Timeline:
- 1st July 2011 – The member tax credits are reduced from $1042.86 per annum to $521.00 per annum.
- 1st April 2012 – Employer contributions become taxable. Only the net amount is paid to KiwiSaver.
- July 2012 – The first member tax credit is paid (maximum credit for one year is $521.00).
- 1st April 2013 – The minimum employee contribution rate increases from 2% to 3%.
Member Tax Credits (MTCs)
Members who want to receive the maximum tax credit of $521 per annum will still have to contribute $1042.86 per annum.
Exceptions:
- Members under 18 do not receive Member Tax Credits, even if they are working and contributing to their KiwiSaver.
- If you leave New Zealand to live or work overseas, you will not be eligible for tax credits – even if you are contributing to your KiwiSaver while you are overseas.
- When you get to the age where you can withdraw your funds from KiwiSaver (currently 65 years old), you can elect to carry on contributing to your KiwiSaver but you will no longer receive tax credits.
Tax on Employer contributions
From 1st April 2012 employer contributions will become taxable under the ESCT (employer superannuation contribution tax) regime. The tax rate is based on the employees marginal tax rate.
Minimum Employee and Employer contributions
From 1st April 2013, both the minimum employe and employer contribution rates become 3%. The other employee contribution options of 4% and 8% remain unchanged.
