Guide to Hiring in New Zealand

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Guide to Hiring in New Zealand

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Ever wondered why New Zealand is a strong favorite for businesses looking for an Australasian base to expand or start a venture in? One of the easiest locations to setup a business in the world, a supportive community and great work-life balance are some of the few things business owners and employees enjoy in New Zealand.

Looking into expanding your business to New Zealand? We’ve compiled a guide for you that includes employment laws and best practices to take note of.

Please note that all the information listed below are to be used as a general guideline. For more detailed accounts of New Zealand employment laws and regulations, please visit the official governmental websites.

Labour Law – Basics

What are the basic requirements for employers in New Zealand?

  • Pay As You Earn – Employees are taxed directly from their pay through the method of PAYE (Pay as you earn). The employer is responsible for deducting and paying PAYE income tax for all their employees.

 

  • Minimum rights for all employees in New Zealand:
    • Four weeks of paid annual holiday per year after 1 year of service
    • 11 public holidays per year
    • Payment of time and a half for working on public holidays
    • 10 days paid sick leave per year after 6 months of employment
    • Three days paid bereavement leave for certain family members
    • Up to 52 weeks of parental leave
    • Rest and meal breaks
    • Overtime payments
    • Payment of wages to be made in cash.
      • These minimum rights and responsibilities set out in law apply to all employees.

 

  • Tax rates for businesses – Businesses and organisations pay income tax on their profit.
Business TypeRate
Self-employedThe tax rate for individuals
Most companies28%
Māori authorities17.5%
Non-profit organisations registered and incorporated under the Incorporated Societies Act 190828%
Unincorporated organisationsThe tax rate for individuals
Trusts and trustees – the initial amount of money put into a trust0%
Trust and trustees – any income the trust earns33%
Source: Inland Revenue

What is the different work permits and visas in New Zealand?

New Zealand has a range of visas for people looking to live and work there:

Visas that allow you to work in New ZealandAbout the Visa
Care Workforce Work to Residence VisaEligible for employees working for an accredited employer with experience in a care workforce role for at least 24 months.
Skilled Migrant Category Resident VisaFor employees with special skills, experience and qualifications New Zealand requires to grow its economy. Successful applicants are granted a permanent residency for themselves and their family members.
Straight to Residence VisaFor employees working with an accredited employer, holding a job offer from one and working a role on Tier 1 of the Green List.
Work to Residence VisaFor employees currently working with an accredited employer and has previously worked in a Tier 2 Green List role for at least 24 months.
Accredited Employer Work VisaA temporary visa for employees holding a job offer from an accredited employer and carrying the skills and qualifications for the job in hand.
Recognised Seasonal Employer Limited VisaEligible employees can work in New Zealand for a short time to work in horticulture and viticulture industries.
Business Visitor VisaEligible to applicants for business reasons of up to 3 months in any one year.
Post Study Work VisaApplicants who have completed an acceptable qualification in New Zealand are eligible.
Partner of a New Zealander Work VisaEligible applicants include ones with partners are a New Zealand citizen or resident.
Work Exchange Scheme Work VisaAllows people to work in New Zealand as part of approved work exchange schemes.
Supplementary Seasonal Employment Work VisaPeople who are already in New Zealand on a student or visitor visa can apply for a work visa to do seasonal work in the horticulture or viticulture industries.
Employees of Relocating Business Resident VisaEligible to employees who are integral to the success of the business they work for and who aren’t eligible for any other kind of resident visa to relocate to New Zealand.

 

For the full list of visas available, refer to the ‘Relevant Links’ section below.

What to note for existing employees?

  • Employer:
    • Pay employees what their employment contract states, and at least the legal minimum wage.
    • Give the employee at least four weeks’ annual holidays.
    • Give the employee the day off on 11 public holidays or give them an alternative holiday if they work, if it is a normal working day for them.
    • Pay at least time and a half if an employee works on a public holiday.
    • Give employees at least 10 days’ sick leave per year.
      • Sick leave increased from 5 days on 24 July 2021. Employees will get the extra 5 days from their next entitlement date.
    • Act in good faith and with honesty.
    • Provide a safe workplace.
    • Do not deduct money from wages unlawfully.

Source: Employment New Zealand

What to remember when hiring new employees?

Employees are required to ensure that their employees are legally allowed to be employed in New Zealand. You can find more details in the ‘Relevant Links’ section below.  In addition, labour laws are relatively employee friendly in New Zealand and it is critical that any disputes, terminations and agreements with employees are well documented.

