The AMP KiwiSaver Scheme is a savings scheme that helps you to build your retirement savings in a number of ways, including employer, employee and voluntary contributions.
Making regular contributions to your KiwiSaver account can make a huge difference to your future, helping you to secure your first home and enjoy a more comfortable retirement.
How you contribute to your KiwiSaver account will depend on your situation. But no matter what stage of life you’re in, or whether you’re full-time or part-time employed, running your own business or not working at all, there are always options to contribute.
When you start a job in New Zealand that pays you using the PAYE system, you’ll generally have the option to select how much of your gross salary or wages you want to contribute to KiwiSaver: the default minimum contribution rate of 3%, or an elevated rate of 4%, 6%, 8% or 10%.
Your employer will make deductions at your chosen rate (as shown on the KiwiSaver deduction form) and pay the funds to Inland Revenue (MyIR), who will then transfer the funds to your KiwiSaver scheme provider.
You can also make voluntary contributions to your KiwiSaver. These can either be regular or ad hoc.
For every $1 that goes into your KiwiSaver account (up to $1042.86), the government will contribute 50 cents (up to $521.43) each year. If you are self-employed or unemployed it is up to you how much you contribute to KiwiSaver, and the government contribution will still apply.
The appropriate level of KiwiSaver contributions will depend on your situation and circumstances. We encourage you to seek professional advice on your optimal contribution rate.
Making regular contributions can help to set you up financially, and can make an incredible difference at key moments of your life:
For every $1 you contribute the government will contribute 50 cents (up to a maximum government contribution of $521.43) per year.
With KiwiSaver you can watch your contributions grow over the long term through investing.
There’s no need to wait for your retirement withdrawal – you can use your KiwiSaver to place a deposit on your first home.
When you retire your voluntary contributions can make your post-work life all the more enjoyable.
If you are employed, your employer must make compulsory employer contributions equivalent to 3% of your gross salary or wage. You can also make lump sum or direct debit voluntary contributions at any time (see the ‘How to make voluntary contributions to KiwiSaver’ section below). As an employee you can choose to make voluntary contributions by increasing the minimum default contribution rate to 4%, 6%, 8% or 10%.
You can notify your employer to change your employee contribution percentage at any time, although not more than once every three months (unless your employer agrees otherwise), so it’s important that you think through how a change in percentage may affect you in the near future.
If you are an eligible employee who is contributing part of your pre-tax pay to KiwiSaver, your employer also needs to contribute at least 3% to your KiwiSaver account, as long as you:
Your employer may agree to make contributions over and above the minimum compulsory contribution rate. Some employers even offer to match their employee’s contributions as a perk. Check with your employer to find out. If your employer is already contributing to a registered superannuation scheme for you, you may not be entitled to compulsory employer contributions to your KiwiSaver account as well. Make sure you speak with your employer to confirm if they are already contributing for you.
Consult our KiwiSaver Employee Enrolment Guide to learn more about eligibility criteria, the minimum employer contribution rate, and your voluntary contribution options.
Voluntary contributions are a clever way to grow your KiwiSaver account. Between government contributions, voluntary contributions and the potential for healthy returns, KiwiSaver has a number of features designed to maximise your savings, ready for important life events like buying your first home or retiring from work.
1. Make a one-off voluntary contribution (up to $100,000).
2. You can set up regular direct debit voluntary contributions (no limit).
3. You can change the percentage of your pay that forms your voluntary contribution. You can also change the percentage of voluntary KiwiSaver contributions by logging into MyAMP and selecting the amount you would like to contribute.
For contributions through your bank's online banking system, you'll need your KiwiSaver number and your IRD number. After logging in, select AMP as the payee and enter the required details.
It’s wise to seek expert advice on how best to make these voluntary contributions, as everyone’s situation is different, and there are a number of factors to consider.
The closer you get to retirement, the more important your KiwiSaver contributions may become, as you’re closer to being able to access your savings (which occurs at age 65).
There are a number of KiwiSaver considerations to make as you approach this retirement milestone. Our KiwiSaver and retirement guide is a useful resource, or you can speak to an AMP retirement expert.
If you are currently contributing to KiwiSaver and have been a member of a KiwiSaver provider scheme for more than 12 months, you can take a contribution holiday, also known as a savings suspension.
A contribution holiday lets you temporarily stop making contributions for 3-12 months. While there are no limits to the amount of suspensions you can take, you do need to apply for each one with a valid reason, such as financial hardship.
Before applying for a contribution holiday you should carefully consider the impact of not contributing to your KiwiSaver for an extended period. It’s helpful to speak to a professional before making the decision.
The rate of tax you pay on KiwiSaver is called a prescribed investor rate (PIR). The rates are 10.5%, 17.5% and 28%, and your tax bracket is largely determined by how much you earn.
It’s wise to check whether you’re using the correct PIR. If it is too high, you may pay too much tax (which you may be able to claim back from Inland Revenue). If it is too low, you will probably need to pay additional tax to Inland Revenue.
Read more about your PIR rate here.
Self-employed workers are in total control of their KiwiSaver contributions. It is up to you to decide how much to contribute, and all contributions are considered voluntary (and are thus eligible for the government contribution).
As outlined above, self-employed workers can contribute to their AMP KiwiSaver account either through MyAMP or their online banking portal.
Given the importance of retirement savings, and the responsibility that self-employed people have to generate on their own, it’s wise to speak to a KiwiSaver specialist to understand the appropriate contribution rate for your situation.
KiwiSaver contributions play a critical role in making your retirement more comfortable, and even in helping you secure your first home. By regularly contributing just a small percentage of your earnings, you can generate a level of savings that can be truly life-changing.
But your KiwiSaver account isn’t something you should set and forget. You should look to maximise it at every opportunity, speaking to experts, checking government contribution rules and reviewing your strategy regularly.
A small amount of work today can ensure that your future is every bit as enjoyable as you hope it will be.
Always speak to a registered financial adviser when looking for general financial advice, such as the appropriate contribution rate in your situation.
Every Kiwi should work to maximise the value of their KiwiSaver account with regular contributions. Follow the links below to find out how to grow your savings for your retirement or for a first home deposit.
Your choice of KiwiSaver fund can make a huge difference to the amount of money you have to spend in retirement, and age, risk tolerance and financial goals should be taken into account. Here’s all you need to know.
The better prepared you are for retirement, the more enjoyable and comfortable it will be. KiwiSaver plays a significant role in retirement planning, so head to our hub to find out how you can live post-work life to the fullest, from understanding how much you need, to transferring over Australian superannuation.