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KiwiSaver inclusive vs. exclusive – clearing up the confusion

​It is common for employers to vary between offering either a KiwiSaver exclusive package or KiwiSaver inclusive package. Often creating an area of confusion in the recruitment process, the team of expert recruiters at BrightSpark are here to outline what this actually means, how to navigate multiple offers with varied exclusive or inclusive packages and give clarity around KiwiSaver as a component to your package.

Firstly we thought we would take a moment to define what KiwiSaver actually is: a voluntary, work-based retirement savings scheme. KiwiSaver is for all New Zealand citizens and permanent residents living or normally living in New Zealand. Members can still get New Zealand Superannuation when they reach 65.

You are automatically enrolled into KiwiSaver if you are:

• Eligible to be enrolled

• Starting work with a new employer

• Aged between 18 and 65.

You can opt out from contributing to KiwiSaver if you choose.

As an employee if you are enrolled you'll contribute either 3%, 4%, 6%, 8% or 10% of your before tax pay. If you do not choose a contribution rate, your employer will deduct the default rate of 3%. You'll contribute through wage deductions.

Employers will make KiwiSaver deductions from their employees' pay. They also make a compulsory minimum contribution of 3% towards their employees' KiwiSaver savings’ - unless they are already contributing to another superannuation fund for their employees. An employer will also stop payments if their employee has a savings suspension.

Where the confusion starts to come into play is when a candidate receives a job offer and it is either expressed as being ‘KiwiSaver exclusive’ (on top of the salary) or ‘KiwiSaver inclusive’ (part of the salary). Employers who offer an inclusive package are ensuring pay parity to those who are not part of Kiwi Saver, ie: have opted out or on a visa.

Let’s look at the numbers further:

KiwiSaver Exclusive:

$100,000 KiwiSaver exclusive job offer

Base salary of $100,000 + $3,000 employer contribution to KiwiSaver

If you have opted out of KiwiSaver your before tax renumeration will be $100,000

KiwiSaver Inclusive:

$100,000 KiwiSaver inclusive job offer

Base salary of $97,000 + $3,000 employer contribution to KiwiSaver

If you have opted out of KiwiSaver your before tax renumeration will be $100,000

The BrightSpark recruitment team have seen further confusion when a candidate has applied for a new job and is moving from an exclusive package to an inclusive job offer and accessing the actual difference in renumeration. For example;

Current role exclusive package:

$65,000 exclusive

$65,000 + $1,950 employer contribution to KiwiSaver

Job offer inclusive package:

$70,000 inclusive

$67,900 + $2,100 employer contribution to KiwiSaver

Actual increase in total renumeration package is $2,900

As a candidate it is crucial you understand these numbers and access your total renumeration against the exclusive / inclusive calculations to ensure there is no disappointment when it comes to your first pay check in a new role.

Our advice to employers is to make your exclusive / inclusive offer is crystal clear right from the initial interview or as part as the upfront salary negotiation phase, this is the best way to mitigate any potential for disappointment at the time of offer. We regularly advise our clients to consider offering a higher base salary if their package is KiwiSaver inclusive, as it results in a much more compelling overall renumeration package in such a talent short market.

Through clear communication from employers and an understanding from candidates at the outset both parties will be better equipped to negotiate the package effectively. The benefit of working with a recruiter through this process is we do this day in and day out, and can assist you to access your offer confidently.