 

What are the different discrimination laws in New Zealand?

Under New Zealand’s ‘The Human Rights Act 1993’ employers are not allowed to discriminate against applicants meaning hiring decisions cannot be based on prohibited ground. Questions such as the following are strictly not allowed to be asked by employers:

  • How do you identify?
  • What religion do you believe in?
  • What year did you graduate high school?
  • What are your political beliefs?
  • Are you currently pregnant? / Do you plan to be pregnant in the near future?

The Human Rights Act 1993 applies to job advertisements, interviews, job postings, application forms and all other types of employment. The law applies to all employees, before, during and after the person is employed under the employer.

 

What are the working hours in New Zealand?

  • In New Zealand, the maximum number of hours to be worked by an employee should be at no more than 40 hours per week. This does not include overtime working hours.
  • In New Zealand, if an employee or employer would like to change the working hours, it should be agreed on in writing on the employment agreement.
  • It is mandatory to pay all employees the minimum wage for all their regular and overtime working hours.
  • Common practice for working hours in New Zealand are usually Monday to Friday from 8:30am – 5pm.

 

How do trial periods and probationary periods work in New Zealand?

  • Trial Periods:
    • Employer carrying 19 or lesser employees is eligible to employ a new employee and have them serve a trial period for 90 calendar days of their employment.
    • A valid trial period:
      • Used in any industry for any type of work
      • Must carry a valid notice period in the employment contract
      • Must be agreed with the employee before he/she begins employment and must be agreed to in good terms and faith
      • Must be stated in the employment agreement
      • Means that the employee cannot bring a personal grievance for unjustified dismissal or other legal proceeding about their dismissal.
    • Employees serving trial periods will be able to carry all minimum employment rights and responsibilities and must not be treated differently from other employees in the company.
    • If an employee’s trial period is not up to satisfaction, the employer can dismiss the employee by giving them a notice that they will be dismissed. The notice:
      • Must be the amount of notice stated in the employment agreement
      • Must be given within the trial period
      • Does not have to have reasons for the employee’s dismissal.
  • Probationary Periods:
    • In New Zealand, probationary periods depends on what is stated on the employment agreement.
    • While an employee is serving his/her probationary period, employers must:
      • Communicate regularly and work closely with the employee to check if there are any concerns with their work. If there happen to be, employers are expected to communicate it with them and provide them with solutions on how to do better.
      • Provide support where required and give the employee an opportunity to improve.
    • If the employee passes his/her probation period, the employment continues automatically under the existing terms and conditions initially agreed upon hiring.
    • If the employee does not pass his/her probation period, the employer must communicate the results and explain that it is the end of their employment.
    • The employee, if dismissed after serving probation, does not agree upon being dismissed, he/she can raise a personal grievance of unjustified dismissal.

 

What are the minimum wage requirements in New Zealand?

As of 1 April 2023, the minimum wage rates (before tax) are as follows and apply to employees aged 16 years old or over:

Type of minimum wagePer hour8 hour day40 hour week80 hour fortnight
AdultNZ$22.70NZ$181.60NZ$90NZ$1,816
Starting-outNZ$18.16NZ$145.28NZ$726.40NZ$1,452.80
TrainingNZ$18.16NZ$145.28NZ$726.40NZ$1,452.80

Source: Employment New Zealand

  • Minimum Wage Exceptions and Exemptions:
    • There is no minimum wage for employees under the age of 16 years old.
    • The Minimum Wage Act 1983 does not apply to:
      • Apprentices covered under any other Act
      • Inmates of any charitable institution
      • Prisoners working while in custody under the Corrections Act 2004
      • Employees who travel between clients as covered by the Home and Community Support (Payment for Travel Between Clients) Settlement Act 2016.

 

Termination of Employment – Pay As You Earn (PAYE), Tax, Severance Payment & Long Service Payment

  • The notice period in New Zealand typically ranges from 2-4 weeks, depending on the service, type of job and how long it might take to replace the employee.
  • Once an employee has left, the employer must keep a record of the employee’s final pay, wage and time records, holiday and leave records that comply with the legislation for at least six years.
    • Employers must also retain wage deduction records, such as PAYE information (7 years), student loan deductions (if any) and superannuation contributions. Once the employer no longer needs the following information, it does not need to be kept.

