Retirement
Total Remuneration Package (NZ)
Definition
An employment contract structure in New Zealand where all cash salary, bonuses, and employer KiwiSaver contributions are bundled into a single package amount.
Key Takeaways
- Bundles base cash salary and employer KiwiSaver contributions into one package.
- Reduces the employee's base gross salary if they choose to save in KiwiSaver.
- Subject to active political debate in 2026 to ensure salary transparency.
Detailed Explanation
A Total Remuneration Package (often called a 'salary package' or 'all-inclusive package') is an employment contract design where the employer's KiwiSaver matching contribution is deducted directly from the employee's stated package, rather than being paid on top of their gross salary. If the employee participates in KiwiSaver, their base cash salary is reduced to offset the employer contribution, resulting in lower take-home pay. Ongoing political debates in 2026 aim to outlaw this practice so that KiwiSaver cannot be quietly absorbed into gross salary packages.
Real-World Example If James accepts a Total Remuneration Package of $100,000 and enrolls in KiwiSaver, the 3% employer match ($3,000) is deducted from his $100,000 package. This reduces his gross base salary to $97,087. James pays income tax on the $97,087 base, and his own 3% employee contribution ($2,912) is deducted from that, yielding a lower take-home pay than a non-member colleague on the same package.
See Also:KiwiSaver•Compulsory KiwiSaver