1. What is the Employer Salary Cost?

The total employer salary cost includes the gross salary plus mandatory employer contributions like KiwiSaver and ACC levies. In New Zealand, employers must contribute at least 3% to KiwiSaver for eligible employees, plus pay ACC levies which vary by industry but average around 1.53%.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• \( \text{Gross Salary} \) — Base annual salary before deductions
• \( \text{Employer KiwiSaver} \) — Minimum 3% of gross salary (can be higher)
• \( \text{ACC Levy} \) — Typically 1.53% of gross salary (varies by industry)

Explanation: The total cost to employer is significantly higher than just the gross salary due to these mandatory contributions.

3. Importance of Employer Cost Calculation

Details: Understanding the true cost of employment is crucial for business budgeting, financial planning, and determining appropriate salary offers.

4. Using the Calculator

Tips: Enter gross annual salary in NZD, KiwiSaver contribution percentage (minimum 3%), and ACC levy rate (default 1.53%). All values must be valid positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Is KiwiSaver contribution mandatory for employers?
A: Yes, employers must contribute at least 3% of gross salary for eligible employees who are contributing members.

Q2: Can employers contribute more than 3% to KiwiSaver?
A: Yes, employers can choose to contribute more than the minimum 3%, up to 10% or more if desired.

Q3: Does the ACC levy rate vary?
A: Yes, ACC levies vary by industry risk classification from about 0.10% to 8.90%, with 1.53% being an average rate.

Q4: Are there other employer costs not included here?
A: Yes, this calculator doesn't include costs like FBT, payroll taxes, or other benefits which may apply.

Q5: Is this calculator specific to 2025/26 tax year?
A: Yes, it uses contribution rates expected to be in effect for the 2025/26 financial year in New Zealand.