If you employ staff in New Zealand, KiwiSaver creates specific legal obligations that apply from the first day a new employee starts. Getting these right matters — penalties apply for non-compliance, and employees are entitled to their employer contribution.
Employer KiwiSaver Obligations at a Glance
| Obligation | Detail |
|---|---|
| Auto-enrolment | Enrol all eligible new employees from day one |
| Employee contributions | Deduct chosen rate (3%, 4%, 6%, 8%, or 10%) via payroll |
| Employer contribution | Minimum 3% of gross salary — mandatory, on top of wages |
| ESCT | Deduct Employer Superannuation Contribution Tax from employer contributions before payment |
| IRD filing | Include KiwiSaver contributions in regular PAYE filing |
| KS2 form | Provide to new employees so they can opt out if they choose |
Who Must Be Auto-Enrolled?
Auto-enrolment applies to employees who are:
- New Zealand citizens or permanent residents
- Aged 18–65
- Starting a new job (not currently a KiwiSaver member)
Employees can opt out using a KS10 form within 2–8 weeks of starting. After that, they can only stop contributions via a savings suspension (after 12 months of membership).
The 3% Employer Contribution
The employer minimum is 3% of the employee’s gross salary, paid on top of wages — it is not deducted from the employee’s pay. ESCT (Employer Superannuation Contribution Tax) is deducted from this 3% before it reaches the employee’s account, at a rate based on the employee’s total income.
Employers can contribute more than 3% voluntarily, but the minimum 3% is mandatory for all eligible employees who haven’t opted out.