Subpart 3 - Contributions other than deductions from salary or wages

KiwiSaver Act 2006 – subpart 3 allows contributions other than those that are deducted from an employee's salary or wages to be made.

This subpart allows contributions other than those that are deducted from an employee's salary or wages to be made.

Contributions may be paid via the Commissioner

Under section 93, an employer may make a contribution to an employee's KiwiSaver scheme by paying it to the Commissioner, provided that the contribution is a "specified superannuation contribution".15 The employer employer contributions to the Commissioner to be on-paid:

  • to the provider of the KiwiSaver scheme, if the employer has a contractual obligation to the provider to pay those contributions; and
  • to the employee, if the employer has a contractual obligation to pay those contributions.

The employer contribution must be accompanied by a remittance certificate and must be paid to the Commissioner within the time prescribed16 as if the contribution were a tax deduction. The payments must be made net of specified superannuation contribution withholding tax payable (if any).

The employer must include details of the contributions made for each employee on the employer monthly schedule that the employer is required to deliver to the Commissioner in relation to that month.

Under section 95 a person other than an employer (including a member of a KiwiSaver scheme) may make a contribution to a person's KiwiSaver scheme by paying it to the Commissioner, provided the contribution is accompanied by the person's:

  • name and address;
  • tax file number; and
  • any other information that the Commissioner may require.

Under section 96 the Commissioner must pay the contribution into the holding account and then on-pay the contribution to the person's KiwiSaver scheme provider.

Example one
Under her employment contract, Chloe is entitled to an employer contribution to her KiwiSaver scheme for every dollar she contributes (subject to a cap). The employer decides that it would prefer to pay the employer contributions to Inland Revenue along with PAYE, student loan deductions and other tax obligations rather than paying them direct to the provider. The employer contribution must be net of any specified superannuation contribution withholding tax.

Example two
Julie wishes to make a one-off payment to her son Mark's KiwiSaver scheme. Julie can send her payment to the Commissioner provided it is accompanied by Mark's details.

Example three
Frank is self-employed. He wishes to make a contribution of $500 to his KiwiSaver scheme and pays this to the Commissioner at the same time he makes provisional tax payments.

Contributions not remitted or short paid

If an employer shows a payment of an employer contribution on a remittance certificate or an employer monthly schedule and the payment is not received in full by the Commissioner by the time the Commissioner receives the remittance certificate or monthly schedule for that PAYE period, the Commissioner must give notice under section 97 to the employer that the payment has not been received.

If the total amount received by the Commissioner for deductions from all employees' salary and wages and employer contributions is less than that shown on the remittance certificate or employer monthly schedule, under section 98 the employer contribution treated as received will be equal to the amount actually received and after the following deductions have been made for:

  • combined tax and earner premium payments;17
  • child support;
  • student loans; and
  • KiwiSaver contributions.

Under section 99, the amount of the employer contribution (gross of any specified superannuation contribution withholding tax payable) that is treated as received by the Commissioner for any one employee must be calculated by the Commissioner as follows:

a x b
c

where -
a is the total employer contributions received by the Commissioner for all of the employer's employees for the month to which the employer monthly schedule relates.
b is the employer contribution shown on the employer monthly schedule for the relevant employee for the month to which the employer monthly schedule relates.
c is the total employer contribution shown on either or both of the remittance certificate or employer monthly schedule for all of the employer's employees for the month to which the employer monthly schedule relates.

This calculation does not prevent the provider of a KiwiSaver scheme from crediting amounts on the basis provided for in the trust deed or other document governing employer contributions.

Example one
ABC Ltd has 10 employees. The employer monthly schedule for June shows:
Total tax and earner premium deductions $ 50,000
Total child support deductions $ 5,000
Total student loan deductions $ 2,000
Deductions of KiwiSaver contributions $ 2,000
Employer contributions $ 2,000
Total $ 61,000
The Commissioner only received $60,000 from ABC Ltd. The employer contribution that is treated as received by the Commissioner is $1,000.

The employer monthly schedule shows that $400 of the $2,000 employer contribution related to Mel. The amount of the employer contribution that is treated as received for Mel is equal to:
$1,000 x $400
$2,000
A $200 employer contribution is treated as having been received for Mel.

Refunds of employer contributions if employee opts out

Under section 100 if an employee opts out after an employer contribution is paid to the Commissioner, the Commissioner may, if it is still in his or her possession, refund the employer contribution to the employer.

Refunds of employer contributions by provider

Under section 101 the provider of a KiwiSaver scheme may refund to the Commissioner any amount of employer contribution that was paid by the Commissioner in excess of the amount that the Commissioner was required to onpay to the provider.

However, no refund will be made if the contribution paid in relation to a payment of salary or wages is less, after the refund is deducted, than what is required under the Act according to the employee's contribution rate.

15 As defined in section OB 1 of the Income Tax Act, "specified superannuation contribution" is a contribution that:

  • is an employer's superannuation contribution; and
  • is made in money; and
  • is made to a superannuation fund (a superannuation scheme registered under the Superannuation Schemes Act 1989).

16 As per section NC 15 of the Income Tax Act.
17 Within the meaning of the Income Tax Act 2004.