 4% or 8% more.. |
| KiwiSaver Opting Out An employee has 8 weeks from the start of employment to opt out of the scheme more.. | KiwiSaver Opting In Anyone can opt in to the scheme at any time. Once opted in, an employee can never opt out more.. | KiwiSaver Contributions Holiday All applications for a contributions holiday must be made to the IRD using a KS6 Contributions Holiday request form more.. |
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KiwiSaver Employer Contributions All employers must contribute 3% for each employee enrolled in KiwiSaver more.. |
ESCT - What Is It? A description of Employers Superannuation Contributions Tax and how it is paid more.. |
| ESCT Tax Rates Employer KiwiSaver contributions are taxed at the top employee marginal tax rate, based on estimated annual earnings more.. | ESCT on IRD Monthly Returns I am doing my monthly return for IRD and the ESCT figure does not show on my IR348 return. What is wrong? more.. |
KiwiSaver Contributions Report The KiwiSaver Contributions Report keeps track of contributions, reversals and refunds more.. |
| KiwiSaver Reversals and Refunds Use the Reversals and Refunds Wizard to reverse and optionally refund KiwiSaver deductions to employees that were automatically enrolled, and then opted out of KiwiSaver more.. | Total Remuneration Use when an agreed salary package includes KiwiSaver employer contributions more.. |
| KiwiSaver Scheme Providers The linking of employees to scheme providers does not happen at the payroll end of the process more.. |
Exempt Schemes How to disable the deduction of compulsory employer KiwiSaver contributions for employees in exempt KiwiSaver schemes more.. |
| Ace Payroll FAQ Contents All the most common Ace Payroll questions grouped by categories in a short table of key words more.. |
Ace Payroll Frequently Asked Questions All the most common questions we are asked at Ace Payroll listed in a question format and grouped by category more.. |
KiwiSaver Forms
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