and contractors in New Zealand
Remote’s guide to employing in New Zealand
Facts & stats
New Zealand is an island nation in the South Pacific. Aotearoa is the traditional Maori name of New Zealand, predominantly made up of two main islands, the North Island and the South Island (as well as other smaller islands). The North Island is home to two-thirds of the 4.9 million residents.
New Zealand has a very strong economy, consistently ranking highly on quality of life measures, making it an attractive place to do business. The land of the long white cloud is home to skilled workers across a diverse range of industries. Agriculture is its largest sector, with dairy farming at the top. The manufacturing, service, construction, and tourism industries are also growing.
The country is known for its beautiful landscapes. Because New Zealand is geographically separated from others, the country offers flora and fauna visitors can’t find anywhere else. This unique natural beauty, combined with New Zealand’s high quality of life is becoming an attractive draw for digital nomads and remote workers looking for an English-speaking relocation option.
Grow your team in New Zealand with Remote
To employ in New Zealand, companies must own a local legal entity in the country or work with a global employment solution. Managing payroll, benefits, taxes, and compliance in New Zealand can get complicated, especially without established local relationships.
Remote has a fully-owned legal entity in New Zealand. This makes it easy for your company to employ workers in New Zealand quickly and in full compliance with all applicable labor laws. We take on the responsibility and legal risks of international employment so you can focus on growing your business.
New Zealand, like many other countries, treats self-employed individuals or contractors and full-time workers differently and there are risks associated with misclassification. If you misclassify an employee as a contractor, you may be held liable for unpaid taxes, minimum wage discrepancies, and unpaid holiday leave. You could also be subject to other serious penalties from New Zealand’s Inland Revenue Department or the Employment Relations Authority.
Employing in New Zealand
Remote makes it easy for companies of all sizes to employ workers in New Zealand using our employer of record solution. We can help employ your Kiwi team using our local New Zealand-based entity. We can handle your payroll, benefits, taxes, and local legal compliance. So you can focus on more important strategic work.
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The Adult Minimum Wage in New Zealand NZD $20.00 per hour. The Starting-Out Minimum Wage and Training Minimum Wage are NZD $16.00 per hour.
The Adult Minimum Wage applies to all employees aged 16 and up who are not starting-out employees or trainees. There is no minimum wage for employees under 16, but full employment rights still apply for all workers between the ages of 13 and 16.
The Starting-Out Minimum Wage applies to workers who are 16 or 17 and who have not yet achieved six months of continuous employment and to 18 and 19-year-olds who have received one or more social security benefits before completing six months of continuous employment. Six months of continuous employment is calculated by calendar date and not by hours worked.
The Training Minimum Wage applies to employees 20 or older with an employment agreement requiring 60 credits per year to become qualified. This often applies to apprentices. However, the Training Minimum Wage does not apply to employees being trained to do their job, such as at the beginning of employment.
- For customers of Remote, all employee payments will be made in equal monthly instalments on or before the last working day of each calendar month, payable in arrears.
We can help you get a new employee started in New Zealand fast. The minimum onboarding time we need is just one week prior to your target start date.
Our team ensures your employees are onboarded and paid as quickly as possible while keeping your business compliant with all local employment legislation. The minimum onboarding time begins after the employee submits all required information onto the Remote platform. The onboarding timeline is also dependent upon registration with local authorities.
For all non-nationals of the country of employment, the Right to Work assessment (if applicable) will add three extra days to the total time to onboard. There may be extra time required if we need to follow-up on the right to work assessment.
Please note, payroll cut-off dates can impact the actual first day of employment. Remote has a payroll cut-off date of the 10th of the month unless otherwise specified.
Competitive benefits package in New Zealand
Besides providing your employees with all statutory benefits in New Zealand, Remote can advise on and arrange for custom benefits and perks for your employees upon request.
Taxes in New Zealand
Learn how employment taxes and statutory fees affect your payroll and your employees’ paychecks in New Zealand.New Zealand’s tax structure is relatively uncomplicated. Key features include a progressive personal income tax and a Goods and Services Tax (GST) of 15% on most purchased goods.
Employer Company Income Tax
- 28% - Flat rate
- Kiwisaver is a voluntary work-based retirement scheme set up by the government. The program is for citizens and permanent residents living in the country.
- Employers must contribute 3% of the employee’s salary unless they have opted out of the scheme (or unless they are already contributing to another superannuation fund for their employees).
contribution tax (ESCT)
- ECST is deducted from your employer contributions to your employees' KiwiSaver or complying funds.
- The employer is responsible for determining the correct ESCT rate for each employee. The rate varies based on the employee’s salary and their tenure with the business.
Employee Personal Income Tax
- 10.5% - $0-$14,000
- 17.5% - $14,001-$48,000
- 30% - $8,001-$70,000
- 33% - $70,001-$180,000
- 39% - $180,000+
Types of leave
All employees are entitled to four weeks holiday leave or Annual Leave per each 12 months of employment.
