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An Employer’s Guide to KiwiSaver

Entitlements

17 Sept 2025 (Last updated 3 Dec 2025)

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As an employer, you have several responsibilities to your employees. Understanding these responsibilities is crucial because failing to meet them could lead to penalties. Some of those responsibilities include salary, tax, and KiwiSaver.

In this employer’s guide for KiwiSaver, we explain your responsibilities, what KiwiSaver is, and keeping up with other important duties as an employer in New Zealand. Please note that the information below is general and does not constitute advice. Advice regarding tax and superannuation is outside of Peninsula’s area of expertise. Any information regarding tax and superannuation provided below is sourced from IRD. The below information does not constitute legal advice. Peninsula recommends seeking specialist advice from your accountant, tax specialist, or the IRD for further details.

KiwiSaver

KiwiSaver is a voluntary savings scheme to help employees set up for retirement. It is a voluntary savings initiative designed to make it easier for New Zealanders to save for their future. Established by the KiwiSaver Act 2006, KiwiSaver is a government-sponsored work savings scheme. Implemented from 1 July 2007, it affects five groups:

  • Savers.
  • Employers.
  • Scheme providers.
  • Existing registered superannuation schemes.
  • Government.

Eligibility.

KiwiSaver is for all New Zealand citizens, residents and permanent residents living or normally living in New Zealand. This means New Zealand citizens and permanent residents, as well as Australian citizens and permanent residents who normally live in New Zealand are eligible. People holding temporary, visitor, student, or work permits cannot join KiwiSaver. Neither can people who are New Zealand citizens or entitled to be in New Zealand indefinitely but are just visiting or on holiday in New Zealand.

An employee is automatically enrolled into KiwiSaver if they are:

  • Eligible to be enrolled.
  • Starting work with a new employer.
  • Aged between 18 and 65.

New employees

New employees must be automatically enrolled if they are not already KiwiSaver members. Casual employees may be exempt from KiwiSaver automatic enrolment.

New employees who have been automatically enrolled into KiwiSaver can opt-out any time on or after day 14 and on or before day 56 after starting their employment. Their contributions will be refunded. If your employee opts out, employer contributions will be refunded.

Existing employees

Existing employees are not subject to automatic enrolment, but if eligible, they can choose to join KiwiSaver. They either sign up directly with the KiwiSaver scheme provider of their choice or tell you they want to opt in.

If an existing employee opts into KiwiSaver, they cannot opt-out.

KiwiSaver and employers

Employers must be aware of their obligations regarding enrolments and contributions.

Send all the details of all enrolments to the Inland Revenue Department as well as KiwiSaver opt-out requests.

Employers will make KiwiSaver deductions from their employees’ pay. Employers will make a compulsory minimum contribution as set out below towards an employees’ KiwiSaver savings- unless they are already contributing to another superannuation fund for employees.

Key Things to Remember

  • Enrol eligible new employees in KiwiSaver.
  • Provide KiwiSaver information packs to all new employees (and existing employees if they ask).
  • Deduct KiwiSaver contributions from your employees’ pay.
  • Make employer contributions.
  • Pay tax on your contributions via Employer Superannuation Contribution Tax (ESCT) or PAYE.
  • Provide employer and employee KiwiSaver contributions to the Inland Revenue Department.
  • Act on opt-out and savings suspension requests from employees.

Contributions

Employees can choose a contribution rate of 3%, 4%, 6%, 8%, or 10% of their gross salary or wages.

Currently, employers must contribute 3% in addition to an employee’s gross earnings, despite how much the employee chooses to contribute.

However, the minimum default contribution for employers and employees will increase to 4%. This increase will be phased in over three years:

  • from 1 April 2026 the default contribution will increase to 3.5%
  • from 1 April 2028 the default contribution will increase to 4%

Employees will be able to opt to contribute at a rate of 3% and have that lower rate matched by their employer. Their contributions will be reset to the default rate of 4% after 12 months, but the employee can opt down again if they wish.

Contributions are voluntary for an employer if an employee is under the age of 18, over the age of 64 or on a savings suspension.

However, employees aged 16 and 17 will become eligible to receive compulsory employer contributions from 1 April 2026. The employee will need to be a KiwiSaver member and make employee contributions. This group of employees will also need to enrol in KiwiSaver as the age for auto-enrolment will remain at 18 years of age.

Understand your responsibilities with Peninsula

Being a business owner and employer in New Zealand means that you have to keep up with legislation and manage your staff fairly. Staying on top of HR and financial duties can sometimes get overwhelming and challenging when you have limited resources or support. For years, we have worked with Kiwi business owners and helped them through hiring, management, onboarding, well-being, health and safety, and even dismissal and termination.

Our comprehensive services include advisors who can walk you through your duties, answer your tricky questions, and help you with the latest documentation, policies, and procedures. Talk to Peninsula today to learn more about our services. Call us on 0800 521 593.

