How does salary sacrifice/total remuneration for KiwiSaver work?

Salary Sacrifice/Total Remuneration (definition)

Employers may choose to include their 3% Kiwisaver contribution in an employees gross salary or wages to ensure everyone is paid equally, regardless of whether they are a member of Kiwisaver. This deduction is referred to as “Salary Sacrifice” and is included in the employee’s fixed remuneration, as outlined in the employee agreement. It’s important to note the employer cannot pay the employee less than minimum wage after the deduction.

Salary Sacrifice/Total Remuneration can be added into an employee’s Default pay in PayHero to ensure 3% is deducted from their earnings. Holiday Pay will then be calculated on every employee’s full total remuneration package during payroll processing.

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