KiwiSaver

What is ESCT?

Last verified · Methodology

What it means

Employer contributions to KiwiSaver and other superannuation schemes are taxed before they are paid in. The employer deducts ESCT and pays it to Inland Revenue with PAYE, so your account receives the net amount. The rate follows bands similar to income tax, applied to your salary or wages plus gross employer contributions for the previous tax year: 10.5% up to $18,720, 17.5% up to $64,200, 30% up to $93,720, 33% up to $216,000, and 39% above that.

Each ESCT threshold is 1.2 times the matching income tax threshold: $18,720 is 1.2 x $15,600. A new employee's rate is based on an estimate of the current year's pay.

How it is worked out

ESCT = gross employer contribution x ESCT rate Rate band = previous year's salary or wages + gross employer contributions

Example

On a $70,000 salary, a 3.5% employer contribution is $2,450 gross. Salary plus contribution is $72,450, which falls in the 30% band, so $735 goes in ESCT and $1,715 reaches your KiwiSaver.

Run the numbers

Open the KiwiSaver calculator

Related terms

KiwiSaverKiwiSaver is New Zealand's voluntary work-based retirement savings scheme. From 1 April 2026 the default employee and employer rates are 3.5% each.KiwiSaver government contributionThe KiwiSaver government contribution pays 25 cents per dollar you contribute each July to June year, up to $260.72.PAYE (Pay As You Earn)PAYE is the income tax and ACC earners' levy your employer takes out of each pay and sends to Inland Revenue, based on the tax code you give them.
ESCT: common questions

ESCT is the tax taken off your employer's KiwiSaver contributions before they reach your account. The rate depends on your pay plus those contributions.

Because ESCT is deducted first. On a 17.5% ESCT rate, 3.5% gross becomes about 2.9% of salary in your account.

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