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How to hire and pay employees in New Zealand
Slasify
Nov 18, 2025
| Key Takeaways |
|---|
| 1. Payroll can be weekly, fortnightly, or monthly, with frequency determined by employment contracts or collective agreements. |
| 2. Personal income tax is progressive from 10.5% to 39%, with no local employment taxes applied. |
| 3. KiwiSaver contributions are mandatory unless opted out, with employers contributing 3% plus applicable ESCT. |
| 4. Minimum wage rises to NZD 23.50/hour in April 2025, with lower rates for trainees and entry-level employees. |
| 5. Annual leave is 4 weeks per year, with additional rules for sick leave, parental leave, and public holidays. |
| 6. Termination requires a fair and reasonable process, including valid reasons, employee access to information, and opportunity to respond. |
Discover the global hiring and employment landscape in New Zealand – with a reputation as one of the least corrupt nations globally, New Zealand is an ideal choice for organizations aiming to establish an Australasian base. Its straightforward tax system and business-friendly environment make it a prime destination for regional expansion.
Personal Income Tax
| Taxable Income (NZD) | Progressive Tax Rate (%) |
|---|---|
| Up to 15,600 | 10.5 |
| 15,601–53,500 | 17.5 |
| 53,501–78,100 | 30 |
| 78,101–180,000 | 33 |
| Over 180,000 | 39 |
Local Tax
There are no local taxes on employment income in New Zealand.
Statutory Contributions
Contributions for New Zealand Superannuation (KiwiSaver) is mandatory unless the employee has chosen to opt out. That being said, those on a temporary, visitor, work or student visa cannot join KiwiSaver.
Employer Contributions
| Contribution Rate | Note | |
|---|---|---|
| KiwiSaver | 3% |
Employer's KiwiSaver contributions are subject to an employer superannuation contribution tax (ESCT), which will be deducted from the contribution amount. ESCT rates are determined by the employee's total salary and employer's total contribution in the previous year, and are progressive from 10.50% to 39%. ESCT is not required if the employer's contribution is treated as part of the employee's gross salary and is therefore subject to be taxed on a PAYE basis. |
| Work Levy (ACC) | avg. 0.63% | Actual rate may vary by the risk associated with the type of work performed. Estimate the levy based on the type of work here. |
| Working Safer Levy (ACC) | 0.08% |
Employee Contributions
| Contribution Rate | Note | |
|---|---|---|
| KiwiSaver | 3%–10% | The default rate is 3%, but the employee can choose to contribute more at 4%, 6%, 8% or 10% |
| ACC Earner's Levy | 1.67% | - |
Payment of Wages
The Employment Relations Act does not regulate the frequency at which an employee is to be paid, nor do they specify an exact due date. Employees can be paid weekly, fortnightly or monthly in accordance with their respective employment contracts or collective agreements.
Minimum Wage
Effective April 1, 2025, minimum wage for a working adult in New Zealand is set at NZD 23.50 per hour, while employees in training or those who are just starting out have a lower minimum wage of NZD 18.80 per hour.
Minimum wage per day, per week and per fortnight is calculated over 8 hours, 40 hours and 80 hours, respectively.
Statutory Bonus
There is no statutory bonus in New Zealand.
Termination
Employers who intends to dismiss their employees shall provide them with access to the information relevant to their decision and give them the opportunity to respond before the decision to terminate is finalized.
For a dismissal to be considered just, the employer must have a genuine reason and conduct an objective test of fairness. Some possible reasons that would justify a dismissal include serious or repeated misconduct, performance issues, redundancy, incompatibility and incapacity.
Notice Period
While no specific notice period requirements is stipulated under the Employment Relations Act, a fair and reasonable notice must be given before terminating an employment relationship. This should take into account the employee's length of service, type of job, how long it might take to replace the employee and common practice in the workplace.
That being said, summary dismissal without notice may be permissible in cases of serious misconduct. Moreover, employer and employee can have an agreement made in writing to waive the required notice period either without pay or by putting the employee on a paid garden leave.
Severance Pay
There are no severance pay requirements under the Employment Relations Act, but this may still be regulated by a collective agreement or an individual employment contract.