Starting in July 2021, employees in New Zealand are entitled to ten days sick leave after six months of continuous employment with the same employer or if they have worked with the same employer for six months and an average of 10 hours per week or one hour in every week or 40 hours in every month.
Sick leave is available if the employee, their spouse, partner, dependent child or other person depending on them for care is ill or injured. Leave must be requested at the earliest possible time. The employer may request proof of illness or injury.
Employees in New Zealand are entitled to bereavement leave of one or more days after six months of continuous employment with the same employer or if they have worked with the same employer for six months and an average of 10 hours per week or one hour in every week or 40 hours in every month. The types of bereavement leave available include:
- Three days of paid bereavement leave on the death of a spouse, parent, child, sibling, grandparent, grandchild or spouse's parent
- One day of paid bereavement leave on the death of any other person if the employer accepts the employee has suffered a bereavement as a result of death
- Three days' bereavement leave on the end of your or another person’s (partner, former partner, primary carer) pregnancy by way of stillbirth or miscarriage
Employees may be eligible for paid and unpaid parental leave depending on whether they meet the 6 month or 12 month employment test (as set out below). As well as giving birth to a child, parental leave is available on the adoption or assumption of permanent primary care of a child under six years.
Parental leave falls into six categories: Primary carer leave (also Maternity Leave), Partner's leave, Special leave, Preterm baby leave, Negotiated carer's leave; and Extended leave.
Eligibility is based on the following:
- 6 month employment test: An employee has been employed by the same employer for at least an average of 10 hours a week in the 6 months just before the due date of the baby or the date they or their partner becomes the primary carer of the child under 6 permanently.
- 12 month employment test: An employee has been employed by the same employer for at least an average of 10 hours a week in the 12 months just before the due date of the baby or the date they or their partner becomes the permanent primary carer of the child under 6.
- Primary carer/
Female employees are entitled to 26 weeks of maternity leave and are paid between $177.00 to $585.80 by the government per week before tax. Mothers who suffer from a miscarriage or a stillbirth are also entitled to three days of paid leave.
Primary carer leave can begin up to 6 weeks before the due date.
Partners are given one-week unpaid leave after six months with the employer and two weeks of unpaid leave after 12 months with the same employer. Leave can be taken any time within 21 days before or after the birth. Fathers who suffer from a miscarriage or a stillbirth are also entitled to three days of paid leave.
A pregnant employee can take up to 10 days of unpaid special leave for their pregnancy.
If a pregnant employee gives birth to a child before the 36th week of pregnancy, additional leave can be taken for up to 13 weeks or until the end of the 36th week.
If an employee is not entitled to primary carer or parental leave, they can request a leave period. The employer must consider the request and notify the employee with a response.
Employees who have worked with the same employer for 12 months are entitled to up to 52 weeks of unpaid extended leave. Extended leave entitlement includes any primary carer leave taken (currently up to 22 weeks). Extended leave can be shared with a partner for a total of up 52 weeks.
- Domestic Violence Leave: Employees are entitled to ten days paid domestic violence leave after six months of continuous employment or if they have worked for six months for an average of 10 hours per week or at least one hour in every week or 40 hours in every month. Domestic violence is violence of any kind in families or intimate relationships. This includes physical, mental and emotional violence. The leave does not depend on when the violence took place. Employers may ask for proof of domestic violence.
- Stress Leave: An employer may grant leave for work-related stress as part of their obligation to provide a safe work environment. Stress leave may take the form of sick leave or as another negotiated leave. Employers may ask for proof of stress or request an employee seek medical help, but the employee does not need to provide this.
- Leave Without Pay (LWOP): Leave Without Pay can be granted when an employee takes time off without compensation. Common reasons for LWOP are when an employee needs time off for a vacation or illness and they do not have enough Sick Leave or Annual Leave to cover the absence. Other reasons could be for a sabbatical or similar period of study. Employees must get employer permission to take LWOP.
- Defence Force Volunteers: Employers must grant leave to employees in the Armed Forces for voluntary training or service and for active service. The leave does not need to be paid. The employer must hold the employee’s job during times of service.
- General Election Voting Leave: Employers must grant leave for general parliamentary election voting if you are or are qualified to be registered as an elector or if you don’t have enough time to vote before work.
- Jury Service Leave: Employers must grant employees time off for jury service and hold their jobs if they are called by the Ministry of Justice.
The termination process in New Zealand must adhere to a fair and reasonable process. The details are laid out in the Employment Contract offered at the beginning of employment.
A dismissed employee who is not on a trial period is entitled to request a written statement outlining the reason for dismissal within 60 days of being notified of the dismissal. The employer must provide this within 14 days of the request.
Employers must give an appropriate amount of notice as listed in the employment agreement. Depending on the nature of the role, 4 weeks' notice is often considered fair in New Zealand.
Severance pay must be given in accordance with the employment agreement.
Employers may use a paid probationary period for a variety of reasons including to assess an employee’s skills or to allow time for an employee to improve. All details must be outlined in the employment contract. The period must include a fair assessment of the employee in writing.