Q: We have a redundancy question regarding Kiwi Saver deductions we are hoping you can help us with.

We are currently moving one of our Distribution Centres from Auckland to Hamilton and redundancies are required.

We understand the redundancy payment does not get Kiwi Saver Contributions (and ACC) deducted from it.

The team members will also be paid out their outstanding leave balances (AL, LSL, ALT Days) on termination at the same time as the redundancy.
Does the leave on termination, paid out at the same time as the redundancy payment, also not get Kiwi Saver Contributions (and ACC) deducted from them?

A: Leave entitlement paid out is part of the taxable gross but taxed as an extra pay and is included in the 8%, KiwiSaver and Earner levy.  Whereas redundancy compensation is taxed as an extra pay but with no earner levy, not part of the 8%, KiwiSaver but student loan is deducted.