The default approach for KiwiSaver is that if an employee joins a KiwiSaver scheme, the employer contributions are paid in addition to the employee’s gross salary or wages. This means that where two employees are paid the same amount but one is a member of KiwiSaver, the KiwiSaver member is essentially paid 3% more.
A Total Remuneration approach allows an employer to set a fixed remuneration amount for each employee. If the employee joins KiwiSaver, the cost of the employer contribution comes out of the employee’s pay ("salary sacrifice"). This means that the two employees described above will receive the same total amounts.
To set up an employee with a total remuneration package in FlexiTime, simply add Salary Sacrifice / Total Remuneration to the employee's default pay tab (Setup > Employee > Edit >Default Pay), with a quantity of 3 (or whatever the agreed employer contribution % is). If this system pay code is not set up in your company, please contact FlexiTime support to have it added.
The KiwiSaver Employer Contribution line is retained in the default pay since the employer is still obliged to contribute to KiwiSaver. But the Salary Sacrifice line in the pay balances this out. Ensure that the Salary Sacrifice and Employer Contribution pay codes have the same Quantity.
To ensure an employee is not disadvantaged whether they are or are not in KiwiSaver, Holiday Pay is calculated on the full total remuneration package. For an employee in KiwiSaver this essentially means that holiday pay is paid on the employer KiwiSaver contribution. This is not the case using the default KiwiSaver approach.
If the employee has a KiwiSaver contributions holiday, you'll need to remove the Salary Sacrifice pay code from their Default Pay tab.