Of the 500 companies surveyed by the Commission for Financial Capability in May, only 55 per cent of employers paid the 3 per cent on top of wages. Ten per cent paid it out of the employees’ salaries, 20 per cent weren’t sure, 10 per cent said it ‘varied’, and 5 per cent offered other pension schemes.

Employers can only legally include KiwiSaver contributions in salary packages if they have negotiated this with the employee “in good faith”, David Boyle, education manager at the Commission, says in a press release.

“If you have two staff on the same wage, and one has the employer’s 3 per cent KiwiSaver contribution paid on top and one has it included in their salary, the worker with it included has essentially taken a 3 per cent cut in their take-home pay,” Boyle says.

“It’s not surprising if a number of these employees do not contribute to KiwiSaver.”

By the end of June 2017, more than 520,000 KiwiSaver members had not contributed anything to their accounts, missing out on $270 million in government contributions. This was likely for a number of reasons, but Boyle says employers need to be more aware of their obligations to staff.

“Legislation requires them to pay their 3 per cent on top of wages, and if they want to negotiate to include it in an employee’s package, then in good faith they should increase that person’s salary by 3 per cent,” Boyle says.

If an employee thinks their employer is not meeting their legal obligations, they can complain anonymously to the Inland Revenue Department.

KiwiSaver members have until 30 June to make sure they’ve put NZ$1,042.86 into their KiwiSaver accounts for the year, to claim the full $521 in government tax credits.

Experts say it’s wise to contribute it before mid-June, to make sure the payments are processed in time.

How do you qualify for the tax credit?

You’ll receive it if you’re contributing NZ$1,042.86 each year into your KiwiSaver account, or another complying fund, if you’re aged between 18 and 65, and you’re living mostly in New Zealand.

Find out more at kiwisaver.govt.nz or ask your KiwiSaver provider.

First published 14 June, 2018

JUNO does not contain financial advice as defined by the Financial Advisers Act 2008. Consult a suitably qualified financial adviser before making investment decisions. This story reflects the views of the contributor only. Content comes from sources that JUNO considers accurate, but we do not guarantee that the content is accurate.