What employers need to know about KiwiSaver savings suspensions
Sometimes an employee will ask to pause their KiwiSaver contributions. Here's how it works and what it means for you as an employer.
What is a savings suspension?
A savings suspension lets an employee temporarily stop their own KiwiSaver contributions. They apply directly to IRD - not through you - and if approved, IRD sends them a letter confirming the suspension period (usually 3 months to 1 year).
What does the employee need to do?
They need to give you a copy of their IRD savings suspension letter. This is your authority to stop deducting their contributions from their pay.
What about employer contributions?
When an employee is on a savings suspension, you don't need to make employer contributions either. Both employee and employer contributions pause for the suspension period.
Applying an approved Savings Suspension
If your employee has received a confirmation letter from IRD and shown this to you,
you can turn KiwiSaver off for the time the suspension applies to.
Go to Employees and select the employee.
Select Settings and click on KiwiSaver.
Toggle KiwiSaver to off.
Click Save.
Set up a note for when KiwiSaver needs to be turned back on
Go to Details and then Notes.
Click on the + sign above Actions on the right-hand side.
Add a Title to the note.
Add a Description relating to the suspension: for example, 'Suspension letter for KiwiSaver, turn back on 1 April 2027'.
Requires Action should be ticked on by default.
Add the date the suspension ends in Due By.
Owner and Permission default to Employer.
Click Ok.
You will be reminded in the pay run that the end date falls in (based on the note you have created) to turn this back on.