KiwiSaver Opt Out and Need To Knows

KiwiSaver contributions are managed through payroll. Let's investigate employee saving suspensions and opting-out conditions.

Updated: May 2024

As an employer, you are responsible for enrolling new eligible employees automatically into KiwiSaver. This article looks at managing KiwiSaver contributions through Thankyou Payroll and at how to stop contributions when an employee has opted out or has a saving suspension.

In this article:

Opting out conditions. What I need to know.
My employee has stopped contributing to KiwiSaver. What now?
Further Resources and Links

Opting Out Conditions. What I Need To Know.

Whether your employee can opt out of KiwiSaver has to do with the way they were enrolled. Here are useful things to remember:

My new employee was automatically enrolled when they started working for me.

Your employee can opt out of KiwiSaver between weeks 2 - 8 of starting work (that is, on or after day 14 till on day 56). They must hand in KS10 - KiwiSaver opt-out request included in the KiwiSaver inrolment pack.
A late opt-out request can be made up to 3 months after their first contribution. Conditions apply to this request.
After this initial opt-out period, an enrolled employee cannot opt out of KiwiSaver - ever. They need to apply for a savings suspension, but their KiwiSaver account remains open. This application can be done through their MyIR. If this is granted, IRD will notify you in a letter. You must wait to act until receiving this letter from IRD.

My employee did not qualify to be automatically enrolled, but chose to join KiwiSaver on their own. Can they opt out?

If your employee chose to join KiwiSaver, either by enrolling through an employer or with a KiwiSaver provider, they are not able to opt out. Their KiwiSaver account will remain open.
They can request a saving suspension from the IRD. Employees on a saving suspension will have a valid saving suspension notice that informs the employer of the period of the suspension. After the suspension ends, the KiwiSaver deductions will restart but the employee can request a further savings suspension. IRD will notify you.

If my employee is already enrolled in KiwiSaver, can they opt out now?

No, once the employee has a KiwiSaver account they cannot opt out. This account remains open even if they do not currently earn an income. They can request a saving suspension through their MyIR.
A person will only have one KiwiSaver account.

Managing KiwiSaver Contributions in Thankyou Payroll

Here is a useful walkthrough of each KiwiSaver field in the Employee Profile. Have a look at what goes where in our system.

Stopping deductions and contributions.

KiwiSaver contributions made into KiwiSaver accounts are generally not refundable. This goes for employee and employer contributions. It is important for your employee to note that contributions that fall between saving suspensions will not be refunded.

*The only exception is for employee opt-out conditions.

Let's take a look at managing KiwiSaver deductions in the Employee's Profile:

Scenario 1: Employee opted out within the opt-out period - no KiwiSaver deductions made.

If your employee has opted out within the opt out period and you have not started deductions yet, simply leave the KiwiSaver fields (fields 1 and 2 above) blank. Do not enter a Zero.

You can leave the dropdown menu as default for fields 3 and 4.

Scenario 2: Employee requested a saving suspension from IRD - stopping KiwiSaver deductions for a time.

If the employee dealt directly with IRD (as in requesting a saving suspension or a late opt out in their MyIR), IRD will notify you to stop or adjust deductions.

Remove the contribution rates from fields 1 and 2 by backspacing them out. Do not enter ZERO. The fields must be blank.

You can leave the dropdown menu as default for fields 3 and 4.

Save the tab.

When the suspension period is over, enter the KiwiSaver contribution rates in the fields and save the tab. The KiwiSaver deductions will be included in the next pay.

Scenario 3: Your employee has opted out, but you have already made deductions for KiwiSaver.

Please contact our Customer Support Team. We will advise you whether we can refund you and your employee directly, or if the refunds will come from IRD.

My employee is going on extended leave without pay and I want to continue making employer KiwiSaver contributions. How do I do that in Thankyou Payroll?

Usually, an employer must contribute to the employee's KiwiSaver only if the employee contributes. It is the employer's choice to keep contributing if the employee stops. Note that if the employer chooses to continue their employer's contribution to KiwiSaver, they will pay ESCT on their contributions.
As you are not processing a pay for this employee in Thankyou Payroll, you have to make this contribution directly with the employee's KiwiSaver Provider, outside of our system.