In New Zealand when an employee starts a new job the employer must automatically enrol the employee in KiwiSaver if they meet the criteria.  The criteria for being enrolled in KiwiSaver is if:

  1. They are between the ages of 18 and 65;
  2. They are on a contract of more than 28 days in length; or
  3. They are a casual agriculture worker for more than 3 months; or
  4. Their job is full time or permanent part-time.

The employer should provide a KiwiSaver information pack for the employee to fill out.  From that pack they can choose at what rate their KiwiSaver deductions will be made from their earnings.

There are five different percentage rates being 3%, 4%, 6%, 8% or 10%.  The employer must match up to at least 3% and can voluntarily match up to a higher rate.  If an employee does not choose a rate then the employer must deduct 3%. 

The KiwiSaver deductions begin from the employee’s  first pay.  There is an 8 week window for an employee to decide whether or not they want to be in KiwiSaver.  They can opt out if they do not want to be enrolled in a KiwiSaver scheme.

When the IRD gets the deduction details from the employer, IRD will either put the employee into one of nine default KiwiSaver providers or the employer’s chosen scheme if they have one.  An employee  can also notify the IRD in the KiwiSaver information pack of any provider that they wish to have as their KiwiSaver provider.

Existing employees can also ask their employer for a KiwiSaver provider pack and once that information is completed by the employee to opt into the scheme, the employer will start their KiwiSaver deductions from the employee’s next pay.  If an employee has more than one employer at the time of joining, they can choose which ones to have deductions from.

An employee will not be eligible for a KiwiSaver enrolment if they are any of the following:

  1. Under the age of 18 years or over the age of 65;
  2. A casual agriculture worker or an election day worker;
  3. Domestic worker and they pay their own PAYE;
  4. On a temporary contract for less than 28 days;
  5. A casual employee;
  6. On paid parental leave or accident compensation receiving intermittent non-regular payments;
  7. A teacher and transfer to another state or state integrated school;
  8. An employee of the New Zealand State Services working overseas; or
  9. A shareholder employee and their income is not subject to PAYE.

It pays to get employee’s Kiwisaver entitlements correct to avoid any issues with non compliance.