This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.

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Resignation

If you are a small business owner or employer, resignations are going to be a part of your business and life. Anytime an employee resigns, it is an important moment in the business as the resignation will kickstart a process including the notice period. Resignation is the termination of employment initiated by the employee. That is, the employee voluntarily ends employment and communicates that decision to the employer. When an employee resigns, they may have to give written notice via a letter (or email) to their employer. The employee will provide a period called the notice period to transfer their duties and responsibilities. The notice period acts as a safeguard and protection for the business and allows the employee to transition out of their role. The resignation process When an employee resigns, there are many things you need to do. The first step is for the employee to officially announce their resignation in writing. In this resignation letter, they will mention their date of resignation, their expected notice period, and their last day of employment. They will include details of any other projects or equipment they need to hand over. Ideally, the employee would have discussed all of this with you verbally or with the hiring manager. On or before the employee’s final date of employment, you can request the employee to: Return all property of the business (including keys, documents, information technology equipment, intellectual property). Remove hard copy and electronic personal and confidential files. Inform supervisor/s of any passwords/codes to access computer files. What are notice periods? The notice period: Starts the day after the employee gives their employer notice in writing via email or a letter that they want to end their employment. Ends on the last day of employment. Forming a part of the offboarding process, the notice period helps the employee and the company acclimatise to the resignation and shift in responsibilities. Notice periods can be tricky as their duration is not standardised across all roles. Having an offboarding or resignation policy in place can benefit you during such times. Notice required when resigning If an employee has resigned or been dismissed, they need to give notice. The required notice period will depend on their award, registered agreement, or contract. An employee can give more notice than what is outlined in the applicable award, registered agreement, or contract. If the employer does not want the employee to work the notice period or wishes to shorten it, they would need to agree with the employee to the shorter notice including waiving notice. If you are an employer, you cannot unilaterally substitute the proposed notice period by an employee for a shorter one, even if it’s according to the award or employment contract. Doing so constitutes the employer terminating the contract and therefore would have unfair dismissal risks attached. If the employer pays out the notice period, the employee’s employment ends on the date that payment is made. In that case, the employee doesn’t stay employed during the notice period (or continue to accrue entitlements, such as annual leave). If the employer doesn’t pay out any part of the notice period, the employee stays employed for the entire period. Employment can’t end on a date earlier than the day the notice is given. The notice period must be paid out before the termination is effective. An employee’s award, employment contract, enterprise agreement, or other registered agreement sets out: How much notice (if any) the employee has to give when they resign. When an employer can withhold money if the employee does not give the minimum notice period. Taking money out of an employee’s pay before it is paid to them is a deduction. An employer can only deduct money if: The employee agrees in writing and it’s principally for their benefit. It’s allowed by a law, a court order, or by the Fair Work Commission. It’s allowed under the employee’s award. It’s allowed under the employee’s registered agreement and the employee agrees to it. Most awards say that in certain circumstances an employer can deduct up to one week’s wages from an employee’s pay if they do not provide the minimum amount of notice. Where an award allows this, an employer can only deduct pay from an employee’s wages under the award, not from other entitlements. Although, you must follow the requirements in the industrial instrument, such as the employee must be over 18 years of age; and the employer may deduct from wages due to the employee under the relevant award that is no more than one week’s wages for the employee. Also, any deduction made must not be unreasonable in the circumstances. Final payments on resignation Final pay is what an employer owes an employee when their employment ends. An award, employment contract, enterprise agreement, or other registered agreements can specify when the final payment must be made. If it does not, the best practice is for an employee to be paid within 7 days of their employment ending, or on the next scheduled payday. An employee should get the following entitlements in their final payment: All outstanding wages for hours worked, including penalty rates and allowances Any accumulated annual leave and, if applicable; annual leave loading – i.e. if it would have been paid during employment. Accrued or pro-rata long service leave – depending on the relevant state or territory legislation. Sick or carer’s leave is generally unpaid when employment ends unless an award, contract, or registered agreement says otherwise. Updating employment records You should have a clear HR policy around resignation and dismissal. This policy should outline the process, next steps, and responsible parties. A key part of this process should involve having updated employment records. The employee’s resignation letter should be stored in the employee’s personnel file. As part of the record-keeping requirements under the Fair Work Act 2009, the file should contain details of the notice period, and in what circumstances the employee resigned. This file should remain private and confidential.  Generally, no one can access these records other than the employee, their employer, and relevant payroll staff. If requested by the employee, or the former employee to whom the record relates, or the Fair Work Ombudsman, employers must make copies of these records available. Manage resignation and notice periods Running a small business is no small task. You need to know latest rules and policies around staff management, performance, resignation, and dismissal. We have supported thousands of business owners with policies, resources, and tools for their business. Contact Peninsula today to learn more about resignation policies, entitlements, and calculating correct final payments.

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