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KiwiSaver Guide — Contributions, Withdrawals, and Tax Rules in NZ

the KiwiSaver scheme in New Zealand. The guide covers the KiwiSaver membership and the contribution rates (3%, 4%, 6%, 8%, 10%), the employer contributions (3% minimum), the government contribution ($521.43 per year), the KiwiSaver first home withdrawal, and the KiwiSaver tax treatment (the PIE tax rate).

KiwiSaver Contributions

The KiwiSaver members can choose the contribution rate of 3%, 4%, 6%, 8%, or 10% of the gross salary and wages. The employer must contribute the minimum of 3% of the gross salary (the "employer contribution"). The employer contributions are subject to the Employer Superannuation Contribution Tax (ESCT) based on the employee's marginal tax rate. The government provides the annual KiwiSaver contribution of up to $521.43 (the "member tax credit" — 50 cents per dollar of the member contribution up to $1,042.86 per year). The contributions are invested in the KiwiSaver fund chosen by the member (the conservative, the balanced, the growth, or the aggressive fund).

KiwiSaver Withdrawals

The KiwiSaver funds can be withdrawn in the following circumstances: (a) the first home purchase — the member can withdraw the member contributions (not the employer or the government contributions) after the 3 years of the membership, (b) the significant financial hardship — the early withdrawal approved by the KiwiSaver provider, (c) the permanent emigration — the withdrawal of the funds (less the tax) when the member permanently leaves New Zealand (the "overseas withdrawal" — the tax applies at 15% for the PIE funds and 28% for the non-PIE funds), (d) the serious illness — the full withdrawal on the medical grounds, and (e) the retirement — from the age of 65 (the NZ Super qualification age).