When you start a new job in New Zealand, you are automatically enrolled in KiwiSaver. You have a short window to opt out if you don’t want to join. Miss that window and you’re in — but even then, you have other options to reduce contributions.
Here’s everything you need to know about KiwiSaver opt-out.
The Opt-Out Window
You can opt out of KiwiSaver within a strict time window after being automatically enrolled:
- Earliest: 2 weeks after your start date
- Latest: 8 weeks after your start date
Outside this window, you cannot opt out. If you miss the 8-week deadline, you remain a KiwiSaver member.
Note: You can apply to IRD for a late opt-out if exceptional circumstances prevented you from opting out in time (e.g. serious illness, being overseas). IRD considers these on a case-by-case basis.
How to Opt Out
There are two ways to opt out within the window:
Option 1: Through IRD (recommended)
- Log in to myIR at ird.govt.nz
- Go to KiwiSaver → Opt out
- Complete the online opt-out form
IRD processes the opt-out and notifies your employer to stop deductions.
Option 2: KS10 form
Download the KS10 opt-out form from IRD’s website, complete it, and send it to IRD.
Your employer cannot process the opt-out — it must go through IRD directly.
What Happens to Contributions Already Made?
If you opt out within the 8-week window, any employee contributions deducted from your pay are refunded to you by IRD. Employer contributions made during that period are returned to your employer.
Refunds typically take 1–2 weeks after opt-out is confirmed.
Who Is Eligible to Opt Out?
New employees automatically enrolled in KiwiSaver can opt out. The opt-out right applies to:
- New employees starting employment
- Employees who are re-enrolled after a savings suspension ends
Who cannot opt out:
- Employees past the 8-week window who missed the opt-out period
- People who voluntarily enrolled in KiwiSaver (rather than being auto-enrolled) — you can join and then stop contributions via savings suspension, but there’s no opt-out refund mechanism
- People under 18 enrolled by a parent — the same opt-out rules apply but the parent/guardian manages the process
Should You Opt Out?
For most people, opting out is a financial mistake. Here’s why:
You lose the employer match immediately
Your employer contributes at least 3% of your gross salary to KiwiSaver when you contribute. Opt out, and that employer contribution stops. On a $60,000 salary, you’re giving up $1,800/year of free compensation.
You lose the member tax credit
Contribute at least $1,042.86/year and IRD credits your account with $521.43. Opt out and you receive nothing.
You lose the power of compounding over decades
Starting KiwiSaver at 25 vs 35 vs 45 makes an enormous difference to your retirement balance. The earlier you start, the longer compounding works in your favour.
When opting out might make sense
There are limited situations where opting out is defensible:
- Very high-interest debt — if you’re carrying debt at 20%+ (credit cards, buy-now-pay-later), the guaranteed return of debt repayment may outweigh KiwiSaver’s benefits temporarily. But even then, consider reducing to 3% rather than opting out entirely.
- Self-employed transition — if you’re about to become self-employed, your auto-enrolment as a new employee will anyway be your last automatic contribution event. You can opt out and then decide whether to contribute voluntarily as self-employed.
- Very short-term employment — if you’re starting a contract role for 2–3 months with no intention of long-term NZ employment.
Even in these cases, opting out means losing the employer match for the period you’re employed — which is real money.
Alternatives to Opting Out
If you want to reduce the impact of KiwiSaver on your take-home pay without giving up entirely:
Reduce your contribution rate to 3%
The minimum employee contribution is 3% — not opting out. At 3%, you keep the full employer match and MTC while minimising the deduction from your pay.
Apply for a savings suspension
After 12 months of membership, you can suspend contributions for up to 1 year. This stops deductions from your pay while keeping your membership (and existing balance) intact.
See KiwiSaver savings suspension.
Re-Enrolling After Opt-Out
If you opt out and later want to join KiwiSaver, you can voluntarily enrol at any time through your employer or directly with a KiwiSaver provider. There’s no penalty for having previously opted out.
Once you voluntarily re-enrol, the standard KiwiSaver rules apply — employer match, MTC, and fund choice. However, you cannot “claim back” the employer match and MTC you missed during your opt-out period.
Frequently Asked Questions
Can I opt out of KiwiSaver after the 8-week window? No — not through the standard process. After 8 weeks, you’re a permanent KiwiSaver member. You can apply to IRD for a late opt-out only in exceptional circumstances. Your practical option is to apply for a savings suspension (available after 12 months) or reduce your contribution rate to 3%.
Does opting out of KiwiSaver affect my take-home pay? Yes — if you opt out, no KiwiSaver deduction is made from your pay, so your take-home pay is higher. However, you also lose the employer match and MTC.
My employer said I have to be in KiwiSaver — is that true? Your employer must auto-enrol eligible new employees and make contributions while you contribute. But they cannot prevent you from opting out within the valid window. If an employer tells you that you cannot opt out, contact IRD.
Can I opt out of just the employee contribution but keep the employer contribution? No. Employer contributions are only made when you contribute. If you opt out or suspend contributions, employer contributions stop too.
I was auto-enrolled by mistake — I’m already in KiwiSaver from a previous job. What happens? If you start a new job, you are re-enrolled even if you’re already a KiwiSaver member. You don’t opt out of KiwiSaver as a scheme — you opt out of the new employer’s automatic enrolment. Your existing KiwiSaver account and balance are unaffected.