Employer Superannuation Contribution Tax (ESCT)

Employer contributions to superannuation schemes (KiwiSaver and other complying funds) are subject to employer superannuation contribution tax (ESCT).

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 will earn in the year ahead.

PayHero will attempt to calculate the ESCT rate for new employees, plus the first pay processed on or after April 1st will trigger a recalculation of the employee's ESCT rate for the following year.

For newly added employees the calculations are based the salary amount entered for the employee, or the expected earnings based on their work pattern. If no salary or work pattern then the rate will default to 10.5% and should be reviewed.

When an employee is in a pay crossing April 1, the ESCT rate is re-calculated based on the employee's earnings from the previous year.

The default ESCT rate can be changed manually on the Employment tab under Tax.

ESCT is calculated on each whole dollar of the employer contribution, and will have no effect for any employees who don't have KiwiSaver or complying fund contributions.