ESCT changes

The following changes to Employer Superannuation Contribution Tax (ESCT) have been included in this version.

Removal of 2% ESCT exemption

Prior to 1 April 2012, the first 2% of an employer's superannuation contribution was exempt from ESCT.

This threshold has now been removed, meaning that from 1 April 2012 the entire employer superannuation contribution will be liable for ESCT.

Changes to ESCT calculation

From 1 April 2012, all or part of the value of the employer superannuation contribution can be included in the employee's gross salary or wages and taxed at their personal tax rates. This must be agreed by both the employer and employee.

Changes in VisionVPM

1. The None ESCT rate option has been removed from the KiwiSaver Details window.
2. A % of employers contribution will be included in the gross pay field has been added to the KiwiSaver Details window.

   If you have agreed with an employee to include some or all of your employer superannuation in their gross pay, you must enter

   • the total amount of the Employer contribution, and
   • the employer contribution percentage that is being included in the gross pay.
   • Please note, you cannot enter a % of employer contribution higher than the total Employer contribution.
3. A Employer makes other non-Kiwisaver superannuation contribution liable for ESCT field has been added to the KiwiSaver Details window.

   This change allows you to enter either a percentage or fixed $ amount for other employer contributions to complying funds. VisionVPM will then calculate the total ESCT based on all employer superannuation contributions for the employee.

   If you have selected this field, you must either enter a percentage or a $ amount, but not both.

KiwiSaver Details window in this version:

KiwiSaver Details window in previous version.