KiwiSaver is a government initiative involving employers, KiwiSaver scheme providers and several government agencies. It's open to all New Zealand citizens and people entitled to be in New Zealand indefinitely, aged up to 65.
It is a voluntary, long-term savings initiative to help set you up for your retirement. Most KiwiSaver members will build up their savings account through regular contributions from their pay.
Important information regarding KiwiSaver:
- The Compulsory Employer Contribution -This will equal 3% of your pay before tax.
- You can choose to contribute either 3%, 4% or 8% of your pay. Otherwise you can agree your contribution rate with your provider.
- The Default employee contribution rate at sign up time is now 3%.
- Self Employed or not working - You and your KiwiSaver scheme provider agree how much you want to contribute and you make payments directly to them.
- The maximum annual member tax credit you are entitled to is $521.43. To get the full member tax credit automatically you have to contribute at least $1,042.86 a year.
- Three years after your first KiwiSaver contribution you may be able to use your savings to buy your first home. You may also be eligible for the KiwiSaver HomeStart grant from Housing New Zealand. For more information on first home withdrawals go to www.kiwisaver.govt.nz (search keywords: first home).
Employers will still have to:
- Give new employees and other staff who are interested an Employee information pack (KS3)
- Pass any employee's details to the IRD to enable enrolment in the scheme
- Deduct contributions from employee's gross salary
- Deduct contributions from employee's gross salary and pay these to IRD through the PAYE system