Answer
CEC stands for Compulsory Employer Contribution. The CEC obligation flag on an employee record tells Lightning Payroll whether the employer must contribute KiwiSaver on top of the employee's deduction.
Available CEC settings
- Required: the employer must contribute at the minimum rate (currently 3% of gross earnings).
- Not required: the employer is not obliged to contribute - for example because the employee is under 18 or over the qualifying age, or the contribution is met through a complying fund.
- Voluntarily ceased: the employer has voluntarily stopped contributing for an employee who is on a savings suspension.
How CEC affects the pay
- Required: the employer KiwiSaver line is added at the configured rate; ESCT is applied.
- Not required: no employer line is added, even if the employee is contributing.
- Voluntarily ceased: same as not required, but the reason is reported separately on the Employee Details submission.
Things to check
- If the employer line is missing on a pay and you expected it, check the CEC obligation on the employee.
- Total remuneration arrangements (TRA) can also affect whether CEC is paid - the rate is documented in the employee's employment agreement.
- CEC settings flow into payday filing, so an incorrect setting can cause Inland Revenue to chase up missing contributions.
If you change the CEC obligation, the change applies from the next pay onwards - previous pays are not retrospectively adjusted.
