Hibiscus Coast employers are about to get a quiet KiwiSaver admin job, right in the middle of the year’s usual payroll grind.

From Sunday, February 1, KiwiSaver members can apply for a temporary contribution rate reduction.

It is designed to take the edge off the default rate increase coming in April.

The default KiwiSaver contribution rate is set to rise from 3% to 3.5% on Wednesday, April 1.

If an employee is granted a temporary rate reduction, it will not apply until their first pay on or after that date.

You will not need to guess.

You will be told what to do, either by your employee or Inland Revenue.

That notice will come as one of the following:

• A certificate from your employee showing the period the rate reduction applies for
• A letter from Inland Revenue advising which employee has been granted a temporary rate reduction and the approved period

Employers can choose to match an employee’s temporary rate reduction.

When the employee moves back to a higher contribution rate, employer contributions will need to move to the new default 3.5% rate, or to a higher rate the employer chooses.

Employees can apply to lower their rate to 3% for between three months and a year.

If they have more than one employer, they can choose which employer to notify.

A temporary rate reduction is not available for anyone who has a savings suspension.

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