How to hire casual employees in New Zealand

If you run a business where the workload changes from week to week, or you have periods during the year where demand is a lot higher, then you’re probably hiring casual employees to help you manage. 

By hiring casuals, you can scale your workforce up and down, adding flexibility to your business when it’s needed most. However, there are a few considerations when hiring casual employees. 

Now more than ever, it’s critical to be compliant, with changes in both hiring technology and employment law shifting the landscape. The rise of AI-powered hiring platforms can help you find and manage casual staff more efficiently, whether you’re looking for one or many new casual employees. Still, speed shouldn’t mean that legal essentials are missed.

In this guide, we’ll walk you through what a casual employee is, what you need to include in casual employee agreements, pay, tax and leave obligations and how to onboard casual employees effectively. 

Download the guide by filling in the form on the right.

What is a casual employee in NZ?

Casual employees and casual employment aren’t defined under New Zealand law, according to Employment New Zealand. However, they categorise casual employment as an employment arrangement where employees:

• Can work when it suits them/their employer, with the ability to turn down work
• Have no minimum set hours 
• Do not have a regular pattern of work
• Are not expecting (or entitled to) ongoing employment

Casual employees have the same entitlements to rest and meal breaks as fixed-term, part-time and permanent full-time employees.

However, unlike other types of employment, casual employees only work when their employer asks (and the employee agrees). This is different to fixed-term, part-time and permanent full-time employees, who all have defined work hours set out in their employee agreements.

Common types of casual employment include:

• Christmas casuals
• Seasonal farm workers
• Project-specific hires 

While casual employment is common in service industries, many different industries may get a lot out of hiring casual employees.

What to include in casual employment agreements 

There are a few things you’ll need to include when putting together a casual employee agreement. These include details on:

• Their wages (including penalty/overtime rates if applicable)
• Holiday pay, which is often paid to casual employees in lieu of annual leave accrual
• The nature of their casual engagement
• Typical business operating hours and when they may reasonably be asked to work

To make things easier for small-to-medium enterprises, Employment Hero has customisable contracts and policies within our platform to help you manage employee setup and compliance. Find out more about our employee management software and book a demo. 

Are casual employees entitled to leave in New Zealand?

Annual holidays and pay-as-you-go

Casual employees don’t usually accrue annual leave. However, if it is written into their agreement, then they will receive 8% of their gross earnings on top of their normal pay during each pay run. This is often preferred by employers, as casual employees typically don’t have set hours.

If you agree to it, the casual employee can instead accrue annual leave. This would see them receive four weeks of annual leave after working with you for 12 months continuously.  However, you may choose to let them take this leave in advance. 

Sick leave, bereavement and public holidays

Casual employees are entitled to sick leave and bereavement leave after working with you for six months. Furthermore, they are eligible if during that six month period, they have worked:

• An average of 10 hours a week or more, and
• At least one hour a week or 40 hours a month

Like other types of employees, eligible casual employees get 10 days of paid sick leave per year. They can carry unused sick leave into the next year, for a maximum of 20 days of unused paid sick leave.

Casual employees are also eligible for bereavement leave once they have met the above eligibility criteria. Casual employees can take three days of bereavement leave if there is a death in their immediate family, or one day of paid bereavement leave if someone close to them, but outside of their immediate family, passes away.

If you have a fast-moving casual workforce, then managing leave entitlements can get tricky. Leave management software can make managing compliance easier, so you can stay on top of leave entitlements and requests, even when things get busy.

Pay and tax obligations for casual staff

Casual employees must be paid at least the New Zealand minimum wage, which is $23.50 an hour. As part of paying your casual employees, you’ll need to tax their Pay As You Earn (PAYE) from each pay. 

As an employer, you’re responsible for deducting and paying PAYE income tax on your employee’s behalf. You’ll also need to report PAYE details to the IRD within two working days of a pay run.

KiwiSaver contributions should also be paid for your casual employees, with all payments documented. Finally, you’ll need to deduct any Accident Compensation Corporation (ACC) levies from their wages. 

You must maintain accurate payroll records for all casual employees for six years. You may also be required to provide payslips to your employees, depending on their employee agreement. By making accurate record-keeping part of your process, you can better prepare for any potential audits. 

Employment Hero’s all-in-one HR, payroll and hiring platform makes it easier to deliver payslips on time and keep accurate payroll records. If you’re expanding your casual workforce, then we’d love to hear from you.