Probationary Period
Employees may come to a written agreement to have a probationary period or a trial period, provided that the following conditions are met:
| Probation Period | Trial Period | |
|---|---|---|
| Eligibility Requirements | For any employer to assess an employee's suitability for a new role | For any employer to assess a new employee's suitability for the job |
| Term Limit | No limit, but must be reasonable | 90 days |
| Reasons for Dismissal | Unsatisfactory job performance, with the employer providing their reasons and an opportunity for the employee to respond | No reason needed |
| Personal Grievance | Employees can bring a personal grievance for unfair dismissal | Employees cannot bring a personal grievance for unfair dismissal |
Work Time Rules
Standard Working Hours
Standard working hours must be mutually agreed upon between the contracting parties, but are subject to a maximum of 40 hours per week.
Break Period
Employees are entitled to a paid rest break and an unpaid meal break, as follows:
| Work Period | Rest Break | Meal Break |
|---|---|---|
| 2–4 hours | 1 x 10 minutes | - |
| 4–6 hours | 1 x 10 minutes | 1 x 30 minutes |
| 6–8 hours | 2 x 10 minutes | 1 x 30 minutes |
The timings of the breaks are to be agreed upon between the employer and employee. However, in the absence of such agreements, it shall be taken as follows:
| Work Period | Rest Break | Meal Break |
|---|---|---|
| 2–4 hours | 1/2 of the way through the work period | - |
| 4–6 hours | 1/3 of the way through the work period | 2/3 of the way through the work period |
| 6–8 hours | 1/4 AND 3/4 of the way through the work period | 1/2 of the way through the work period |
It is important to note that those working in excess of 8 hours per day are entitled to additional rest and meal breaks that are equivalent to the above, assessed in accordance with the number of hours worked in excess of 8 hours that day.
In addition to the regular rest and meal break, employers must provide breastfeeding breaks to their employees, which may be paid if both parties agree to such a term.
Overtime
The Employment Relations Act does not regulate overtime work. However, employees required to work beyond their agreed standard working hours must be compensated fairly for their time.
Weekly Rest Days
Weekly rest days are not regulated by the Employment Relations Act, and shall be negotiated in good faith between the employer and employee.
Holiday and Leave Entitlements
Public Holidays
Employees are entitled to be paid for public holidays that fall on days that would otherwise be working days for them. There are 11 days of public holidays in New Zealand for 2025.
| Holiday | Date |
|---|---|
| New Year's Day | January 1 |
| Day after New Year's Day | January 2 |
| Waitangi Day | February 6 |
| Good Friday | Aproil 18 |
| Easter Monday | April 21 |
| ANZAC Day | April 25 |
| King's Birthday | June 2 |
| Matariki | June 20 |
| Labor Day | October 27 |
| Christmas Day | December 25 |
| Boxing Day | December 26 |
In addition to the above, each province's anniversary is also celebrated as public holidays in each respective province.
| Province | Anniversary Day | Observed Day in 2025 |
|---|---|---|
| Auckland | January 29 | January 27 |
| Taranaki | March 31 | March 10 |
| Hawke's Bay | November 1 | October 24 |
| Wellington | January 22 | January 20 |
| Marlborough | November 1 | November 3 |
| Nelson | February 1 | February 3 |
| Canterbury | December 16 | November 14 |
| Canterbury (South) | December 16 | September 22 |
| Westland | December 1 | December 1 |
| Otago | March 23 | March 24 |
| Southland | January 17 | April 22 |
| Chatham Islands | November 30 | December 1 |
The employer and employee can make a written agreement to transfer a public holiday to another day for business or personal reasons. Moreover, those required to work on public holidays must be compensated as follows:
| Compensation | |
|---|---|
| Public holiday that would otherwise be a working day | A full paid day-off in lieu + 150% of the employee's regular rate for the hours worked |
| Public holiday that would not otherwise be a working day | 150% of the employee's regular rate for the hours worked |
Annual Leave
Employees who have completed 12 months of continuous employment are entitled to at least 4 weeks of paid annual leave, the payment for which must be paid before the leave is taken.
Annual leave shall be taken within 12 months of its accrual, with the employee being entitled to take 2 weeks of their leave continuously. Payment in lieu of up to a week's annual leave is allowed on the employee's request, with the employer having the right to reject such request without any reason.
Sick Leave
Employees who have completed at least 6 months of continuous employment are generally entitled to 10 days of paid sick leave for every relevant 12-month period. This leave can be taken if the employee, their spouse or partner, or their dependent is sick or injured.
