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New Zealand’s social security program is considered developed, offering universal healthcare, a pension program, unemployment, and more. Both employees and employers much contribute to social security in New Zealand, with each contribution a percentage of the employee’s gross salary at each pay period. Read below for details about New Zealand’s social security program.
New Zealand’s social security system is supported by a system of occupational welfare that covers employment related issues, such as; workplace safety, unemployment due to illness or injury, and retirement.
Occupational welfare schemes and policies are primarily funded through employer/employee contributions to the KiwiSaver and ACC levy.
Employees make contributions to social security through certain payroll taxes. The mandatory contributions include the KiwiSaver*, a work-based retirement savings scheme and the ACC levy.
*Strictly speaking the KiwiSaver is a voluntary scheme, as employees who have been automatically enrolled can choose to opt out of the scheme. However if an employee has been opted into the KiwiSaver scheme by their employer, they cannot opt out later.
The other mandatory payroll tax that employees contribute to is the Earners’ levy, part of the ACC.
Taken together, the minimum employee contribution to social security is ≈4.47%.
Employers make a number of mandatory contributions to New Zealand’s system of social security.
Employers match the contribution of their employees to the KiwiSaver scheme. The minimum contribution is 3% but, at the discretion of the employee, can rise to 10%.
All businesses in New Zealand contribute to the ACC, a fund that covers the cost of work-related injuries. Employers make contributions through two levies:
The mandatory contributions that employers in New Zealand pay are, on average, lower than those for employers in Australia.
In New Zealand the minimum employer contribution totals ≈4.4%; whereas, Australian employers contribute a minimum of ≈10.5% of an employee’s ‘ordinary time earnings’ towards the Super guarantee scheme.
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The minimum employer contribution to social security in New Zealand equates to ≈4.4% of liable income.
The safety of the workplace, periods of unemployment due to illness or injury, and retirement.
Based on the qualification age for the superannuation pension scheme, the usual age of retirement in New Zealand is 65.
