Employer Superannuation Contribution Tax (ESCT)

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Employer contributions to superannuation schemes are subject to employer superannuation contribution tax (ESCT), formerly specified superannuation contribution withholding tax (SSCWT).

The ESCT rate is calculated based on the employee's ESCT Threshold.  This is the total of the employee's gross salary or wages, plus any superannuation contribution paid by the employer to KiwiSaver or any other superannuation fund in the previous tax year (1 April to 31 March).  If the employee was not employed by your company for all of the previous tax year, the ESCT Threshold is estimated based on the total amount of salary or wages plus gross employer contributions that the employee with earn in the year ahead.

ESCT Threshold Amount

ESCT Rate

$0 - $16,800

10.5%

$16,801 - $57,600

17.5%

$57,601 - $84,000

30%

$84,001 and above

33%

 

For more information on the ESCT Rate, visit the IRD website

In FlexiTime the first pay processed on or after April 1st will trigger a recalculation of the employee's ESCT rate for the following year based on the following rules:

  1. In the first instance, FlexiTime will use the employee earnings for the previous year to determine the ESCT rate.

  2. If there are no previous year earnings, and the employee is salaried the Annual Salary amount entered on their Employment tab will be used to determine the ESCT rate.

  3. If there is no salary amount and no earnings history, the ESCT rate will default to 10.5%.

The default ESCT rate can be changed manually on the Employment tab under Employee Setup. It should be entered as a whole number (e.g 30 for 30%).

ESCT is calculated on each whole dollar of the employer contribution.

The IRD have created this video explaining ESCT.

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