Examples
Example one
Margot earns $1,000 a week. She contributes 4% to her KiwiSaver scheme which is matched by a 4% employer contribution. She has been contributing to KiwiSaver for 20 weeks ($800 in contributions) and all of her previous employer contributions ($800) were exempt from SSCWT. Margot is not a member of a complying superannuation fund.
To calculate whether (or to what extent) the employer contribution of $40 in week 21 is exempt from SSCWT, the formula on page 31 is used: |
| Week 21 |
|
|
| |
Total salary or wages |
= |
$21,000.00 |
| |
Previous exempt contributions |
= |
$800.00 |
| |
Total KiwiSaver contributions |
= |
$840.0021 |
| |
Previous exempt KiwiSaver contributions |
= |
$800.00 |
| |
| The amount exempted is up to the lesser of: |
| |
i. |
0.04 x $21,000 - $800 |
= |
$40.00 |
| |
ii. |
$840 - $800 |
= |
$40.00 |
| The entire $40 employer contribution is exempt from SSCWT. |
| |
Close this window to return to the examples selection and information on KiwiSaver Act 2006
Example two
James earns $25,000 a year and contributes 1% of his income to a complying superannuation fund. His employer contributes 3% of his income. James is not a member of a KiwiSaver scheme.
To calculate whether (or to what extent) the weekly employer contribution of $14.42 is exempt from SSCWT, the formula on page 33 is used: |
| Week 1 |
| |
Total salary or wages |
= |
$480.77 |
| |
Previous exempt contributions |
= |
$0.00 |
| |
Total complying fund contributions |
= |
$4.81 |
| |
Previous exempt complying fund contributions |
= |
$0.00 |
| |
| The amount exempted is up to the lesser of: |
| |
i. |
0.04 x $480.77 - $0 |
= |
$19.23 |
| |
ii. |
$4.81 - $0 |
= |
$4.81 |
| $4.81 of the employer contribution is exempt from SSCWT. SSCWT is payable on the remaining $9.61. |
| |
| Week 2 |
| |
Total salary or wages |
= |
$961.54 |
| |
Previous exempt contributions |
= |
$4.81 |
| |
Total complying fund contributions |
= |
$9.62 |
| |
Previous exempt complying fund contributions |
= |
$4.81 |
| |
The amount exempted is up to the lesser of: |
| |
i. |
0.04 x $961.54 - $4.81 |
= |
$33.65 |
| |
ii. |
$9.62 - $4.81 |
= |
$4.81 |
| $4.81 of the employer contribution is exempt from SSCWT. SSCWT is payable on the remaining $9.61. |
Close this window to return to the examples selection and information on KiwiSaver Act 2006
Example three
William earns $100,000 a year and is paid monthly. He has just started to contribute 4% of his income to KiwiSaver and receives a 6% employer contribution. He is not a member of a complying superannuation fund.
To calculate whether (or to what extent) the monthly $500 employer contribution is exempt from SSCWT, the formula on page 31 is used: |
| Month one |
| |
Total salary or wages |
= |
$8,333.33 |
| |
Previous exempt contributions |
= |
$0.00 |
| |
Total KiwiSaver contributions |
= |
$333.33 |
| |
Previous exempt KiwiSaver contributions |
= |
$0.00 |
| The amount exempted is up to the lesser of: |
| |
i. |
0.04 x $8,333.33 - $0 |
= |
$333.33 |
| |
ii. |
$333.33 - $0 |
= |
$333.33 |
| $333.33 of the $500 employer contribution is exempt from SSCWT. SSCWT is payable on the remaining $166.67 employer contribution. |
| |
| Month two |
| |
Total salary or wages |
= |
$16,666.67 |
| |
Previous exempt contributions |
= |
$333.33 |
| |
Total KiwiSaver contributions |
= |
$666.67 |
| |
Previous exempt KiwiSaver contributions |
= |
$333.33 |
| The amount exempted is up to the lesser of: |
| |
i. |
0.04 x $16,666.67 - $333.33 |
= |
$333.33 |
| |
ii. |
$666.67 - $333.33 |
= |
$333.33 |
| $333.33 of the $500 employer contribution is exempt from SSCWT. SSCWT is payable on the remaining $166.67 employer contribution. |
Close this window to return to the examples selection and information on KiwiSaver Act 2006
Example four
Josh earns $50,000 a year and contributes 4% of his income throughout the year to his KiwiSaver scheme. His employer does not contribute to his scheme. At the end of the year the employer pays a bonus of $2,000. Josh's employment contract states that bonuses may be paid as cash or as an employer contribution to a superannuation scheme. Josh asks that the bonus be paid as an employer contribution towards his KiwiSaver scheme. Josh is not a member of a complying superannuation fund.
To calculate whether (or to what extent) the employer contribution is exempt from SSCWT, the formula on page 31 is used: |
| Week 52 |
| |
Total salary or wages |
= |
$50,000.00 |
| |
Previous exempt contributions |
= |
$0.00 |
| |
Total KiwiSaver contributions |
= |
$2,000.00 |
| |
Previous exempt contributions |
= |
$0.00 |
| The amount exempted is up to the lesser of: |
| |
i. |
0.04 x $50,000 - $0 |
= |
$2,000.00 |
| |
ii. |
$2,000 - $0 |
= |
$2,000.00 |
| The entire lump sum employer contribution is exempt from SSCWT. |
Close this window to return to the examples selection and information on KiwiSaver Act 2006
Example five
Jeremy earns $70,000 a year and contributes 8% to his complying superannuation fund throughout the year. His employer contributes 2% throughout the year. At the end of the year the employer tells Jeremy that he is going to receive a bonus of $2,000 to be paid in week 52. Jeremy's employment contract provides that bonuses may be paid as cash or as an employer contribution to a superannuation scheme. Jeremy asks that it be paid as an employer contribution towards his complying superannuation fund.
