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Hire Employees in New Zealand

Looking to hire employees in New Zealand? Employment Hero's global teams is your Employer of Record of choice for your hiring needs.
hire employees in new zealand

About New Zealand

New Zealand is a developed nation with a GDP of $226 billion and a population of over 5 million people. It is well known for ranking highly in international comparisons of national performance such as quality of life, education and economic freedom. New Zealand consistently ranks high on ease of doing business, and it’s equally becoming a popular destination with digital nomads and remote workers.

New Zealand’s employment landscape is governed by legislation and common law which covers all aspects of the employment relationship and employment contract. The statutory framework imposes a mutual duty of good faith in exercising all employment rights and obligations.

 

Key Facts

 

Employment terms
Timezone GMT +12, subject to Daylight Savings in summer
Currency New Zealand Dollar (NZD)
Capital City Wellington
Official Language English, Maori, NZ Sign Language
Ease of doing business Very friendly to business (#1 out of 190 countries)
Minimum Wage NZD 21.20
Individual Income Tax 10.5% – 39%
Estimated Employer costs (mandatory & customary) 6.5%
Statutory Employer Cost 6.5%
Customary Benefit Cost 0.0%
Employer retirement contribution: Kiwisaver KiwiSaver is a voluntary retirement savings scheme.

If an employee chooses not to opt-out, they must contribute a minimum of 3% up to a maximum of 10% which is deducted from their salary. Employers must provide a matched contribution of a minimum of 3% in addition to the Employee’s total compensation.

 

Employment in New Zealand

Working Hours
  • The standard full-time working hours are between 37.5 to 40 hours per week.
Overtime
  • There are no legal requirements to pay overtime for additional hours worked. However, overtime hours and pay should be stipulated in the employment agreement and it is typical for many employees to receive overtime payments.
Probationary Period
  • Employers determine the length of probation, which varies depending on the nature of the business and the role. Probation periods are typically three or six months.
Payroll Cycle
  • There are no legal requirements for when an employee needs to be paid but employees are typically paid fortnightly or monthly.

 

Main Types of Leave in New Zealand

 

Annual Leave

Employees are entitled to 4 weeks of paid annual leave per 12 months worked.

  • Unused leave can be paid out upon termination
  • Employees have the option to get 1 week paid out in cash (out of the 4 weeks)
Sick Leave

Employees are entitled to 10 days per year provided they:

  • Have 6 months of continuous employment with the same employer, or
  • Have worked for the same employer for 6 months for an average of 10 hours per week (at least one hour per week or 40 per month).
Parental Leave

There are various types of parental leave both paid and unpaid, dependent on the amount of time worked (6 months or 12 months). Parental leave can apply for a newborn child or for adoption purposes. Generally, employees are entitled to 26 weeks of paid primary carer leave for up to $621.76 per week.*

Types of parental leave: Primary carer leave, special leave, partner’s leave, extended leave and negotiated carer leave

Eligibility:

  • 1 week for employees who have worked continuously for 6 months (for an average of 10 hours per week).
  • 2 weeks for employees who have worked continuously for 12 months (for an average of 10 hours per week).

Employment Termination

Notice Period

Notice periods are typically set between 2 – 4 weeks.

If the employment agreement doesn’t have a notice period, then fair and reasonable notice must be given taking into account the type of job and length of service.

 

Termination

It is imperative that you seek professional advice before taking any action on termination*

An employer must provide notice when ending an employee’s employment (with the exception of dismissal due to serious misconduct).

In all cases, the employer must have a good reason for the dismissal and follow a fair process.

 

Severance

Severance payments include the hours worked until the final day and any unused annual leave or days in lieu payments.

Additional payments are either specified in the employment agreement or negotiated as a part of the leaving package.

 

Download the Detailed Employment Terms Factsheet

*Information here is current as at 16/09/2022, for full details and costs download the factsheet.
Hiring Process in New Zealand
Sorted.
Hiring an employee in New Zealand is no easy task. Especially, if you are overseas, and lack the knowledge of employment law and regulations relating to international HR compliance, payroll, benefits and taxes.

Employment Hero has a local entity in New Zealand and we fully understand all the ins and outs of hiring in the local market, so we can help you throughout the step-by-step process.
NZ Employment Law
Decoded.
New Zealand has laws that help keep workplaces fair. You should be aware of the rules and what your employer rights and responsibilities are. Under New Zealand employment law, employers and employees both have rights and responsibilities. Do you know your responsibilities?
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