An employee can apply to Inland Revenue for a contributions holiday after they have been a member of KiwiSaver for a year, or earlier in exceptional circumstances. If Inland Revenue approves the application, they will send a letter to the employee and to their employers, stating that the employee is on a contributions holiday and when the contributions holiday is due to expire. A new employee may also show you a contributions holiday letter.
An employee can request contributions to be made during their contributions holiday. These contributions are treated as voluntary and will therefore be subject to Employer Superannuation Contributions Tax (ESCT).
|title||To record the contributions holiday|
- Go to the Maintenance command centre and click Maintain Employees.
Click Select Employee.
Click the applicable employee then click OK.
Click the Compulsory Deductions tab.
Select the option On a contributions holiday and enter an expiry date. Currently we can't enter dates beyond 2019. An update will be made available to fix this issue.
|title||To contribute to KiwiSaver during a contributions holiday|
Go to the Maintenance command centre and click Maintain Employees.
- Click Select Employee.
- Click the applicable employee and click OK.
Click the Compulsory Deductions tab and deselect the option On a Contributions Holiday.
- Click Close.
Go to the Maintenance command centre and click Maintain Pay Codes.
Select the KIWI (KiwiSaver) pay code.
- Click the General tab,
- Select the option Allow rate to be modified when entering pay details as shown below.
- Go to the Prepare Pays command centre and click Enter Pays.
- Double-click the applicable employee.
In the Rate column for the KIWI pay code, change the rate to 0.00 as shown in the example below.
|UI Text Box|
You'll need to do this each time a pay is put through for the employee.
- Continue processing the pay as you would normally.
<h2><i class="fa fa-comments"></i> FAQs</h2><br>
|title||What happens at the end of the contributions holiday?|
Prior to the contributions holiday expiry date, Inland Revenue will send you a letter reminding that you need to start making KiwiSaver deductions again from the next pay following the expiry date.