Sleep Well #3: KiwiSaver Tips for the Self-Employed
KiwiSaver is a voluntary, work-based savings initiative to help you with your saving for retirement.
KiwiSaver is for everyone – you can be self-employed and still make your own contributions.
KiwiSaver is very flexible if you’re self-employed. And if you don’t receive payments that you deduct PAYE from, you can decide how much to contribute to KiwiSaver each year.
Some KiwiSaver schemes require a minimum contribution level – make sure you check it with your KiwiSaver provider.
Bonus from the Government
As a self-employed person not receiving PAYE amounts, you can enjoy all the benefits of KiwiSaver except the employer contributions.
If you’ve put $1,043 into your KiwiSaver account from 30 June last year, the Government will put an additional $521 into your account (also called a member tax credit). You get 50c per $1 contributed annually up to a maximum payment of $521. It’s free money and the Government helps to top up your KiwiSaver account by up to 50%! 👍
If you’ve been in KiwiSaver for less than a year (joined between 1 July and 30 June), you’ll receive a partial member tax credit based on the number of days in the year you’ve been a member. KiwiSaver members under the age of 18 aren’t eligible for the tax credits.
Are you trying to save for your first home?
Saving for your first home
Another benefit of making KiwiSaver contributions is that if you’re eligible you can take advantage of the first home buyer’s benefit. Make sure you check all the eligibility criteria.
When will I get my bonus?
According to the KiwiSaver website: “Your KiwiSaver provider will claim the tax credit on your behalf after 1 July each year. You don’t have to do anything. Your member tax credit will appear in your KiwiSaver account within a month of your provider making the claim. Member tax credit ceases when the member reaches the age of eligibility for NZ super (currently 65) and has been a member for at least 5 years.”
How do you make sure you maximize your bonus? Some self-employed people we’ve talked with have been transferring $87 per month ($1,043 a year) to their KiwiSaver scheme to make sure they get the maximum Government contributions.
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The information provided here is of a general nature. It is not intended to be a substitute for professional advice.