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Questions around KiwiSaver and enrolling employees are some of the most frequently asked questions from employers. Since KiwiSaver involves paperwork with the IRD, it can be tricky to understand your obligations fully. This article will set out what KiwiSaver is, your responsibilities, and how to enrol new employees.

What Is KiwiSaver?

KiwiSaver is New Zealand’s voluntary savings scheme to help New Zealand workers save for retirement. Most New Zealand employees are automatically enrolled in the scheme. Further, the government annually matches contributions, up to $521.43 each year, and employers match up to 3%. 

With few exceptions, KiwiSaver is only accessible once the employee turns 65. In other words, it is a savings account that employees cannot withdraw from until retirement age. The common exception is that they can withdraw their KiwiSaver to purchase a first home. As an important national program, businesses have legal responsibilities to enrol their employees.

Your KiwiSaver Responsibilities

Employers have a few major responsibilities in terms of KiwiSaver. These include:

  • checking to see if new employees are eligible to be automatically enrolled in KiwiSaver;
  • enrolling those new employees if they qualify; and 
  • making KiwiSaver deductions and contributions on behalf of your employees.

It is important to have clear processes to ensure you can easily enrol new and eligible employees. Most businesses will have this check as part of a standard induction checklist or documentation. Ideally, you or your HR staff will be aware of your employees’ KiwiSaver status before starting work.

Enrolling Your Employees

There is an easy test to see whether your new employees should be automatically enrolled. If they are older than 18 and younger than 65 and do not currently have KiwiSaver, they are eligible for automatic enrollment. 

Additionally, you should give any new, eligible employees their KiwiSaver auto-enrolment pack (found on the IRD website). You should do this within seven days of their start date. 

Further, you will need to fill out a ‘new employee and KiwiSaver details form’, the IR346K form also found on the IRD website. You must send this to the IRD on or before your employee’s first payday.

To fill in the form, you will need your employee’s:

  • name;
  • KiwiSaver status (if required);
  • IRD number and tax code;
  • contact details; and
  • date of birth (if they have given this to you).

The employee will also need to fill out a standard KiwiSaver deduction form, the KS2 form.

Your employee’s auto-enrolment is complete when you have:

  • sent the IRD the complete IR346K form;
  • a completed KS2 form (keep hold of this for your records);
  • given the employee the ‘your introduction to KiwiSaver – employee information’ form  (KS3); 
  • given the employee the ‘KiwiSaver opt-out request form’ (KS10); and
  • started contributions and deductions for the employee.

Employees Opting Out

Your new employee can ask you to opt them out of KiwiSaver by handing you their KiwiSaver opt-out request (the KS10 form). You will have given them this form when you automatically enrolled them.

Your employee may give you their KiwiSaver opt-out request (the KS10 form) within 14–56 days of starting work with your business. In that case, you can straight away stop making KiwiSaver deductions from their pay. Likewise, you can stop paying your compulsory employer contributions and the employer superannuation contribution tax.

If your employee sends their completed KS10 to the IRD directly, the IRD will let you know to stop deductions and contributions. 

What if My Employee Is Already Enrolled in KiwiSaver?

If your employee is already in KiwiSaver, there is no need to auto-enrol them. Ask them to fill in a KiwiSaver deduction form, called KS2 on the IRD website.

The form will tell you:

  • the rate to deduct KiwiSaver contributions from their pay; and
  • if the employee is on a savings suspension (you will need to see the notice before you stop their deductions).

Keep the completed KS2 form for your records.

Key Takeaways

As an employer, you have an obligation to automatically enrol new employees between the ages of 18 and 65 into KiwiSaver. The process for doing so is relatively straightforward. Still, it requires proactive management, including getting the required information from your employee before they start, and then completing the IRD forms. Your employee may opt-out if they do not want to be in the KiwiSaver scheme. 

If you have any questions about KiwiSaver and enrolling your employees, contact LegalVision’s New Zealand employment lawyers on 0800 005 570 or complete the form on this page.

FAQs

Do all businesses need to enrol their employees in KiwiSaver?

Yes, all businesses have obligations under KiwiSaver to automatically enrol their eligible employees.

What employees need to be automatically enrolled?

Any new employees, 18 or older and younger than 65, must be automatically enrolled in KiwiSaver if they are not already a member of the scheme.

What form is required to enrol new employees in KiwiSaver?

The IR346 form is critical for enrolling new employees in KiwiSaver. However, you will also need the KS2, KS3 and KS10 forms to give to your new employee.

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