Step-by-step: Hiring a casual employee

Ready to hire casual employees to boost your workforce’s capabilities? Here’s a guide to help you find that next rockstar casual.

1. Create a job ad

First, you’ll need to outline exactly who you’re looking for in your job ad. You should clearly outline the skills and experience you’re looking for, as well as the nature of the casual position (e.g. what hours are available and when you expect them to work).

2. Shortlist applicants

Once the CVs have rolled in, it’s time to decide who you want to interview. Look for the skills needed for the position and assess cultural fit. From there, decide how many people you want to interview. 

A good rule of thumb is to interview 5-10 people for a role but this’ll depend on how many quality applicants come through.

3. Conduct interviews

Next up is interviews. If you need help with knowing what to ask job-seekers, we’ve put together a guide to some common job interview questions and what answers you can expect. Having standardised questions can make it easier to compare candidates, while making the process fair.

4. Ensure compliance

Decided who you’re going to hire? Now it’s time to put together the employment agreement.  You’ll need to include the details mentioned above, including pay, tax obligations and leave entitlements, as well as clearly defining the nature of the casual working arrangement. This can help prevent any legal issues down the line.

5. Onboard your hires

Finally, it’s time to onboard your new hire. This is the exciting part, as all your hard work can start to make a real difference to the business. The work doesn’t end here though. Regular check-ins with your new hires can make all the difference.

Looking to make life easier? Our AI-powered hiring software can help you find, shortlist and assess candidates with ease, so you can focus on interviewing the right people. When things get busy and you need to scale up your workforce fast, our software is here to help. 

Onboarding casual employees with confidence

Ready to onboard your casual employees? Having a proper workplace orientation in place, as well as an initial training schedule, can help you start things off on the right foot.

Their orientation should cover any access to tools, workplace policies and an introduction to the team(s) they’ll work with in your business. This is also a great time to share your company’s mission and values, so they feel included from day one.

If you’re looking to improve your onboarding experience, then robust onboarding software can help. Our onboarding software is designed to help your casual employees hit the ground running from day one, rather than feeling overwhelmed. 

Managing casual staff effectively

Looking to manage how you’re using your casual staff? Set expectations from the get-go. Explain how you’ll roster them on for shifts and how you’ll communicate with them, so they’re always informed of how they’re going. Employee management software can make this a lot simpler.

Like with any employee, you should look to provide ongoing support to your casual employees and conduct regular performance reviews. While they may work more inconsistently than a permanent employee, performance reviews can still help with their career development. 

If you’re looking for help with running your performance reviews, then we’ve put a template together that’s designed to help your employees get more out of their reviews. We’ve also put together a checklist so you can monitor their performance.

Avoiding “Casual Creep” and misclassification

If you’re hiring casual employees, then you may have heard of a concept called “casual creep”. Casual creep is when someone starts working regular hours, but is still defined as an employee.

Legally, casual creep poses a risk, as casual employees and part-time employees have different leave and benefit entitlements. Regular hours can imply a permanent relationship between you and your employee, which would require a change in contract type. 

Stringent record-keeping and regular contract reviews can help you identify if and when a casual employee needs to be shifted to a different type of employee agreement. Employment New Zealand’s casual employment guidelines can also help you identify if casual creep is occurring. 

Ready to hire casual employees faster?

Now that you’ve learnt the ins and outs of hiring casual employees, it’s time to bolster your workforce. Here at Employment Hero, we can help you find, shortlist and assess candidates using our AI-hiring platform, to make life even easier.

Our platform is designed to save you time and help you manage compliance, so you can navigate your business’ busy season. Talk to our business specialists or download the “How to hire casual employees” guide today.

The information in this article is current as at 26 August 2025, and has been prepared by Employment Hero Pty Ltd (ABN 11 160 047 709) and its related bodies corporate (Employment Hero). The views expressed in this article are general information only, are provided in good faith to assist employers and their employees, and should not be relied on as professional advice. Some information is based on data supplied by third parties. While such data is believed to be accurate, it has not been independently verified and no warranties are given that it is complete, accurate, up to date or fit for the purpose for which it is required. Employment Hero does not accept responsibility for any inaccuracy in such data and is not liable for any loss or damages arising directly or indirectly as a result of reliance on, use of or inability to use any information provided in this article. You should undertake your own research and seek professional advice before making any decisions or relying on the information in this article.