Skip to main content

COVID-19 - Level 4 If you have been affected by COVID-19, we may be able to help. Find out more

Service update Some of our key services are currently unavailable while we make some improvements to our system. These will be back on 8am, 16 April. Find out more

Service update Some of our key services will be unavailable from 3pm, 9 April until 16 April for a system upgrade. Find out more

  Employer contributions to KiwiSaver schemes and complying funds

What
Making contributions to your employee's KiwiSaver scheme or complying fund.
Who
Employers
When
Each time you pay your employees.

You must make a compulsory employer contribution to your employee in a KiwiSaver scheme or complying fund. You do this each time you pay them salary or wages.

Compulsory employer contributions

You must make contributions to your employee’s KiwiSaver scheme or complying fund. They’re called ‘compulsory employer contributions (CEC)’.

The lowest rate for your contribution is 3% of your employee’s gross salary or wages.

You make a contribution to your KiwiSaver employees:

  • aged 18 and over
  • aged under 65 or those that have not been a KiwiSaver or complying fund member for five years (whichever date is later)
  • in KiwiSaver or a complying fund and you deduct KiwiSaver contributions from their salary or wages
  • not a member of a defined benefit scheme.

Tax you pay on your employer contribution

You'll need to pay tax on all your employer contributions to KiwiSaver schemes and complying funds. It's called the employer superannuation contribution tax (ESCT).

You do not pay this if you and your employee have agreed to treat some, or all, of your contribution as salary or wages under the PAYE rules.

Employer superannuation contribution tax (ESCT)

Starting compulsory employer contributions

Start paying compulsory employer contributions (CECs) for your:

  • new employees enrolled into KiwiSaver by your from their first pay
  • employees who opted into KiwSaver or a complying fund from their first pay after you’re notified (by us or your employee ).

Starting employees in KiwiSaver 

Stopping compulsory employer contributions

You can stop making compulsory employer contributions if either:

  • we, or your employee, give you an approved savings suspension notice
  • your employee gives you a Non-deduction notice – KS51 (because they’re eligible to withdraw their savings)
  • we ask you to stop.

Employees who become eligible for NZ Super

You stop compulsory employer contributions (CEC) for employees eligible for New Zealand Super.

You keep paying employer contributions for employees:

  • you have an agreement with to keep paying
  • aged 60 or over who joined KiwiSaver before 1 July 2019. Go to the employees with special circumstances for more information.
  • you have volunteered to carry on paying.

You’ll need to pay the employer superannuation contribution tax (ESCT) on these employer contributions.

Employees with special circumstances

Contributions to both KiwiSaver schemes and complying funds

Your employee can be in a KiwiSaver scheme and a complying fund. Your compulsory employer contribution can go to one or be shared between them. For example, 2% to KiwiSaver and 1% to the complying fund.

Your compulsory employer contribution must still be at least 3%. If you give less than 3% to a complying fund you must pay the difference to your employee’s KiwiSaver scheme. 

Voluntary employer contributions to employees

It's up to you if you want to make voluntary employer contributions to employees:

  • above the 3% minimum compulsory employer contribution rate
  • under 18 years old
  • who are eligible for NZ Super.

You’ll still need to pay employer superannuation contribution tax (ESCT) on all your voluntary contributions.

Contributions for employees with special circumstances

There are some employees whose circumstances affect your employer contributions (and their deductions). Those employees are either:

  • employees aged 60 who joined KiwiSaver before 1 July 2019
  • on accident compensation
  • on paid parental leave

Employees with special circumstances

Agreed employment packages

Sometimes you and your employee have agreed a total remuneration package. You must pay employer contributions on top of the package if it's not already included. 

Your employee’s take-home pay should not be less because of the compulsory employer contributions (CEC).

You can also negotiate a salary package which includes a CEC component.

Compulsory employer contributions on back pay

Backdated payments of salary or wages may mean paying compulsory employer contributions. This is only if you take KiwiSaver deductions from them.

Payment of employer contributions

You included in your return the:

  • employer contributions
  • employer superannuation contribution tax (ESCT).

Payment of contributions is different for KiwiSaver schemes and a complying fund. If you’re paying contributions for:

  • KiwiSaver schemes, pay them with your total employer deductions payment for that period
  • complying funds, send the payment to the employee’s complying fund.

KiwiSaver deductions from employee pay

Calculate KiwiSaver deductions and contributions