 

  • Termination Pay:

 

Source: Employment New Zealand

 

  • Severance payment and long service payment is optional for employers in New Zealand. Hence, it is important for the employer to state in the Employment Agreement if there is any clause that specifies the following payment.

 

What is the retirement age in New Zealand?

New Zealand does not have an official retirement age. However, common practice is to retire at the age of 65 years old when the NZ Super and other pension payments are paid out to retirees.

 

Employment dispute channels

Employment Relations Authority (ERA); Employment Court; Human Rights Review Tribunal.

 

Is employment insurance compulsory in New Zealand?

  • Accident Compensation Corporation (ACC)
    • All employees must be covered with accident insurance for all work and non-work related injuries. Costs covered under the compensation include:
      • Medical
      • Loss of income
      • Social rehabilitation
      • Vocational rehabilitation
      • Lump sums for permanent disabilities

Labour Law - Leave

  • Employees who have worked for less than one year aren’t entitled to annual leave. However, in certain circumstances, their employers may let them take some of their annual leaves in advance.
  • After completing one year with their employers, employers are eligible to have four weeks of annual holidays.
  • Calculating an employees four weeks of annual paid leave:
    • For employees that have a predictable work pattern:
      • If an employee works 3 x 8 hour days per week, he/she is eligible to receive 12 paid days of annual leave.
    • For employees that have an unpredictable work pattern:
      • The employer and employee should try to point out if there is any pattern that could work to calculate the employee’s annual leave. This could be based on:
        • The agreed hours in the employment agreement
        • Consideration of the days and hours the employee has been working leading up to the holiday.
  • Employees are eligible to cash up one week out of four weeks of their annual holidays if they would like to.
  • Certain circumstances might see some employees paid their annual holiday entitlement on a pay-as-you-go basis.
    • This happens only when:
      • The employee is employed on a genuine fixed-term agreement of less than 12 month or
      • The employee works so intermittently or irregularly.
    • If a business has an annual closedown during the holidays, employees may be required to take their annual holidays during the period of the closedown. For example, most companies have an annual closedown during Christmas time.

Employees are allowed 10 days of sick leave per year. Employees are eligible to get five extra days annually when they reach their next entitlement date.

  • An employee is eligible to paid parental leave if:
    • They work for a New Zealand employer.
    • They pay income tax to New Zealand.
    • Their employment relationship is subject to New Zealand employment law.

 

  • Below is the summary of parental leave and the payment eligibility:
    • Mother / primary carer’s entitlements:
      Mother employed and meets the 12 month criteria for parental leaveMother employed and meets the 6 month criteria for parental leaveMother self-employed and meets criteria for parental leave paymentMother employed and doesn’t meet 12 or 6 month criteria for parental leave
      Partner employed meets the 12 month criteria for parental leaveMother entitled to:

      • 10 days special leave (if pregnant)
      • 26 weeks primary carer leave
      • 26 weeks parental leave payment
      • 52 weeks unpaid extended leave (including up to 26 weeks of primary carer leave taken).
      Mother entitled to:

       

      • 10 days special leave (if pregnant)
      • Up to 26 weeks primary carer leave
      • 26 weeks parental leave payment.
      Mother entitled to:

      • 26 weeks parental leave payment if not working to care for the child
      • No entitlement to primary carer or extended leave, but takes time off self-employment.
      Mother entitled to:

      • No special leave
      • No primary carer or extended leave
      • May apply for negotiated carer leave
      • Parental leave payment available only if meets employee parental leave payment test.
      Partner employed and meets the 6 month criteria for parental leaveMother entitled to:

      • 10 days special leave (if pregnant)
      • 26 weeks primary carer leave
      • 26 weeks parental leave payment
      • 52 weeks unpaid extended leave (including up to 26 weeks of primary carer leave).
      Mother entitled to:

      • 10 days special leave (if pregnant)
      • 26 weeks primary carer leave
      • 26 weeks parental leave payment.
      Mother entitled to:

      • 26 weeks parental leave payment if not working to care for the child
      • No entitlement to leave, but takes time off self-employment.
      Mother entitled to:

      • No special leave
      • No primary carer or extended leave
      • May apply for negotiated carer leave
      • Parental leave payment available only if meets employee parental leave payment test.
      Partner meets the self-employed criteria for parental leave paymentMother entitled to:

      • 10 days special leave (if pregnant)
      • 26 weeks primary carer leave and 26 weeks parental leave payment
      • 52 weeks unpaid extended leave (including 26 weeks primary carer leave).
      Mother entitled to:

