Total Remuneration is when an agreed salary package - say, $50,000 a year - includes the value of the KiwiSaver Employer contribution and any associated taxes.
Without a Total Remuneration clause, it is possible to have two employees being paid different amounts for doing an identical job.
If both employees earn $50,000, but one joins KiwiSaver and gets a KiwiSaver Employer Contribution on top, the employee in KiwiSaver earns and costs more than the employee who is not in KiwiSaver. The existence of a Total Remuneration clause in the employment contract eliminates this inequality.
The Total Remuneration feature in Ace Payroll can only be enabled for salaried employees.
Under the current law there are two approaches an employer can take:
|This is the standard approach taken by employers. If an employee joins a KiwiSaver scheme, the employer contributions are paid in addition to the employee's gross salary or wages.|
Total remuneration approach
|This allows an employer to set a fixed remuneration amount for each employee. If the employee joins KiwiSaver, the cost of the employer contribution comes out of the employee's pay.|
|title||To enable Total Remuneration|
- From the front screen choose Setup from the top window menu bar, then click Extremely Fine Tuning.
- Scroll down and lick Enable Total Remuneration, then click Go.
- From the front screen click Employee > Modify Employee Details > Personnel.
- Click Salary, then enter the total agreed salary, including KiwiSaver Employer Contributions.
- Click Total Remuneration, then click Go.
|UI Text Box|
If Total Remuneration is turned on for an employee, the actual salary paid is reduced by the amount of the employer KiwiSaver contribution. When KiwiSaver employer contribution rates change the salary alters automatically.
If the annual salary shows on the employee payslip, it is the gross salary that is shown, inclusive of KiwiSaver employer contributions. You can alter the way information is shown on your employee payslips.