If the employee decides to opt-out of KiwiSaver after day 56, they must send their KS10 form to IR directly or apply online. IRD will let you know if they've approved the late opt out reason and when to stop deductions and contributions.
To resolve the issue, you would need to contact IR to sort out the opt date and correct the details in Employee Masterfile. Once this has been done, submit the PayDay Filing batch again.
📌Note: the error message will still be displayed (because the payroll batch has not been altered). Ignore the message and click the Submit button to submit the batch.
An employee only has eight weeks to decide if they want to make KiwiSaver contributions from the date they start. They can only opt out after two weeks has passed (on or after 14, but on or before day 56).
As a workaround while the employee's KiwiSaver Tax code is being sorted out, enter the code as T = Exempt other in the employees Masterfile. By changing the record, the system will allow the batch to be submitted.
Once the record is sorted between employer, employee & IRD, they can amend the details in the employee Masterfile to reflect correct information.