As a self-employed individual, you are not eligible for Employer Contributions to your KiwiSaver scheme, however you may be eligible to get a contibution from the Government up to a maximum of $521 a year.
Now called the ‘Government Contribution’, formerly known as the ‘Member Tax Credit’, it works like this: For every $1 you contribute towards your KiwiSaver between 1 July and 30 June each year, the government will match you 50% up to a maximum contribution of $521.
It doesn’t matter who your KiwiSaver scheme is with, but you do need to have one in order to receive the Government Contribution.
To be eligible for the full Contribution, you must:
- be over 18 and under 65 years
- currently reside in New Zealand
- have been in some KiwiSaver scheme for the past 12 months
- have not yet withdrawn your KiwiSaver funds for retirement
- have paid at least $1,043 into your KiwiSaver account between July 1st and June 30th the following year.
Here are some helpful things to know about the ‘Government Contribution’:
- You’re still able to get a 50% return on your investment, even if you don’t reach the maximum. So if you contribute $500, you’ll still get $250 from the government. Either way you look at it, that’s basically free money. And millions of people aren’t aware of it!
- If you joined KiwiSaver or turned 18 at some point midway through the KiwiSaver year (July 1 to June 30), the government will make contributions based on the number of days in the period that you were 18 or were registered in a KiwiSaver scheme.
- These additional contributions from government are not taxed.
- For more information about KiwiSaver, the Government Contribution, and how you can get more out of your contributions, check out these articles from Simplicity and Sorted.