Contributions
There are several ways in which money can be contributed to your KiwiSaver account. Most importantly, how you contribute depends on your employment status. The various types of contributions are summarised in the following table.
| Contribution type | Employed | Self-employed | Not working | Under 18 |
|---|---|---|---|---|
| Employee contributions | Required, unless on a savings suspension | No, unless you receive PAYE income* | No | Required, if working |
| Employer contributions | Required, unless on a savings suspension | No, unless you receive PAYE income* | No | No |
| Regular payments (E.g. direct debit) | Optional | Optional | Optional | Optional |
| Lump sum payment | Optional | Optional | Optional | Optional |
| Government contributions | You may be eligible to receive up to $260.72. | No | ||
*If you are self-employed and receive PAYE income you will need to make both employee and employer contributions.
Your contribution
KiwiSaver helps you save for your retirement. If you’re like most KiwiSaver members, the money you contribute will come out of your salary and wages, including bonuses, commission and overtime payments.
Your KiwiSaver contributions are calculated on your gross salary and wages and deducted from your net pay. The minimum contribution is 3% of your wages, even if you are a member of another work place savings scheme.
You can choose to increase this to 4% 6%, 8% or 10%. To do this you can either submit a new contribution rate through your myIR account, or complete a KiwiSaver deduction form (KS2 form) and give this to your employer.
The rate of contribution that you have selected will continue until you notify a change to us, your employer or Inland Revenue. If you provide notice to us or Inland Revenue directly, Inland Revenue will notify your employer. Your new rate will apply to the next payment of salary or wages after your employer receives notification.
You can also make lump sum contributions at any time. It’s easy to deposit money into your Summer account online.
Your employer’s contribution
In most circumstances your employer will make a contribution to your KiwiSaver savings, usually 3% of your salary or wages.
Employers are not obliged to contribute:
- once you are eligible to withdraw,
- if you joined KiwiSaver at age 60 or over prior to 1 July 2019 and have opted out of the five year membership requirement or
- have made a life-shortening congenital condition withdrawal.
Employer contributions are subject to Employer Superannuation Contribution Tax (ESCT). You can also find out more about how to work out an employee’s ESCT rate here.
The Government’s annual KiwiSaver contribution of up to $260.72
In addition to your KiwiSaver savings and your employer contribution, the Government may also contribute to your KiwiSaver account.
How do I receive this Government contribution?
Each July, we submit claims on our member's behalf and arrange for this to be automatically credited to their accounts. If you are concerned you have not contributed enough to access the maximum Government contribution, please get in touch and we can advise the value of your contributions for the current year.
If you’re not an employee
The Summer KiwiSaver scheme has no minimum transaction requirements, so you can adjust your contributions in line with your cash flow.
If you are either self-employed and PAYE isn't deducted, or are not currently working, you can make regular contributions or lump sums in line with your situation.
You may wish to optimise your contributions to access the Government contribution. It’s easy to deposit money into your Summer account online.
Making contributions
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Did you start saving for retirement before KiwiSaver was launched? Consolidating into one KiwiSaver scheme may help you to track your savings and the fees that you pay.
As long as the rules of the other superannuation scheme let you transfer to a KiwiSaver scheme, we can assist you with the process and make contact on your behalf with the other provider. Please contact us for more assistance.
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There may be times when you need to take a break from contributing.
As an employee you may apply to Inland Revenue for a savings suspension, which allows you to put your contributions on hold. When this happens your employer will stop deducting KiwiSaver contributions from your pay.
If you have been contributing for 12 months or more, you can apply. A savings suspension is for a minimum of 92 days (unless your employer agrees otherwise), and a maximum of one year.
While you are on a savings suspension, your employer does not need to make contributions. You can make voluntary contributions at any time during the savings suspension period.
You can stop and start your savings suspension by notifying your employer. However, unless your employer agrees, you cannot take a savings suspension for less than three months.
You can apply for an early savings suspension within the first 12 months of becoming a KiwiSaver member if you are experiencing or likely to experience financial hardship. This will be for a three month period, unless Inland Revenue agrees to a longer period.
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Visit the IRD website for more information and to apply online, or call Inland Revenue on 0800 549 472.
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Generally, in order to be eligible for a Government contribution you must:
- be over 16 years old, and
- not yet be eligible to withdraw, and
- not have made a life-shortening congenital condition withdrawal, and
- earned less than $180,000 in taxable income per year, and
- have made personal contributions and live mainly in New Zealand.
For every dollar you put in between 1 July and 30 June, the Government pays an extra 25 cents to your KiwiSaver savings, to a maximum of $260.72. That means you would need to contribute at least $1042.86 each year to receive the Government contribution (that is about $20 per week). If you have contributed less than $1042.86, the Government contribution is adjusted on a pro-rata basis. If you’ve only been eligible for part of the year, the maximum credit of $260.72 is reduced proportionately (based on the number of days in the year you’ve been a member).
As a general rule, if you are eligible for the whole period and earn an annual salary or wages of $35,000 or more and your contribution rate is 3%, you will likely get the maximum Government contribution. If you earn less than this, or you are self-employed and are not regularly contributing, you may want to consider topping up your KiwiSaver account to get your maximum entitlement.
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Each July, we submit claims on our member's behalf and arrange for this to be automatically credited to their accounts. If you are concerned you have not contributed enough to access the maximum Government contribution, please get in touch and we can advise the value of your contributions for the current year.