Learn how to handle KiwiSaver contributions from two or more employers in New Zealand. Discover the steps to ensure your retirement savings align with your financial goals. Take control of your KiwiSaver contributions and make informed decisions for a secure future.
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“I read from the IRD page and am still confused.
What should I do when I sign up for the second contract? Do I need to send IRD a deduction request form before that?
Also What if I just do nothing to let IRD charge whatever they want?
Seeking for advice, thank you”
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When you have two or more employers in New Zealand and you are contributing to KiwiSaver from multiple income sources, it’s important to ensure that your KiwiSaver contributions are handled correctly. Here’s what you should do:
Provide Your KiwiSaver Details to Both Employers:
When you start a new job with a second employer and you’re already a KiwiSaver member, you should provide your KiwiSaver details to your new employer. This includes your IRD (Inland Revenue Department) number and the name of your KiwiSaver provider. They will use this information to deduct the appropriate KiwiSaver contributions from your pay.
Choose Your Contribution Rate:
You can choose the KiwiSaver contribution rate that you want to apply to your income from each employer. The default rate is 3%, but you can opt for a different rate (e.g., 4%, 6%, or 8%) based on your preferences. You can also choose to contribute at a percentage that equals your income, meaning all your income from that job goes to your KiwiSaver account.
No Need to Send Deduction Request Form:
You don’t need to send an IRD deduction request form before starting your second job. As long as you provide your KiwiSaver details to your new employer, they will set up the deductions based on your chosen rate.
Consolidating Contributions:
If you’re concerned about making extra contributions or having the right amount deducted from both jobs, you can adjust your contribution rate with each employer. For example, you might choose a higher rate with one employer and a lower rate with the other to balance your contributions.
IRD Handling Contributions:
If you choose not to do anything and let the IRD handle your KiwiSaver contributions, they will charge you at the default rate (usually 3%) on your total income from both employers. While this is an option, it may not be the most tax-efficient or beneficial approach, as you might end up contributing more than necessary.
It’s generally recommended to take control of your KiwiSaver contributions to ensure they align with your financial goals. By providing your KiwiSaver details to both employers and selecting your contribution rates, you have more control over your retirement savings. If you have specific concerns or questions about your situation, consider consulting with a financial advisor for personalized guidance.
Hope this helps.
Regards, Clive Fernandes (Financial Adviser)
Director – National Capital
Disclosure: I am the director of National Capital, a KiwiSaver advice firm. The views expressed in this article are the views of the author. The information provided is of a general nature and is not intended to be personalised financial advice. You may seek appropriate financial advice from a Financial Adviser to suit your individual circumstances or contact National Capital.
