Employees will only be refunded for the employee's portion of the contribution, and the employer will be refunded the employer's portion of the contribution.

The first decision you have to make is:

1. Are you going to let the IRD refund the KiwiSaver deductions?
   
   OR
2. Are you going to refund the KiwiSaver deductions to the employee?

If you choose No. 1

then there is no action required in Payroll, although employees will have to wait until after the current month's Employer Monthly Schedule PAYE is filed processed before receiving their refund from the IRD.When you file the EMS, the  

The IRD is advised that the employee has opted out by a KiwiSaver Opt-out form (KS10). For example, an employee starts work on the 2^nd 2nd April and KiwiSaver deductions are made from the employee's wages. They opt out on the 7th of May. You file your EMS for May on the 20^th of June. The The employer will file the KS10 form and the IRD will then refund the employee's KiwiSaver deductions to the employee and any employer contributions to your KiwiSaver account.

If you choose No. 2

You can refund the May KiwiSaver deductions in the employee's next pay in May. The April deductions will be refunded by the IRD after they process the PAYE month. If any KiwiSaver deductions for the 'current' month are being refunded, these need to be re-processed, either by restoring a backup and re-processing the pay without KiwiSaver, or reversing the payrun for the affected employee and redoing the pay.