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ESCT Calculation
- From 1 April 2012 employers must deduct Employer Superannuation Contribution Tax (ESCT) from all KiwiSaver employer contributions.
- Ace Payroll fully automates the process, with no user input required if using the regular calculation method provided by Section RD65 Income Tax Act 2007
- A facility is provided for employers to deduct extra tax on the employer contribution if they wish.
See Also
ESCT On IRD Monthly Returns
What Is ESCT?
ESCT Calculation
ESCT Tax Rates
IRD Website - ESCT Guide
 | To use the Plus ESCT calculation method from Modify Employee Details select the KiwiSaver tab, then click over the calculation method shown. From the resulting screen select Plus ESCT. |
Calculation Methods
These notes assume an employer makes the minimum 2% contribution, which is fully taxable from 1st April 2012.
ESCT Regular Calculation
- ESCT is deducted from the employer contribution.
- The amount paid in to KiwiSaver, plus the ESCT, comes to 2%.
- The employee gets less than 2% in their KiwiSaver account, because ESCT is deducted.
- This is the calculation method provided for by Section RD65 Income Tax Act 2007.
- The ESCT deduction shows on the employee payslip.
- If KiwiSaver year to date totals are shown on the employee payslip, then so also do year to date ESCT deductions made using this method.
Plus ESCT Calculation
- The employer pays ESCT on top of the employer contribution.
- The employer pays an amount of ESCT so the employee still gets 2% in their KiwiSaver account.
- The amount of additional ESCT paid by the employer varies based on the marginal tax rate of the employee.
- Because it is an optional employer expense, the ESCT is not shown on the employee payslip.
- Even if KiwiSaver year to date totals are shown on the employee payslip, ESCT using this method is never shown as a year to date total on the employee payslip because it is an employer expense.
- If choosing this method, note the compulsory employer KiwiSaver contribution increases to 3% on 1st April 2013, and is projected to rise to 7% by 2016.
See Also
Payslip Data Options
Income Tax Act 2007
Employers superannuation cash contributions
Contribution in money for benefit of employees
(1) An employer's superannuation cash contribution means an employer's superannuation contribution paid in money either to a superannuation fund or under the KiwiSaver Act 2006 to the Commissioner for later payment to a superannuation fund.
Determining amount of contribution
(2) The amount of an employer's superannuation cash contribution is the sum of
(a) the amount of the contribution received by the superannuation fund or, for a contribution paid to the Commissioner under the KiwiSaver Act 2006, received by the Commissioner for payment to the superannuation fund; and
(b) the amount of tax withheld for the employer's superannuation contribution.
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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