From May 2021 we will send you notifications each month for employees affected by the following:
- The minimum 3% employer contribution is not being met.
- The minimum 3% employee deduction is not being met.
These notifications will be included in the consolidated employer letter you receive each month.
Employees we have not received KiwiSaver contributions for
From June 2021 we will also be contacting employees directly where we have a record that they are KiwiSaver members, and we have not received KiwiSaver contributions. We are asking these customers to get in contact with us to either apply for a savings suspension or to get in contact with you as an employer to start making deductions.
The following month July 2021, if you have not heard back from the employee or no action has been taken, we will be asking you to start making contributions on their behalf. To ensure our customers and your employees are aware of what this means, we would appreciate if you could ask your employees to take action to avoid any unexpected deductions from their wages.
Employer Superannuation Contributions Tax (ESCT) rate for employees
Employers need to review the ’Employer Superannuation Contribution Tax’ (ESCT) rate for each employee at the start of each tax year (1 April) and apply it in their payroll software.
Resources to help
Our website has information about ESCT, including a tool to help employers work out the ESCT rate for each employee.
For employers who use payroll software, the extent to which the ESCT calculation is automated varies across software packages.
Please check with your payroll software provider how this is managed within your software, and for instructions on how to ensure the correct ESCT rate is applied for each of your employees.
We will be monitoring ESCT deductions later in the year and will get in touch with employers who may need assistance.