Source: Radio New Zealand
Employers are generally prepared for Wednesday’s KiwiSaver changes, business groups say. 123RF
Employers are generally prepared for Wednesday’s KiwiSaver changes, business groups say.
From 1 April, the default rate for KiwiSaver contributions for employers and employees will lift to 3.5 percent, from 3 percent.
This would happen for all members who had not requested a temporary rate reduction.
Katherine Rich, chief executive of Business NZ, said most employers would be prepared for the change.
Those who used major software-based payroll systems would have assistance to make sure it happened.
At the Employers and Manufacturers Association, head of advocacy Alan McDonald said he thought most were aware of what they needed to do.
“We’ve had a slight increase in calls around KiwiSaver but they are mainly confirming the date it will kick in and how they do it when they are using the total remuneration approach. The increase is no more than we would get when there is any new bit of legislation coming in.
“The same applies to the new minimum wage kicking in – again a slight increase in calls mainly confirming the timing and how much of an increase.”
When someone was paid by total remuneration – where the employer set an amount the person was paid and both their employer and employee KiwiSaver contributions were taken from that – they would have to fund the combined 1 percent increase.
Deloitte tax partner Robyn Walker said there seemed to have been more reminders coming from Inland Revenue.
Commentators earlier said it was likely to mean that overall people received lower pay rises this year than might otherwise be the case.
“In the end, employers will pay a total level of remuneration in line with prevailing supply and demand trends in the market,” Westpac chief economist Kelly Eckhold told RNZ.
“Changing the allocation of what employees do with that remuneration is not likely to change that assessment. Having said this it will be impossible to know the counterfactual as we can only observe what employees are paid as opposed to what they might have been paid.”
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
