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KiwiSaver: Create Pay Run validates KiwiSaver minimum rate for employees who are excluded from pay creation

For pay runs created on or after 1 April 2026 (with pay dates on or after 1 April 2026), the Create Pay Run logic validates KiwiSaver minimum rates for all employees, including those who are excluded from pay creation.

Country: New Zealand

Date: 16 Mar 2026

Status: Backlog

Reference: N/A

 

Issue

For pay runs created on or after 1 April 2026 (with pay dates on or after 1 April 2026), the Create Pay Run logic validates KiwiSaver minimum rates for all employees, including those who are excluded from pay creation.

As a result, KiwiSaver “lower than minimum” validation errors are raised for employees who:

  1. belong to a pay group with an expiry date earlier than the pay run period (so they should be excluded from pay creation), or

  2. have the setting “Exclude employee when creating a new Pay Run” enabled.

These employees were expected to be excluded when validating rates for the new pay run, but they are currently included in the validation logic.



Current Behaviour

Preconditions:

  • KiwiSaver minimum employer/employee rates for 26/27 are configured for all other employees in the payrun.

  • Pay run pay dates are on or after 1 April 2026 (so new min‑rate validation applies).

Scenario A – Pay group expired

  • Employee A:

    • Assigned to Pay Group X.

    • Pay Group X has an expiry date earlier than the new pay run period (so Employee A is normally excluded when creating a new pay run).

    • Employee A has a KiwiSaver rate below the new legislated minimum (without rate reduction).

  • User creates a new pay run for a period after Pay Group X’s expiry date and with pay date on or after 1 April 2026.

Results Observed:

  • During Create Pay Run, the system:

    • evaluates Employee A’s KiwiSaver rates,

    • applies the lower‑than‑minimum validation,

    • and raises an error for Employee A

    • even though Employee A should be excluded from this pay run (due to pay group expiry).

Scenario B – “Exclude employee when creating a new Pay Run”

  • Employee B:

    • Is configured with “Exclude employee when creating a new Pay Run” checked.

    • Has a KiwiSaver rate below the new legislated minimum (without rate reduction).

  • User creates a new pay run for a period on or after 1 April 2026.

Results Observed:

  • During Create Pay Run, the system:

    • still validates Employee B’s KiwiSaver rate,

    • raises a KiwiSaver minimum rate error for Employee B,

    • even though Employee B should not be included in the pay run creation process.

 

Workaround

The user must update all employee/employer KiwiSaver rates to the new minimum default to create a pay run for that pay group.

If an employee’s pay group expires for new pay from April 1 and they are excluded from the next pay, mark them as inactive.