As an SMO who qualifies for employer-subsidised super of 6%, you may be in a great position to maximise the financial benefits of KiwiSaver to help your savings grow even faster.

With KiwiSaver, employer contributions of up to 2% of your before-tax salary are totally tax free as long as you’re making at least matching contributions to your KiwiSaver account. So, if your DHB or current super scheme allows, you may be able to put some of your employer-subsidised super into KiwiSaver to take advantage of this tax-free benefit.

Here’s how it works
If you match your employer’s 6% contribution with your own 6% contribution, you could structure your 12% contribution like this:

• 4% invested in KiwiSaver = 2% from DHB (tax free) + 2% from you
• 8% invested in standard super scheme = 4% from DHB (taxed at 33%*) + 4% from you.

On a $100,000 salary you get:

• An extra $4,680 in contributions each year – if you don’t already have a super fund going, or
• An extra $660 in contributions each year – if you already have a super fund going.

It’s like getting a pay rise! And these figures don’t even include the other financial benefits KiwiSaver offers, like the $1,000 kick-start payment and the government’s matching payments of up to $1,042 a year.

*Employer superannuation contribution tax rate