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New Zealand is a highly developed economy with a strong rule of law, skilled workforce, and progressive employment standards. Its transparent regulatory framework, competitive minimum wage, and straightforward payroll system make it a favourable destination for companies looking to hire globally. The country’s focus on work-life balance and employee wellbeing also makes it attractive to talent from around the world.
New Zealand is known for its fair and transparent labour laws, a highly educated workforce, and modern digital infrastructure. The country has clearly defined employer obligations and provides strong protections for employees.
Get details on New Zealand’s employment laws, tax obligations, and cost structures in our complete hiring guide before expanding.
In New Zealand, all employment agreements must be in writing and signed by both parties. These can be permanent, fixed-term, or casual depending on the nature of the role. The agreement must include key terms like wages, hours of work, leave entitlements, and notice periods.
Notice periods: Must be specified in the employment agreement, often ranging from one week to several months, depending on the role.
Termination of employment: Permitted with notice or for cause; trial periods of up to 90 days may apply for new employees
Want to learn more about employment contracts in New Zealand? Get our full template now!
Employee entitlements in New Zealand are protected under the Employment Relations Act and include a variety of leave types and workplace protections. Many employers also offer additional perks to attract top talent.
Leave policies: Annual leave (4 weeks after 12 months), sick leave (minimum 10 days per year after 6 months), public holidays (11 legislated days), and bereavement leave (3 days for immediate family). Parental leave (up to 26 weeks unpaid primary carer leave with job protection) is also a statutory entitlement.
Non-mandatory: Private health insurance is not mandatory in New Zealand, which has a universal public healthcare system, but it is a common employer perk.
Mandatory benefits: Annual leave, public holidays, sick leave, and KiwiSaver (if enrolled). The ACC (Accident Compensation Corporation) levy is also a mandatory cost to the employer.
Common perks: Health insurance, wellbeing initiatives, flexible hours, etc.
Leave policies: Annual leave, sick leave, public holidays, and bereavement leave.
Want to learn more about all the employee benefits available in New Zealand?
VAT: 15%
Employee income tax (PAYE): New Zealand uses a progressive Pay As You Earn (PAYE) system. Income is taxed in brackets, with rates ranging from 10.5% to 39%.
Employer taxes: Employers are responsible for deducting and remitting PAYE (employee income tax), KiwiSaver (employee and employer contributions), ACC Earners' Levy (employee portion), and ESCT (Employer Superannuation Contribution Tax) on their KiwiSaver contributions.
Fringe benefit tax (FBT): A tax paid by the employer on most non-cash benefits provided to employees (e.g., private use of a company car, subsidised health insurance).
Want to find out more about New Zealand’s tax allowances and similar tax regulations? Click here to read more now!
Payroll in New Zealand must be processed in accordance with the Holiday Act 2003 and the Wages Protection Act. Employers must pay staff regularly (commonly weekly, fortnightly, or monthly) and issue detailed payslips.
Salary payment deadline: Payroll is paid according to the schedule specified in the employment agreement (weekly, fortnightly, or monthly).
Taxes and contributions payment deadline: For small PAYE withholders (less than NZD 500,000 annually), deductions are due by the 20th of the following month. For large PAYE withholders, payments are due twice a month (on the 20th and the 5th of the following month).
Payroll declarations deadline: Employers must file an electronic payroll return with the Inland Revenue Department (IRD) within two working days after the employee's payday.
Payroll currency: New Zealand Dollar
New Zealand’s employment framework is shaped by multiple statutes, with the Employment Relations Act at its core. Employers must ensure fair treatment, provide written agreements, and follow rules around leave, termination, and workplace safety.
Total employment cost: Not specified as a total percentage, as it is variable, but must account for KiwiSaver and the ACC levy.
Employer’s social security contributions: 3% (minimum for KiwiSaver, if the employee is enrolled) plus the ACC levy.
Employer’s health insurance costs: Not a mandatory cost, but commonly offered. The cost is highly variable.
Employees’ social security contributions: 3%, 4%, 6%, 8% or 10% (for KiwiSaver, employee chooses the rate), plus the ACC Earner's Levy.
Employee’s health insurance costs: Not mandatory. If offered, the price is typically shared or covered by the employer as a standard perk.
Minimum wage: NZD 23.50 per hour (Effective 1 April 2025).
Probation period: Probationary periods must be explicitly agreed upon in writing as part of the employment agreement. They allow employers to evaluate an employee's suitability for a role, but do not remove the employee's right to raise a personal grievance.
Using EOR services in New Zealand allows you to legally employ individuals in the country without opening legal entities there. The EOR takes over all the legal responsibilities as an official employer, including:
Using PEO services in New Zealand provides HR and administrative support, while you remain the legal employer. PEO services are ideal for employers who already have legal entities in New Zealand but need support to manage their workforce operations, including:
Native Teams provides a payroll calculator adjusted per New Zealand’s labour laws. Estimate gross-to-net salaries, tax withholdings, and employer costs in New Zealand with our localised calculator. Designed to meet all payroll and compliance requirements.
Note: The information provided above is for general guidance only and should not be considered a substitute for legal advice. We strongly recommend consulting with qualified professionals who specialise in local labour laws before making any hiring decisions. While the data was accurate at the time of writing, labour regulations are subject to change, and it is your responsibility to stay informed about the latest developments.
Last update: October 29, 2025
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Freelancers and gig workers in New Zealand are generally considered self-employed and are responsible for managing their own taxes and social security contributions. As a client, you are not required to make contributions on their behalf.
However, to avoid potential misclassification, it’s important that the working arrangement does not resemble an employer-employee relationship. Always ensure that you have a clearly defined contract that outlines the scope of work, deliverables, payment terms, and other key conditions.
