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KiwiSaver for employers
Poua he oranga mō ngā kaiwhakawhiwhi mahi

Opt-out requests

An employee who is automatically enrolled has eight weeks (on or after day 14 and on or before day 56) from starting their new job to decide if they want to stay with KiwiSaver, or to opt out.

A new employee opt-out request only applies to the employment that triggered the automatic enrolment. It does not apply to any other employment or new employment that the employee may later begin. Employees must opt out separately for each new employment.

Note

Even if an employee intends to opt out you still need to complete a KiwiSaver employee details (KS1) form and send it to us.

 

Note

Employees under the age of 18 who have been incorrectly enrolled may also use the opt out request (KS10) but they must send this directly to Inland Revenue.

 

An employee can opt out between days 14 and 56 by ... What happens next
giving you an Opt out request (KS10) form.

You must:

  • stop making:
    • KiwiSaver deductions,
    • compulsory employer contributions and ESCT from their next pay
  • make sure they are within the 2-8 week opt-out period
  • send us the KS10 (or a copy of it) no later than the next EMS schedule. You can file this online if you are registered for our ir-File service
  • either:
    • refund to the employee any deductions you've made but not yet sent us, or
    • send them with your PAYE payments and we'll refund the employee directly.
completing the online opt-out request.

We'll:

  • advise you that the employee has opted out, and
  • ask you to stop:
    • deductions
    • compulsory employer contributions and ESCT.

You must either:

  • refund to the employee any deductions you've made but not yet sent us, or
  • send them with your PAYE payments and we'll refund the employee directly.
sending an Opt out request (KS10) form to us.

 

Note
  • The KS10 takes effect from the date it's received by you or by us.
  • We'll refund you the employer cash contributions you've made for the employee.
  • We'll refund you any employer superannuation contribution tax (ESCT) calculated on employer cash contributions on request. Find out more about ESCT.

Late opt-outs

After the eight week opt-out period, the employee must send the Opt out request (KS10) form directly to us. Late opt-outs can be accepted at our discretion if events outside the control of the employee make it reasonable to do so, if one or more of the following applies:

  • the employer did not supply the employee with an information pack within seven days of the employee starting new employment with that employer
     
  • we did not send an investment statement for the default KiwiSaver scheme that the employee was allocated to
     
  • the employer did not supply an investment statement for their chosen KiwiSaver scheme, if the employer had a preferred scheme provider in place
     
  • events outside of the employee's control meant that the opt-out notice could not be given within the time limit for opting out and, in the opinion of Inland Revenue, it is reasonable that a late opt-out notice be accepted.

We may accept a late opt-out notice up to three months after the date when we receive an employee's first contribution. If we receive a late opt-out notice and don't accept it, we will treat the notice as if it were an application for a contributions holiday, if the person is eligible to apply for one.

This will normally apply to existing members starting new employment who think they can opt out. A contributions holiday in lieu of a failed opt out should be granted for five years. If a contributions holiday is granted in lieu of an opt out, we will not notify the employer named on the opt-out request.

Note

Employees under the age of 18 who have been incorrectly enrolled may also use the opt out request (KS10) but they must send this directly to Inland Revenue.

Refunds when an employee opts out

If an employee opts out and we are holding contributions, we will refund them.

If an employee opts out and you have not paid their deductions to Inland Revenue, you may refund the deductions directly to them.

If you don't refund the deductions or pay them to Inland Revenue, then we may refund the contributions anyway, as deductions are guaranteed by the Crown. However you may be liable for penalties.

Refunds can only be offset against outstanding tax if the person requests this.

Refunds must be paid electronically unless it is impractical to do so, or if doing so would cause hardship.

We'll refund to you the compulsory employer contributions and tax on the employer cash contribution you've made.

Any tax, calculated on employer contributions, paid to us for your employee that has opted out will be refunded to you on request. You can do this by either:

  • completing an IR344 or
  • calling us on 0800 377 772
Example 1

On 10 April 2012, Tracey starts work with you, and the automatic enrolment rules apply. Tracey wants to opt out that day. However, the earliest she can opt out is in two weeks' time on 23 April 2012 .

You must make KiwiSaver deductions, compulsory employer contributions and calculate ESCT until 23 April 2012 even if Tracey gives you an opt-out request before this date.

From 23 April 2012, you can refund the member deductions directly to Tracey or pay them to us with your next employer monthly schedule, and we will refund them to Tracey.

We will refund to you any compulsory employer contributions. Any ESCT you have deducted will be refunded to you on request.

 

Example 2

Bruce works part-time and gets a second part-time job with you. He was automatically enrolled in KiwiSaver for his first job, but is not a member because he opted out. He is automatically enrolled again for the second job.

He must opt out again for the second job if he doesn't want to be a KiwiSaver member. From day 14 of his employment, Bruce can opt out of KiwiSaver for his job with you.

You can refund the member deductions directly to Bruce or pay them to us with your next employer monthly schedule and we will refund them to Bruce.

 

Example 3

Mere starts work with you on 5 December 2008, and the automatic enrolment rules apply.

On 3 February 2009, Mere gives you an opt-out form. Mere's opt-out period begins on 18 December 2008 and ends on 29 January 2009. Because her opt-out form is late, she must give her reasons for opting out late, and you must send the form directly to us.

You must continue to deduct member contributions and make compulsory employer contributions unless you receive a letter from us advising otherwise.

We will refund Mere her contributions and refund to you your compulsory employer contributions on accepting the opt-out.