      • 10 days special leave (if pregnant)
      • 26 weeks primary carer leave and 26 weeks parental leave payment.
      Mother entitled to:

      • 26 weeks parental leave payment if not working to care for the child.
      • No entitlement to leave, but can take time off self-employment.
      Mother entitled to:

      • No special leave
      • No primary carer or extended leave
      • May apply for negotiated carer leave
      • Parental leave payment available if meets employee parental leave payment test.
      Partner doesn’t the self-employed criteria for parental leave paymentMother entitled to:

      • 10 days special leave (if pregnant)
      • 26 weeks primary carer leave and 26 weeks parental leave payment
      • 52 weeks unpaid extended leave (including 26 weeks primary carer leave).
      Mother entitled to:

      • 10 days special leave (if pregnant)
      • 26 weeks primary carer leave and 26 weeks parental leave payment.
      Mother entitled to:

      • 26 weeks parental leave payment if not working to care for the child.
      • No entitlement to leave, but can take time off self-employment.
      Mother entitled to:

      • No special leave
      • No primary carer or extended leave
      • May apply for negotiated carer leave
      • Parental leave payment available if meets employee parental leave payment test.

 

As of 1 July 2023, New Zealand is enhancing paid parental leave by 7.7% to align with the rise in the average wage. New parents will receive an additional NZ$51 per week, and those who take the full 26 weeks of parental leave will enjoy a boost of NZ$1,327. Moreover, self-employed parents will benefit from a minimum rate increase to NZ$227 per week, equivalent to 10 hours of the adult minimum wage.

As of mid-2024, new parents will receive a 3% government contribution to their KiwiSaver while on paid parental leave, given they continue their own KiwiSaver contributions.

Employees in New Zealand are entitled to paid rest and unpaid meal breaks which stand at a minimum of 10 minutes and at least 30 minutes respectively.

 

Break entitlements:

2 hours or more, but not more than 4 hours workedMore than 4 hours, but no more than 6 hours workedMore than 6 hours, but less than 10 hours worked10 hours or more, but not more than 12 hours workedMore than 12 hours, but no more than 16 hours workedMore than 14 hours, but no more than 16 hours worked
1 x 10 minute paid rest break1 x 10 minute paid rest break1 x 10 minute paid rest break1 x 10 minute paid rest break1 x 10 minute paid rest break1 x 10 minute paid rest break
1 x 30 minute unpaid meal break1 x 30 minute unpaid meal break1 x 30 minute unpaid meal breakFirst 30 minute unpaid meal breakFirst 30 minute unpaid meal break
1 x 10 minute paid rest break1 x 10 minute paid rest break1 x 10 minute paid rest break1 x 10 minute paid rest break
1 x 10 minute paid rest break1 x 10 minute paid rest break1 x 10 minute paid rest break
Second 30 minute unpaid meal breakSecond 30 minute unpaid meal break
1 x 10 minute paid rest break
Source: Employment New Zealand

What are the public holidays in New Zealand?

New Zealand Public Holidays 2024

Employees are entitled to public holidays as follows:

HolidayDate
New Year’s Day1 January
Day after New Year’s Day2 January
Waitangi Day6 February
Good Friday29 March
Easter Monday1 April
ANZAC Day25 April
King’s Birthday3 June
Matariki28 June
Labour Day28 October
Christmas Day25 December
Boxing Day26 December

New Zealand Public Holidays 2025

Employees are entitled to public holidays as follows:

HolidayDate
New Year’s Day1 January
Day after New Year’s Day2 January
Waitangi Day6 February
Good Friday18 April
Easter Monday21 April
ANZAC Day25 April
King’s Birthday2 June
Matariki20 June
Labour Day27 October
Christmas Day25 December
Boxing Day26 December

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In the meantime, stay updated on Labour Law updates throughout the year through our APAC Labour Law Updates. For more news and insights into the market, make sure to subscribe to our blog so you don’t miss out on the latest HR news or contact our team to learn more about the latest changes!

 

Please note that all the information listed below are to be used as a general guideline. For more detailed accounts of New Zealand employment laws and regulations, please visit the official governmental websites.

Interested to explore the idea of payroll outsourcing, EOR, or Visa application services?

Links International is a leading payroll outsourcing provider across Asia Pacific and supports payroll in over 17 countries. Please do not hesitate to contact us.

Relevant Links: