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$521- Yours for the Taking
KiwiSaver Employer Contributions
Beating a Housing Bubble
To maximise your full MTC entitlement of $521.43 you need to have personally contributed at least $1042.86 (the equivalent of $20 per week) into your KiwiSaver Account. Many KiwiSaver Scheme members contribute KiwiSave employee contribtions through their wages, and in many cases these personal contributions made in this fashion in the year July 1- June 30 do not total up to $1042.86.
You are unlikely to get a better return on your money than this 50% return so you should consider making a further lump sum add-on investment to achieve the $1042.86 of personal contributions during the year so as to achieve the full MTC entitlement that the Government will pay out to your Scheme.
You can do this by paying direct to your KiwiSaver Scheme Provider and indicating it relates to your particular Fund. Many Providers will require this 3-4 days prior to 30 June.
Employers are required to contribute to your employee's KiwiSaver account at a minimum 3% of their gross salary or wage.
KiwiSaver employer contributions need to be paid with your PAYE to IRD.
You need to make contributions if your employee:
Your employer compulsory contributions must be on top of your employee’s regular pay. This means that if you have agreed to a total remuneration package with your employee, the compulsory employer contributions must be paid on top of that package. Your employee’s take-home pay should not be reduced because you are making a compulsory contribution.
Through good faith bargaining, a salary package under an employment agreement can be negotiated whereby compulsory employer contributions can be offset against the employee’s gross pay.
Compulsory employer contributions must vest in the employee immediately.
3% is the minimum contribution rate. You can make additional voluntary contributions if you wish.
Here's the formula to use if you're not currently contributing to your employees' superannuation:
Payment of gross salary or wages x compulsory rate = minimum gross employer contribution
If your employee earns $2,600 a month and is a member of, and is contributing to a KiwiSaver scheme, the minimum gross compulsory employer contribution will be:
$2,600 x 3% = $78.00
You only need to pay the compulsory employer contribution if your employee is a member of and is contributing to a KiwiSaver scheme.
Employer contributions must be made through IRD and be accompanied by an Employer Deductions Form (IR345) form. You must also include payment details on your Employer Monthly Schedule (IR348). IRD hold employer contributions until payment is cleared by your bank and then pass them on to the provider.
When adding your employer contributions to your Employer Monthly Schedule and your Employer Deductions Form, make sure the amount is net of any tax withheld.
Employer superannuation contribution tax (ESCT) is a tax deducted from the employer cash contributions you pay into the employee’s KiwiSaver account.
The exception to this is if you and your employee have agreed to treat some or all of your employer contribution as salary or wages under the PAYE rules.
For new employees, you start paying contributions from their first pay. For existing employees, you pay contributions from their first pay after either IRD or the employee notifies you that they have joined a KiwiSaver scheme.
You can stop contributions if the employee elects to take a contributions holiday or when we advise you to stop making contributions.
You are no longer legally required to pay compulsory employer contributions for employees who have reached their withdrawal date (for example, age 65). However, you may have a contractual employment agreement obligation to continue making employer contributions or you may make voluntary employer contributions.
If a new employee opts out of KiwiSaver, IRD will refund you the employer contributions you've made for the employee automatically. Any tax, withheld on employer contributions, for your employee that has opted out, will be refunded to you on request. You can do this by either:
IRD pay interest on employer contributions from the date they receive payment, and until the date they submit these to the KiwiSaver sceme provider.
Employers must make compulsory employer contributions on backdated payments of salary or wages and holiday pay from which member contributions are deducted.
BEATING A HOUSING BUBBLE
How do you recognize signs of a housing bubble?
That’s the question many prospective homebuyers -- and current homeowners --may be are asking themselves these days. As home prices rise at high % annual rates in some areas, many wonder if residential real estate is falling prey to the same kind of wild speculation that has led to the stock market’s spectacular downfall in previous years.
time there’s a disconnect between prices and the underlying value of
homes, as measured by their market rents, there’s the potential for a
If home prices are rising much faster than rents, that’s a strong indication a bubble is forming.
If home prices are rising while average rents are falling the bubble is pretty much unmistakable.
could trigger a collapse?
Identifying a bubble and actually predicting when it will burst are two very different matters, of course. The nature of a bubble is to feed on itself, with rising prices convincing more and more investors that prices can only continue to rise.
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