Last year over half of the adults who had KiwiSaver did not contribute or did not contribute enough to their savings to receive the $521.43 government tax credit – this means over $300 million is being left on the table every year.
Who can get the tax credit?
If you are 18 years or over and have made contributions of at least $1,043 to KiwiSaver fund, you will be eligible for a member tax credit up to $521.43. The exact amount you get will depend on the amount of time you have been enrolled in the scheme and also your contribution level as the government only contributes $0.50 for every dollar you contribute up to the maximum of $521.43 (employer contributions are excluded in this calculation).
Note that your eligibility for the tax credit ceases when you reach the age of 65 and have been a member for five years.
How do I make contributions to KiwiSaver fund?
If you are enrolled in a KiwiSaver scheme and employed, your employer will automatically deduct either 3%, 4% or 8% of your pay (you can elect what percentage you wish to contribute). If your annual gross pay is more than $34,766 your employee contributions will be sufficient to receive the full member tax credit. If you earn less than $34,766 you may want to think about making additional voluntary contributions to ensure you are eligible for the full tax credit. You can talk to us if you would like more information about making voluntary contributions or would like us to check if you are contributing enough.
Our experience shows that typically those that miss out on receiving the full tax credit are:
- Non-workers e.g. Homemakers
- Part time or low income employees
If you fall into one of the above categories and you are not quite sure if you have contributed enough to receive your $521.43, we are happy to contact your provider on your behalf and check (and if you are unsure of who is looking after the KiwiSaver, that’s ok as we can find that out too). To request our help on finding out, just fill in the form below.
When are the tax credits paid?
You should receive a member tax credit in KiwiSaver account around July or August every year. This means that you need to make sure you have contributed your $1,043 by the end of June if you are wanting to qualify for the full member tax credit for that year.
If you want to learn more about KiwiSaver, give Sam Kodi a call.