Independent Contractor Agreement NZ: What to Include

When hiring independent contractors in New Zealand, a handshake or verbal agreement won’t cut it. Whether you’re outsourcing a one-off project or engaging a long-term contractor, having a written agreement is essential. Without one, you could be exposing your business to serious risks: tax errors, legal disputes or Employment Relations Authority claims.

This checklist walks you through what must be included in an employment agreement in NZ for contractors. It covers legal obligations, tax responsibilities and the key clauses that protect both your business and your contractor relationship.

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Disclaimer: The information in this checklist and its associated article is current as at 30 July 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 are general information only, are provided in good faith to assist employers and their employees, and should not be relied on as professional advice. The 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 either 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 checklist and associated article.

What is an independent contractor agreement?

An independent contractor agreement is a written contract that outlines the relationship between a business and a self-employed contractor. It sets expectations, defines deliverables and protects both parties under New Zealand law.

Unlike employees, contractors manage their own tax, provide their own tools and operate independently. But it’s not enough to simply label someone a “contractor”. How the relationship works in practice matters.

If you’re unsure whether a worker should be classified as a contractor or employee, consider getting support from our HR Advisory service.

Contractor vs employee: key legal tests

In New Zealand, employment classification is guided by four key principles:

• Intention: What did both parties agree to?
• Control: Who decides how, when and where the work is done?
• Integration: Is the contractor embedded in the business?
• Economic reality: Is the contractor running their own business?

Misclassification can be costly. If in doubt, our HR Advisory service can help assess the working relationship and advise on the right classification.

Health and safety obligations under NZ law

Under New Zealand legislation, contractors are considered “workers”. That means your business has a duty to ensure their health and safety, just as you would with employees.

Use your agreement to clarify responsibilities, especially if contractors will be on-site or using business-owned equipment.

Tax, ACC and KiwiSaver obligations

Independent contractors are responsible for their own:

• Income tax (including provisional tax)
• ACC levies
• GST registration (if earning over $60,000 per year)
• KiwiSaver contributions (optional opt-in)

While most contractors handle their own taxes, there are exceptions. If you’re unsure about tax obligations, our HR Advisory service can help clarify them.

Essential clauses for NZ contractor agreements

A strong contractor agreement should always cover the following:

Scope, deliverables and payment terms

Define the project, timelines, milestones and how invoices will be handled.

Intellectual property and confidentiality

Clarify who owns the work produced and what information must be kept confidential.

Restraint of trade and non-solicitation

Protect your business from contractors poaching clients, staff or intellectual property after the contract ends.

Termination, indemnity and liability

Include a termination clause and define responsibilities if something goes wrong.

Dispute resolution clause

Set out how conflicts will be resolved before they escalate into legal action.

Need help drafting or reviewing these clauses? Our HR Advisory service is here to support you with customised contractor agreements.

Regulatory and compliance considerations

Contractor agreements must comply with New Zealand’s commercial and consumer legislation, including fair contract terms and recordkeeping obligations. For smaller contracts, unfair terms may still be challenged in court.

Recordkeeping and document retention

You should keep signed agreements, tax records and invoices for at least seven years. Accurate records are critical if your contractor relationship is ever reviewed.

Negotiation and signing best practices

Avoid copy-paste contracts. Tailor your agreement to the actual arrangement, allow time for negotiation and ensure both parties sign with full understanding.

For more complex arrangements, such as cross-border contractors or IP-heavy projects, seek professional guidance. Our HR Advisory service can support you with contract drafting and review.

Avoiding misclassification risks and penalties

Misclassifying an employee as a contractor can trigger:

• Backdated tax and leave obligations
• ACC adjustments
  Employment Relations Authority disputes
• Penalties and interest from regulators

Get it wrong and the consequences can be significant. Get it right with help from our HR Advisory service.

Get expert help with contractor agreements

Independent contractor agreements can be complex, especially when IP, restraint clauses or international jurisdictions are involved. Our local HR Advisory service is here to help.