As the National Council members toured the AGMs over the past few weeks the issue of the calculation of the kiwisaver deductions and relevant taxes was raised by those who have been contribution to a complying Kiwisaver scheme as well as a non-compliant Superannuation Scheme such as FireSuper.
FENZ had notified 592 members that they were affected by FENZ’s non-compliance of compulsory employer contributions to their Kiwisaver account as they had been paying all employer contributions into the other superannuation account such as FireSuper.  For all the background information on this issue go here.
Members were informing us that they did not think the calculations for the Kiwisaver deductions or the resulting tax was accurate and felt it was not clear on their payslips so we asked FENZ for an explanation of their methodology and confirmation of the order of the deductions.
The explanation provided is as follows:
- KiwiSaver contributions are calculated at 3% of the total gross pay. FENZ first calculates the total taxable pay and allowances to work out the 3% KiwiSaver contributions.
- FENZ recognises that the KiwiSaver ER Gross Recovery amount is showing in the deductions section of the payslip and state this is because it is the only place hey can show it given it is taken after total gross pay. FENZ states they cannot arrange that list to show the order in which the deductions are processed but the true order is:
– KiwiSaver ER Gross Recovery (this is 3% compulsory employer contribution as calculated on the gross wages)
–Â Tax
– Other deductions/superannuation
- The KiwiSaver ER Recovery amount is before tax.
- The Amounts shown at the bottom of the payslip under Super and KiwiSaver, are the net values contributed to the superannuation schemes, after tax. Therefore ESCT (Employer Superannuation Contribution Tax)  has come off these amounts.
- Many have noticed the difference between the KiwiSaver ER Gross Recovery figure and the KiwiSaver – Employer figure. That difference is ESCT, which depending on the income level of the individual could be 30%, 33% or 39%
FENZ also provided a pay slip example where both Kiwisaver and FireSuper deductions have been made.
If the above does not explain your query or you think the deductions are incorrect then please contact payroll direct and request an explanation of the calculations made. If, after receiving that information, you still think it is incorrect then please contact the union detailing the issue and ask for assistance.
In unity,
Wattie Watson
National Secretary
