Q: Could you please advise if Inland Revenue would ever audit employers Kiwisaver contributions? And if they did and found that the employer was only applying 9% Kiwisaver to incentive payments and base salary and not to other taxable allowances, could the employer potentially face any fines or be required to backpay any shortfalls?
A: Yes they do, and as the law does not give the employer the ability to trade-off on what parts they include in gross or not, yes IRD could apply substantial fines.
Anything you do better than the act is by agreement it does not replace what the law states must be done. In Payroll all minimum requirements should be covered and clearly shown.