Understanding Your Employer's Contributions
If you're eligible, your employer will also contribute to your KiwiSaver savings - our guide explains what you need to know.
Updated 3 August 2023
Compulsory employer contributions
If you're a KiwiSaver member making contributions from your pay, your employer also has to put money in. This is equal to 3% of your gross pay.
Your employer does not have to make compulsory employer contributions to your KiwiSaver scheme if:
Your employer does not have to make compulsory employer contributions to your KiwiSaver scheme if:
- They are already paying into another eligible registered superannuation scheme for you (if your existing scheme meets certain criteria)
- You are under 18 years of age
- You are the age of eligibility to withdraw you savings
- You are not contributing (for example, on a savings suspension or on leave without pay).
​Voluntary employer contributions
Your employer may choose to make voluntary contributions to your KiwiSaver account. Voluntary employer contributions include any contributions over and above the compulsory employer contribution rate to employees:
- Aged under 18 or over the age of eligibility to withdraw your savings
- On a savings suspension, or
- Who are on leave without pay.
​Tax on employer contributions
All employer superannuation cash contributions (employer contributions) are liable for tax which is deducted and paid by your employer. This means that the employer contributions being paid into your KiwiSaver scheme may be less than the amount contributed by your employer as the tax is deducted before your employer pays this to your scheme.
Find out about taxing superannuation fund contributions.
Find out about taxing superannuation fund contributions.
​Wage bargaining
By law, your employer's compulsory contributions must be on top of your regular pay. This means that if you have agreed to a total remuneration package, the compulsory employer contributions must be paid on top of that package. Your take-home pay should not be reduced because your employer is making a compulsory contribution.
Through good faith bargaining, a salary package under an employment agreement can be negotiated whereby compulsory employer contributions can be offset against the employee's gross pay. Your take-home pay will reduce under this agreement.
The Inland Revenue can only send your employer's compulsory contributions to your KiwiSaver provider if they've received the money from your employer.
What the Law Says and What's Happening Throughout New Zealand are Very Different
As reported by government research in April 2023, almost 50% of employers "pay employees' KiwiSaver contributions as part of their staff's total wages, rather than on top of their earnings, as the legislation intended". The survey sent to SMEs throughout New Zealand "found a net 45 percent of employers used a total remuneration approach to KiwiSaver for at least some employees".
Through good faith bargaining, a salary package under an employment agreement can be negotiated whereby compulsory employer contributions can be offset against the employee's gross pay. Your take-home pay will reduce under this agreement.
The Inland Revenue can only send your employer's compulsory contributions to your KiwiSaver provider if they've received the money from your employer.
What the Law Says and What's Happening Throughout New Zealand are Very Different
As reported by government research in April 2023, almost 50% of employers "pay employees' KiwiSaver contributions as part of their staff's total wages, rather than on top of their earnings, as the legislation intended". The survey sent to SMEs throughout New Zealand "found a net 45 percent of employers used a total remuneration approach to KiwiSaver for at least some employees".
​'Exempt' employers
If your employer already offers a registered superannuation scheme they may have an exemption from the Financial Markets Authority.
The exemption means that your employer doesn't have to automatically enrol new employees in KiwiSaver, but they still have to make:
The exemption means that your employer doesn't have to automatically enrol new employees in KiwiSaver, but they still have to make:
- KiwiSaver available to any staff who want to join
- Deductions for any new employees who are KiwiSaver members
- Employer contributions for employees who are KiwiSaver members.
Credit: This information originally appeared on kiwisaver.govt.nz before the website was closed down. MoneyHub's research team continues to keep it up to date.
Related Guides
- KiwiSaver Hardship - if you're a KiwiSaver member and struggling with your finances, our guide explains everything you need to do to ask for an early redemption
- Contributions holiday - if you're wanting to take a break from contributing, our guide explains your options
- KiwiSaver First Home Withdrawal Guide - if you want to use your KiwiSaver balance for a house deposit, our guide explains everything you need to know
- Your KiwiSaver contributions - You can choose how much to contribute. Find out what happens when you go on leave, receive a benefit or entitlement, or have a tax debt
- Government KiwiSaver contributions - To help you save, the Government will make an annual contribution towards your KiwiSaver account as long as you meet certain conditions.
- Voluntary contributions - make voluntary contributions (or lump sum payments) at any time, either directly to your KiwiSaver provider or through Inland Revenue
- KiwiSaver and tax - KiwiSaver contributions are deducted from your before-tax pay, and our guide explains everything you need to know.
- How to check your KiwiSaver contributions - Keeping track of your KiwiSaver contributions is easy with 'My KiwiSaver'
- KiwiSaver Withdrawal - If you joined KiwiSaver on or after 1 July 2019, you can withdraw your savings when you qualify for NZ Super (currently 65)
- KiwiSaver Providers - You can choose which scheme to join, even if you're provisionally allocated to an employer-chosen/default scheme
- Opting out of KiwiSaver - If you're a new employee who's been automatically enrolled, you can choose to opt out of KiwiSaver
- KiwiSaver Fund Selection Guide - 10 Must-Know Facts Revealing Everything You Need To Know About KiwiSaver
- KiwiSaver Calculator - our retirement calculator considers KiwiSaver contributions, how much you earn right now, how much you plan to spend during retirement, and how old you are, among other factors
