KiwiSaver

SmoothPay provides extensively for KiwiSaver enrolment, automatic reporting of KiwiSaver changes to IRD via a KS1 irFile and removal of KiwiSaver enrolment (with optional refund of amounts paid).

To enrol an employee:

  • When adding a new employee, tick the Enrolled in KiwiSaver option (normally pre-ticked for permanent staff - we suggest, even though it isn't approced procedure, that you untick enrolment if your new employee has stated thay have no intention of remaining in the KiwiSaver scheme, simply to avoid the admin hassles involved with this)
  • To enrol an existing employee, choose Edit Employee and tick the Enrolled in KiwiSaver option (you might alsolike to check their KiwiSaver contribution rates in their tax settings)

To un-enrol an employee:

  • Choose Edit Employee and untick the Enrolled in KiwiSaver option (there is also a KiwiSaver Holiday option available if required, which stops contributions until unticked)
  • If the employee has already made contributions you will be asked how you want them dealt with (various options such as immediate refund or let IRD deal with it (recommended))

To change contribution rates:

  • Choose Edit Employee then click [More Tax Settings] and change to suit (you can also do this in Pay Input..Tax/Salary/Child Support section)

 ESCT (Employer Superannuation Contributions Tax):

  • ESCT rates are set automatically when the first pay is processed each tax year (the rate selected is based on the employee's earnings for the immediate previous tax year) however this can be edited if need be in the employee's tax settings page
  • You should not change the rate unless instructed to do so by IRD

KiwiSaver reporting:

  • a full range of reports are available, such as KiwiSaver members (shows employees and contribution rates), contributions summary
  • SmoothPay's IRD schedules include the amounts contributed and ESCT content as per IRD specifications

Salary packaging KiwiSaver (including CEC in employee's salary)

  • Compulsory Employer Contributions (CEC) can, by agreement, be included in the employee's total remuneration. There is an option to this effect in the MBIE Agreement Builder.
  • To work out the salary payable under such an arrangement you need to reduce the agreed total remuneration by the portion of CEC that is payable:
    • Total package $120000
    • CEC @ 3%
    • 120000 / 103 x 100 = 116504.85 (net of CEC)
  • To work out a net hourly rate where the CEC is included by agreement:
    • Total hourly rate $18.50
    • CEC @ 4%
    • 18.50 / 104 x 100 = 17.788462 per hour (net of CEC)
    • NOTE! the net rate must not be less that the minimum hourly rate.

 

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