Personal finance and KiwiSaver columnist at the NZ Herald

Helen Twose: Workers can make employers' payments

Staff can make both the employee and company contributions, provided wages rise accordingly.

Employer contributions must be paid on top of, rather than deducted from, gross pay. Photo / File
Employer contributions must be paid on top of, rather than deducted from, gross pay. Photo / File

I have a question, that you may or may not be able to answer, as no one else I have spoken with so far has been able to help.
I have spoken to my recruitment agency, IRD, my KiwiSaver provider and have tried to seek legal advice all to no avail.
It seems that things get tricky when there is an agency involved.
I'm contracting to my current office job through a recruitment agency.
The recruitment agency in my eyes is my employer.
I'm on a fixed-term contract, they pay my PAYE tax and my contract has provisions for being entitled to holiday pay, sick leave, bereavement leave etc.
(However, I am on a salary, and get paid the same amount fortnightly based on a 37.5 hour work week, regardless of the hours I work and whether I take leave _ I'm not sure if that's of importance).
After opting out of KiwiSaver initially, I decided recently to join.
After receiving my first payslip since joining KiwiSaver I noticed that my agency was taking off me both the employer AND employee contribution amounts.
When I queried this with my agency they told me that this was correct, I should be paying for both contribution amounts as to them I'm deemed to be a self-employed contractor, but I don't think that's right.
I don't think that I should have to pay for the employer contribution amount.
Is there anything I can do?

There is no concept of a "self-employed contractor" under the KiwiSaver Act.

It is legal to have an employee "pay" for both the employee and employer contributions, but only if the parties have agreed to the arrangements in good faith and the contract "accounts for" the employer contributions.

What this has generally been taken to mean is that the person's pay is increased by the amount of the employer contribution.

Otherwise, employer contributions must be paid on top of, rather than deducted from, gross pay (and any deduction of employer contributions from the employee's pay will be illegal).

There is only one exception to this general rule in the KiwiSaver Act and that relates to "private domestic workers".

A private domestic worker means a person employed by any other person if: (a) the employer is the occupier, or one of the occupiers, of a residential home; and (b) the employment is for the performance of work in or about the home or premises or the garden or grounds belonging to the home or premises; and (c) the employment is not for a business carried on by the employer or an occupation or calling of the employer; and (d) the employment is not regular full-time employment.

Under the KiwiSaver Act, a private domestic worker is treated as both an employer and an employee.

Because of this treatment, the private domestic worker's actual employer has no KiwiSaver employer contribution obligations and the worker has both employee and employer contribution obligations.

The reader says he/she is in an office job, so it would appear that the provisions for private domestic workers do not apply.

It would seem that unless a total remuneration arrangement is in place, which allows the employer to deduct the employer contribution from the reader's gross pay (as described above), then employer contributions should not be deducted from the reader's pay, but should be paid in addition to his/her salary or wages.

Emma Harding, Chapman Tripp senior solicitor.

I have been a KiwiSaver member for more than four years now.
I recently bought a house _ my first home _ with a settlement date in three weeks' time.
As the vendor wants to settle the sale early the price was negotiated to give us a good deal.
My lawyer has advised me that I cannot have the Housing New Zealand First Home Subsidy in time for the settlement date and hence would be in risk of voiding the agreement.
My question is can we get the subsidy application processed in a fast track mode or can we get the subsidy later if possible?

The Housing New Zealand website states that you need to send your application for the deposit subsidy at least four weeks before settlement date.

As you are outside that timeframe you will need to contact them immediately to see whether your application can be processed in time.

Note the first home deposit subsidy is different from the first-home withdrawal, which is looked after by your KiwiSaver provider.

With the first-home withdrawal you may be able to take out some or all of your KiwiSaver savings (except for the $1000 kick-start and member tax credit) to put towards buying your first home, after you have been in KiwiSaver for a minimum of three years.

The first home deposit subsidy is a separate amount you may also be eligible for after you have been in KiwiSaver for at least three years. The subsidy is $1000 for each year you have contributed to KiwiSaver, up to a maximum of $5000.

Applications for the subsidy are handled by Housing New Zealand and the eligibility criteria includes income and house price caps.

Full details are on the Housing New Zealand website at

Joe Bishop, Kiwibank head of wealth products.

Disclaimer: Information provided is stated accurately to the best of the respondent's knowledge at the time of publication. It is general in nature and should not be construed, or relied on, as a recommendation to invest in a particular financial product or class of financial product. Readers should seek independent financial advice specific to their situation before making an investment decision.

To have your KiwiSaver questions answered by the NZ Herald's panel of industry players email Helen Twose,

- NZ Herald

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Personal finance and KiwiSaver columnist at the NZ Herald

Helen Twose is a freelance business journalist who writes regularly about KiwiSaver and entrepreneurial companies. She has written for the Business Herald since 2006, covering the telecommunications sector, but has more recently focused on personal finance and profiling successful businesses.

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