Total Remuneration Salary

  • Total Remuneration is when an agreed salary package - say, $50,000 a year - includes the value of the KiwiSaver Employer contribution and any associated taxes.
  • Without a Total Remuneration clause, it is possible to have two employees being paid different amounts for doing an identical job.
  • If both employees earn $50,000, but one joins KiwiSaver and gets a KiwiSaver Employer Contribution on top, the employee in KiwiSaver earns and costs more than the employee not in KiwiSaver.
  • The existence of a Total Remuneration clause in the employment contract eliminates this inequality.

To enable Total Remuneration go to Setup from the top window menu bar, select Extremely Fine Tuning then Enable Total Remuneration as shown below.


From the standard salary entry dialog enter the total agreed salary including KiwiSaver Employer Contributions.

Place a tick next to Total Remuneration as shown below.

  • If Total Remuneration is ticked, the actual salary paid is reduced by the amount of the employer KiwiSaver contribution.
  • Note that when KiwiSaver employer contribution rates change the salary reduces automatically.
  • If the annual salary shows on the employee payslip, it is the gross salary that is shown, inclusive of KiwiSaver employer contributions. See Payslip Data Options for more info.
  • Note this feature can only be enabled for salaried employees.

Total remuneration approaches to Kiwisaver

A "total remuneration" arrangement 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.

During 2007 and 2008 the law relating to total remuneration arrangements was subject to complete legislative confusion. Total remuneration approaches were permitted, then banned, then permitted again.

In December 2008, the new Government made several changes to KiwiSaver legislation, and included in this was the unexpected change to total remuneration packages and employer contributions.

The Government repealed the amendments made against total remuneration in the Employment Relations Act 2000. Those amendments had prevented employers treating otherwise comparable KiwiSaver employees less favourably than non-KiwiSaver employees.

The result is that parties can now negotiate in good faith, to include compulsory employer contributions to KiwiSaver in a total remuneration arrangement for all employment agreements made after 13 December 2007.

Under the current law there are two approaches an employer can take:

A default approach: This is the standard approach taken by employers. If an employee joins a KiwiSaver scheme, the employer contributions are paid in addition to the employee's gross salary or wages.

A total remuneration approach: this 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.

The change in legislation has created a risk for employers using total remuneration packages, as the validity of existing total remuneration arrangements will vary, depending on when they were agreed to.

It is important for employers to check whether any total remuneration arrangements comply with the law, and, if not, they may want to "re-agree" arrangements made before 13 December 2007 to ensure they are legal.

For all total remuneration arrangements entered into after 15 December 2008, it is now a requirement for all employment agreements to include a total remuneration clause that outlines the arrangement, and accounts for the amount of the employer's compulsory contributions. Rainey Collins has a suitable standard clause that complies with the legislation.

Despite the legislative changes, total remuneration provides several benefits to employers. Wage budgets are certain and all employees are treated equally. If you are considering entering into a total remuneration arrangement and would like to discuss your obligations under the new legislation, please call us on freephone 0800 733 424 for a relaxed and confidential initial chat.

We thank Alan Knowsley from Rainey Collins Lawyers for this article.

More KiwiSaver Information

KiwiSaver Overview
An overview of everything an employer needs to know about KiwiSaver more..
KiwiSaver Employee Setup
KiwiSaver employee setup in Ace Payroll more..
KiwiSaver Pay Calculation
KiwiSaver deductions are fully automated each pay more..
KiwiSaver Automatic Enrolment
Every person that starts a new job is automatically enrolled in the scheme more..
KiwiSaver Exempt Employees
Under 18, over 65, and casual employees are exempted from automatic enrolment more..
KiwiSaver Contribution Rates
All members must contribute 3% of gross wages and may contribute 4% or 8% more..
KiwiSaver Opting Out
An employee has 8 weeks from the start of employment to opt out of the scheme more..
KiwiSaver Opting In
Anyone can opt in to the scheme at any time. Once opted in, an employee can never opt out more..
KiwiSaver Contributions Holiday
All applications for a contributions holiday must be made to the IRD using a KS6 Contributions Holiday request form more..
KiwiSaver Employer Contributions
All employers must contribute 3% for each employee enrolled in KiwiSaver more..
ESCT - What Is It?
A description of Employers Superannuation Contributions Tax and how it is paid more..
ESCT Calculation
ESCT is payable on all KiwiSaver employer contributions more..
ESCT Tax Rates
Employer KiwiSaver contributions are taxed at the top employee marginal tax rate, based on estimated annual earnings more..
ESCT on IRD Monthly Returns
I am doing my monthly return for IRD and the ESCT figure does not show on my IR348 return. What is wrong? more..
KiwiSaver Contributions Report
The KiwiSaver Contributions Report keeps track of contributions, reversals and refunds more..
KiwiSaver Reversals and Refunds
Use the Reversals and Refunds Wizard to reverse and optionally refund KiwiSaver deductions to employees that were automatically enrolled, and then opted out of KiwiSaver more..
KiwiSaver Company Setup
For most employers no company setup is required in Ace Payroll more..
Total Remuneration
Use when an agreed salary package includes KiwiSaver employer contributions more..
KiwiSaver Scheme Providers
The linking of employees to scheme providers does not happen at the payroll end of the process more..
Exempt Schemes
How to disable the deduction of compulsory employer KiwiSaver contributions for employees in exempt KiwiSaver schemes more..
Alphabetical Index
The Ace Payroll alphabetical index provides links to all documentation more..
Ace Payroll FAQ Contents
All the most common Ace Payroll questions grouped by categories in a short table of key words more..
Ace Payroll Frequently Asked Questions
All the most common questions we are asked at Ace Payroll listed in a question format and grouped by category more..

KiwiSaver Forms

image KS1 Employee Details
An employer uses this form to notify Inland Revenue about
  • a new employee being enrolled automatically.
  • an existing employee opting in.
image KS2 KiwiSaver Deductions
An employee uses this form to provide details to an employer if they are
  • starting new employment.
  • an existing employee opting in.
  • a member contribution rate change.
image KS3 Employee Information
An introductory guide for an employee about the KiwiSaver scheme.
KS4 KiwiSaver Employer Guide
A 36 page overview of your KiwiSaver responsibilities as an employer.
KS6 Contributions Holiday
An employee uses this form to request a contributions holiday.
image KS10 New Employee Opt Out
An employee uses this form if they have been automatically enrolled and don't want to be a member of KiwiSaver.