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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.

Under the current law there are two approaches an employer can take:

A default approach: 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.

A 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.


The Total Remuneration feature in Ace Payroll can only be enabled for salaried employees.



To enable Total Remuneration
  1. From the front screen click Setup from the top window menu bar, then Extremely Fine Tuning, then Enable Total Remuneration as shown below.



  2. Click Go.

  3. From the front screen click Employee then Modify Employee Details.

  4. Click Salary, then enter the total agreed salary including KiwiSaver Employer Contributions.

  5. Place a tick next to Total Remuneration, then click Go.

If Total Remuneration is ticked, 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. See Personalising payslips for more information.

 

 

 

 

        
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