There will be circumstances; as agreed between the employee and employer and stated within the Employment Agreement; where employees may not wish to contribute to a KiwiSaver and wish to contribute to a super fund of their choice or they may wish to contribute to both a KiwiSaver and to a super fund of their choice.
The scenarios and the instructions on how you would set this up are outlined below:
Scenario 1. Contribute to another Super Fund (without a KiwiSaver)
You will need to complete the set up for contributing to a Super fund.
Scenario 1_Step 1: Firstly you need to set up the following;
This needs to be set up at a business level and can be created from your payroll dashboard > Payroll Settings > Deduction Categories and Employer Liability Categories.
Doing so makes the categories available for selection from within the employees file.
Scenario 1_Step 2: Add the deduction for the employees super fund contribution. Go to the employees file > Pay Run Inclusions
. Enter the employee's super fund contribution percentage and details as per employment agreement.
Note: ensure you have added the super fund's bank account details within the employee's profile > bank accounts
so that you can select the super fund's bank account for the deduction to be paid into.
Scenario 1_Step 3. Add the Employer Liabilities from the employees file > Pay Run Inclusions > Employer Liabilities
. Enter the Employer super fund contribution details as per the employment agreement.
Note: It is recommended that the 'Fixed' amount is entered in if the employer super fund contribution should be less of ESCT. The system will not deduct the ESCT from the employer super fund contribution portion.
Scenario 1_Step 4: Add the Employer liability for the ESCT amount from the employees file > Pay Run Inclusions > Employer Liabilities
. Enter the ESCT details as per the Employment Agreement.
Note: It is recommended that the 'Fixed' amount is entered for the ESCT, as the system does not calculate the ESCT rate from the employer super fund contribution portion.
For this scenario 1, the employer super fund contribution amount will need to be paid manually, directly to the super fund, outside of payroll.
The ESCT amount will need to be reported to the IRD manually and paid to the IRD manually outside of payroll.
Scenario 2. Contribute to both a Super Fund and KiwiSaver
Contributing to a KiwiSaver is automatically calculated in the pay run. However you will need to complete the set up for contributing to a Super fund.
The below steps is how you do this where you/employee wish to contribute to both KiwiSaver and a super fund.
Scenario 2_Step 1: Follow the above steps in Scenario 1_Step 1 and Step 2.
Scenario 2_Step 2: Instead of adding the employer liability for the ESCT amount, you would set up a KiwiSaver Adjustment which will auto populate the ESCT field within the pay run. You can do this directly from the employees Pay Run Inclusions > KiwiSaver Adjustments
For this scenario 2, the employer super fund contribution amount will need to be paid manually, directly to the super fund, outside of payroll. Note that the ESCT super fund portion will be reported to the IRD via payday filing as part of payroll.
In the pay run
Once the above steps have been completed (for scenario 1 or scenario 2), in the next pay run, the employee, employer and or ESCT super fund contribution will be shown as follows:
To break it down, if contributing to both KiwiSaver and a super fund, the difference is that the ESCT amount relevant to the super fund is added as a KiwiSaver adjustment..
If contributing to only a super fund (i.e. no KiwiSaver) then the ESCT amount relevant to the super fund is added as an employer liability.
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