KiwiSaver: Employer Obligations

5 October, 2021 | Carolyn Ranson

The New Zealand KiwiSaver Scheme, comes loaded with employer obligations that anyone hiring and paying employees needs to abide by. These obligations start when onboarding new employees

Enrolling new employees in KiwiSaver

New employees hired by the business must be automatically enrolled in KiwiSaver, unless they only hold a temporary position.  The employer is obliged to obtain the employee’s name, address, employee IRD number, and provide that information to the IRD before the next Employer Monthly Schedule is due for filing. The employer is also required to inform the employee about the KiwiSaver scheme including automatic enrolment and their entitlement to opt out (see below).

Employees under the age of 18 or over the age of 65 are not automatically entitled to employer contributions, and do not have to be automatically enrolled. They can choose to be enrolled.

What about Temporary employees?

The law defines a temporary employee as someone performing a “contract of service for 28 days or less”. If an employee works beyond 28 days, the employer must automatically enroll them in the scheme.

What information do you need to provide your employees?

The employer must provide all new workers with the KiwiSaver information pack for employees within seven days of their contract beginning. This pack includes the Inland Revenue information sheet, the KiwiSaver Employee details form, the KiwiSaver deduction form and an opt-out request form.

Which KiwiSaver scheme do you have to use?

When enrolling into the KiwiSaver scheme the employee may select a specific scheme, if the employee does not request a scheme in their enrolment, they will be added into a default scheme.

What if the employee wants to “Opt Out”

Employees who wish to opt-out of the KiwiSaver scheme can do so between the 14th and 56th day of employment. After the 56th day the employee will become locked in the scheme. Although, they can change provider at any time.

How much does the employer have to pay?

The employer must make deductions to the employee’s pay at the rate set by the employee. The default (minimum) contribution rate by employees is 3% but other options include 4%, 6%, 8% and 10%. The employer is then obligated to deposit this deduction and their own contribution of 3% (less tax) to the employee’s KiwiSaver account.

Regardless of what percentage amount the employee contributes, the mandatory employer contribution is capped at 3%. Although an employer can choose to contribute more.

The employer contributions should be on top of regular pay. If the employer is not paying KiwiSaver in addition to regular pay, this must be negotiated with the employee as part of salary and wage negotiations prior to employment and be documented in their employment agreement. If the employment agreement is silent then employer KiwiSaver contribution will be in addition to salary/wages.  If the employer is deducting employer contributions from an employee’s wages or salary, the effect cannot make the hourly rate fall below minimum wage.

The first KiwiSaver deposit begins concurrent to the employee’s first payday. There is a tax upon the employer’s contribution called the Employer Superannuation Contribution Tax that the employer is responsible to pay.

Employees under the age of 18

Employers are not obligated to make KiwiSaver contributions for employees under 18 regardless of whether they are enrolled in KiwiSaver or not.  If The employee is enrolled in KiwiSaver, the employer will need to follow the same process for filing the relevant information with IRD and paying the employee contributions into their KiwiSaver account.

Employees over the age of 65

Once an employee has reached the age of 65, the employer is no longer required to make contributions or to deduct employee contributions.

The employee may choose to continue to make employee contributions, and the employer is obligated to continue this process if the employee chooses to do so.

The employer may also choose to continue to make employee contributions but is not legally obligated to do so.

Contributions Holidays

An employee may choose to suspend their own contributions for a period no less than three months or more than five years; a contribution holiday. They will need to apply for a “savings suspension” using IRD’s myIR web portal.

Once approved by IRD, they will send the employer a savings suspension notice. The notice will include dates stating how long the suspension is for and will apply from the employee’s next payment of salary or wages.

Once the notice is received by the employer, the employer should stop deducting KiwiSaver contributions from the employee’s pay and can cease making employer contributions.


Contact Employment Law expert Carolyn Ranson’s Personal Assistant, Suzanne Sumner by phone 09 837 6840 or email to set up an appointment.

Do you need advice understanding your KiwiSaver obligations as an employer? 
Contact our Employment Law experts today to set up an appointment for further advice.

email Carolyn
+64 9 837 6840

About the author

An experienced employment, estate litigation and elder law lawyer, Carolyn completed her law degree at City University, London in 1996. She was in house legal counsel for a large retirement village operator, before entering private practice in 2000. She joined
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