KiwiSaver Salary Sacrifice

The KiwiSaver Act 2006 states that compulsory employer contributions must be paid in addition to an employee’s gross pay (salary or wages), however from 13 December 2007, employment agreements can be negotiated to have these contributions offset against the employee’s gross pay. This is referred to as KiwiSaver Salary Sacrifice.

To set up an employee with KiwiSaver Salary Sacrifice, select the desired Employee, navigate to the Pay Components screen and select the KiwiSaver pay component. Enter the percentage amount in the Values area for the Salary Sacrifice, Employee and Employer Percentage (either 3, 4, or 8%), making sure the effective dates used are correct before saving.

Note that:

• The Salary Sacrifice Percentage (Employer Contribution) must be the same value as the Employer Percentage
• The salary sacrifice will automatically reduce the salary by the amount of the employer contribution.