Accountancy in New Zealand

>> Employment in New Zealand

Social security /Unemployment taxes

There is no compulsory Social Security or Superannuation in New Zealand however there is a voluntary savings scheme called KiwiSaver which is outlined below. Some companies run private schemes for their employees. A specified superannuation contribution is any contribution to a superannuation fund that an employer makes for the employees’ benefit.

Any contribution an employer makes to a superannuation fund for the benefit of an employee is liable for Employer Superannuation Contribution Tax (ESCT) and is discussed further below.

Kiwi saver & ESCT

Kiwisaver is a voluntary savings scheme which started on 1 July 2007 and is open to all employees aged between 18 and 65 in a permanent job. The employee can choose whether to contribute 3%, 4% or 8% the gross wage.

All new employees are automatically enrolled and must opt out if they do not want to be a part of the scheme. There are restrictions and conditions as to when the amounts may be withdrawn, but you can choose to take a temporary break from saving, known as a contributions holiday.

The Government matches an employee’s contribution by up to $521.43 each year. To get the full member tax credit automatically the employee needs to contribute at least $1,042.86 a year, the employer contributions and government contributions do not count towards this.

If the employee contributes less than $1,042.86 they have the opportunity to make a voluntary contribution to top up their Kiwisaver contribution and ensure the full member tax credit payment from the Government is received.

Employers play an important role in KiwiSaver by deducting the KiwiSaver contributions from the employees pay while also being required to make a compulsory employer contribution equal to 3% of the gross wage for each employee that participates in the KiwiSaver scheme.

Employer contributions are subject to ESCT that must be deducted from all employer superannuation cash contributions at a progressive tax rate, which is based on the marginal individual tax rates of each employee.

The ESCT will not place a financial burden on the employer but will reduce the net contribution that the employee receives from their employer into their KiwiSaver or complying fund account.

Recently the New Zealand and Australian governments have agreed to allow Australian individuals to transfer their superannuation funds to New Zealand if they permanently immigrate to New Zealand.

Employment of foreign personnel

In order to employ foreign nationals in New Zealand for periods up to a maximum of three years, a number of criteria must be satisfied. The employee must have job offer for an occupation on the immediate skill shortage list, from a New Zealand employer who has approval to recruit foreign nationals, or where the employer can prove there are no suitable New Zealand workers available for the job.

A specific purpose or event may be available for applicants where their skills or expertise will benefit New Zealand. The following is required:

  • The employee must have sufficient funds to pay for accommodation and meals or alternatively these can be guaranteed by the employer;
  • The employee must be in good health and of good character;
  • The employee must hold a valid passport; and
  • Complete an application form and pay the applicable fee.

Medical

Government funding of health services provides eligible people may receive free inpatient and outpatient public hospital services, subsidies on prescription items and a range of support services for people with disabilities in the community. People eligible for the health service are:

  • New Zealand citizens
  • New Zealand permanent residents
  • Work Permit Holders
  • Overseas students funded by certain official programs
  • Teachers in the Foreign Language Teaching Assistants Scheme.

General practice visits to doctors, pharmaceutical drugs or medicines are generally free for children under thirteen years old but everyone else who is eligible for publicly funded healthcare pays a co-payment. The cost depends on that particular drug.

General dental care for people over 18 years is not funded. Any person in New Zealand can choose any dentist and receive treatment as a private patient.

The Accident Compensation Corporation (ACC) is a Government agency that provides 24-hour, no-fault personal accident cover for New Zealanders, New Zealand residents who are temporarily overseas, and visitors to New Zealand. Individuals also have the choice of covering themselves with medical insurance which is available in various forms and which covers a wide spectrum of illnesses.

Payroll taxes

There are no payroll taxes for employers.


Latest version updated 5th April 2019

Country Breakdown

4.693

Million

Population

$

New Zealand Dollar

Currency

$ 185

Billion

GDP

268,021

km2