KiwiSaver
KiwiSaver update – remember 1 April 2008
1 April 2008 is nearly here. Remember that from this date you must make matching employer contributions to your employees' KiwiSaver schemes (or complying funds). To begin with, you must contribute a minimum of 1% of a KiwiSaver contributing employee’s salary or wages. The amount you must contribute will increase by 1% every year until it reaches 4% in 2011.
The legislation requires that compulsory employer contributions must be paid on top of each employee's gross salary or wages. This rule will apply despite any previous contractual agreements you may have already made with any of your employees before 13 December 2007. From this date you can offset future employer contributions against pay movements, as long as they have been negotiated with your employees in good faith.
Start your contributions the first whole pay period after 1 April. Also from this date, you can claim a tax credit of up to $20 per member per week when you contribute to KiwiSaver schemes (or complying funds) on behalf of your employees. The purpose of the tax credit is to reimburse you for the cost of making contributions to your employees' schemes. (You cannot claim for any voluntary contributions you may make to an under 18 year old KiwiSaver member employee.)
IRD advise that you should by now have received your copy of the updated KiwiSaver employer guide (KS4). You can also check out the changes at http://www.ird.govt.nz/kiwisaver/employers/keeping-up-to-date/ks-emp-new-legislation.html.
If you have any questions, members can phone the NZRA advisors on 0800 472 472
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