KiwiSaver ESCT calculation

Employer contributions to KiwiSaver funds are subject to the Employer Superannuation Contribution Tax (ESCT). Ace Payroll deducts this tax automatically, and the default setting is the Regular ESCT calculation method.

You can change this method to the Plus ESCT method if you want to.

For more information, see our ESCT section.

Calculation methods

ESCT Regular calculation

The minimum employer contribution is equal to 3% of the employee’ gross income. Using the ESCT Regular calculation method means that tax is deducted from that amount, so the employee receives less than than an amount equal to 3% of their wages.

The ESCT deduction is shown on the employee’s payslips. If KiwiSaver year to date totals are shown on the employee’s payslips, then so are year to date ESCT deductions.

Plus ESCT calculation

The minimum employer contribution is equal to 3% of the employee’ gross income. Using the Plus ESCT calculation method means that tax is paid on top of that amount, so the employer pays more than 3%, and the employee receives a full 3%.

Because this is an optional employer expense, the ESCT is not shown on the employee payslip. Using this method, ESCT is never shown as a year to date total on an employee’s payslip because it is an employer expense.

The amount of additional ESCT paid by the employer varies based on the marginal tax rate of the employee.

To change the ESCT calculation

From the front screen, click Employee > Modify Employee Details, select an employee then click KiwiSaver.
Or, from anywhere in Ace Payroll press the F3 key, then click KiwiSaver.
Click the method (in blue text) under Employer Contribution Tax.
The Employer Contribution Tax window opens. Click either ESCT Regular or Plus ESCT.