To calculate whether (or to what extent) the employer contribution is exempt from SSCWT, the formula on page 33 is used: |
| Week 52 |
| |
Total salary or wages |
= |
$70,000.00 |
| |
Previous exempt contributions |
= |
$1,373.08 |
| |
Total complying fund contributions |
= |
$5,600.00 |
| |
Previous exempt complying fund contributions |
= |
$1,373.08 |
| |
| |
The amount exempted is up to the lesser of: |
| |
i. |
0.04 x $70,000 - $1,373.08 |
= |
$1,426.92 |
| |
ii. |
$5,600 - $1,373.08 |
= |
$4,226.92 |
| $1,426.92 of the employer contribution is exempt from SSCWT. SSCWT is payable on the remainder of the employer contribution ($573.08). |
Close this window to return to the examples selection and information on KiwiSaver Act 2006
Example six
Shayne is a member of a KiwiSaver scheme and a complying superannuation fund. He contributes 2% to both and his employer also contributes 2% to both. He earns $80,000 a year.
To calculate whether (or to what extent) the weekly employer contribution of $30.77 is exempt from SSCWT, the formulas on pages 31 and 33 are used: |
| Week one |
| Employer contribution to KiwiSaver scheme: |
| |
Total salary or wages |
= |
$1,538.46 |
| |
Previous exempt contributions |
= |
$0.00 |
| |
Total KiwiSaver contributions |
= |
$30.77 |
| |
Previous exempt KiwiSaver contributions |
= |
$0.00 |
| |
| The amount exempted is up to the lesser of: |
| |
i. |
0.04 x $1,538.46 - $0 |
= |
$61.54 |
| |
ii. |
$30.77 - $0 |
= |
$30.77 |
| |
| The entire $30.77 employer contribution to Shayne's KiwiSaver scheme is exempt from SSCWT. |
| |
| Employer contribution to complying superannuation fund: |
| |
Total salary or wages |
= |
$1,538.46 |
| |
Previous exempt contributions |
= |
$30.77 |
| |
Total complying fund contributions |
= |
$30.77 |
| |
Previous exempt complying fund contributions |
= |
$0.00 |
| |
| The amount exempted is up to the lesser of: |
| |
i. |
0.04 x $1,538.46 - $30.77 |
= |
$30.77 |
| |
ii. |
$30.77 - $0 |
= |
$30.77 |
| |
| The entire $30.77 employer contribution to Shayne's complying superannuation fund is exempt from SSCWT. |
Close this window to return to the examples selection and information on KiwiSaver Act 2006
Example seven
Frances is a member of a KiwiSaver scheme and a complying superannuation fund. She contributes 4% to both and her employer also contributes 4% to both. She earns $50,000 a year.
To calculate whether (or to what extent) the weekly employer contribution of $38.46 is exempt from SSCWT, the formulas on pages 31 and 33 are used: |
| Week one |
| Employer contribution to KiwiSaver scheme: |
| |
Total salary or wages |
= |
$961.54 |
| |
Previous exempt contributions |
= |
$0.00 |
| |
Total KiwiSaver contributions |
= |
$38.46 |
| |
Previous exempt KiwiSaver contributions |
= |
$0.00 |
| |
| The amount exempted is up to the lesser of: |
| |
i. |
0.04 x $961.54 - $0 |
= |
$38.46 |
| |
ii. |
$38.46 - $0 |
= |
$38.46 |
| |
| The entire $38.46 employer contribution to Frances's KiwiSaver is exempt from SSCWT. |
| |
| Employer contribution to complying superannuation fund: |
| |
Total salary or wages |
= |
$961.54 |
| |
Previous exempt contributions |
= |
$38.46 |
| |
Total complying fund contributions |
= |
$38.46 |
| |
Previous exempt complying fund contributions |
= |
$0.00 |
| |
| The amount exempted is up to the lesser of: |
| |
i. |
0.04 x $961.54 - $38.46 |
= |
$0.00 |
| |
ii. |
$38.46 - $0 |
= |
$38.46 |
| |
| None of the $38.46 employer contribution to Frances's complying superannuation fund is exempt from SSCWT. |
Close this window to return to the examples selection and information on KiwiSaver Act 2006
KiwiSaver Act an Inland Revenue Act
An amendment to the Schedule of the Tax Administration Act 1994 has been made to include the KiwiSaver Act as an Inland Revenue Act.
Application date
The Act comes into force on the date appointed by the Governor-General by Order in Council. The Order in Council specifies that the automatic enrolment rules, the provisions relating to opt-in and the SSCWT exemption applies from 1 July 2007 and everything else in the Act applies from 1 December 2006. Further details of the Order in Council are outlined later in this publication.
Close this window to return to the examples selection and information on KiwiSaver Act 2006
21 Includes week 21 employee contribution.
