IRD will work with you to help you meet your KiwiSaver obligations.

When something does go wrong, for example you do not deduct KiwiSaver contributions for an employee, IRD will send you a reminder. This will be followed by a notice to warn you that IRD may charge you a penalty if you do not meet your obligations in the future.

What KiwiSaver penalties are for

You may be given a KiwiSaver penalty for:

  • not providing KiwiSaver information to your employees or to IRD
  • not making the correct KiwiSaver deduction when required to do so
  • not automatically enrolling a new eligible employee (unless you’re an exempt employer)
  • not making compulsory employer contributions.

The penalties are either:

  • $50 per month if you’re a small employer
  • $250 per month if you’re a large employer.

When IRD waive a penalty

IRD do not penalise you if:

  • your employee chose not to give you information or gave you the wrong information
  • you could not give your employee a Your introduction to KiwiSaver – KS3. But only when IRD had not supplied them to you. (You need to tell us that you’ll need further copies as soon as possible).

Standard tax penalties and knowledge offences

As well as KiwiSaver penalties, there are standard tax penalties and knowledge offences. These happen when you’ve not paid, or paid late either a:

  • KiwiSaver employee deduction
  • compulsory employer contribution
  • voluntary employer contribution.

Standard tax penalties and knowledge offences for KiwiSaver are like those for PAYE, such as:

  • late payment penalties
  • late filing penalties
  • use of money interest.

Reference: https://www.ird.govt.nz/kiwisaver/kiwisaver-employers/kiwisaver-penalties

Penny Varley

Payroll Administrator