Any sick leave not taken can be carried over to any subsequent 12-month period of employment, provided that no more than 10 days of leave are carried over and no more than 20 days of leave are accumulated in any single year.
Maternity Leave
For the purpose of determining parental leave entitlements, primary carer shall refer to the mother giving birth to the child unless they have transferred all or part of their entitlements to their partner. In cases where birth parents are not available, e.g. adoption, any person taking permanent primary responsibility for the care, development and upbringing of a child under 6 years old shall be considered the primary carer.
See the Parental Leave Section for more information on this leave entitlement.
Paternity Leave
For the purpose of determining parental leave entitlements, a partner shall refer to the spouse/partner of the birth mother or nominated primary carer, regardless of sex.
See the Parental Leave Section for more information on this leave entitlement.
Parental Leave
Employees are entitled to different types parental leave benefits depending on whether they are primary carers or partners, and whether they meet the 6- or 12-month eligibility criteria. The 6- or 12-month eligibility criteria is met when the employee has been employed by the same employer for at least an average of 10 hours a week in the 6 or 12 months just before childbirth or adoption.
| Primary carer meets the 12-month eligibility criteria | Primary carer meets the 6-month eligibility criteria | Primary carer does not meet any eligibility criteria | |
|---|---|---|---|
| Partner meets the 12-month eligibility criteria | Primary carer entitled to 10 days special leave (if pregnant), 26 weeks primary carer leave and parental leave payment, and 52 weeks unpaid extended leave. The unpaid extended leave shall include the primary carer leave taken. |
Primary carer entitled to 10 days special leave (if pregnant), up to 26 weeks primary carer leave and 26 weeks of parental leave payment. |
Primary carer not entitled to any special leave, primary carer leave or extended leave. However, they may still apply for negotiated carer leave. Parental leave payment is only available if they meet the employee parental leave payment test. |
| Primary carer can transfer up to 26 weeks of parental leave payment to partner if partner is the primary carer for this time. | Primary carer can transfer up to 26 weeks of parental leave payment to partner if partner is the primary carer for this time. | If the primary carer meets the parental leave payment test, they can transfer up to 26 weeks parental leave payment if partner is the primary carer for this time. | |
| Partner may share remaining extended leave up to a total of 52 weeks, which shall include the primary carer leave taken. | Partner may share remaining extended leave up to a total of 52 weeks, which shall include the primary carer leave taken. | Partner may share remaining extended leave up to a total of 52 weeks. | |
| Partner entitled to 2 weeks additional unpaid partner's leave. | Partner entitled to 2 weeks additional unpaid partner's leave. | Partner entitled to 2 weeks additional unpaid partner's leave. | |
| Partner meets the 6-month eligibility criteria | Primary carer entitled to 10 days special leave (if pregnant), 26 weeks primary carer leave and parental leave payment, and 52 weeks unpaid extended leave. The unpaid extended leave shall include the primary carer leave taken. |
Primary carer entitled to 10 days special leave (if pregnant), 26 weeks primary carer leave and 26 weeks of parental leave payment. |
Primary carer not entitled to any special leave, primary carer leave or extended leave. However, they may still apply for negotiated carer leave. Parental leave payment is only available if they meet the employee parental leave payment test. |
| Primary carer can transfer up to 26 weeks of parental leave payment to partner if partner is the primary carer for this time. | Primary carer can transfer up to 26 weeks of parental leave payment to partner if partner is the primary carer for this time. | If the primary carer meets the parental leave payment test, they can transfer up to 26 weeks parental leave payment if partner is the primary carer for this time. | |
| Partner may share leave up to a total of 26 weeks. | Partner may share leave up to a total of 26 weeks. | Partner may share leave up to a total of 26 weeks. | |
| Partner entitled to 1 week unpaid partner's leave. | Partner entitled to 1 week unpaid partner's leave. | Partner entitled to 1 week unpaid partner's leave. | |
| Partner does not meet any eligibility criteria | Primary carer entitled to 10 days special leave (if pregnant), 26 weeks primary carer leave and parental leave payment, and 52 weeks unpaid extended leave. The unpaid extended leave shall include the primary carer leave taken. |
Primary carer entitled to 10 days special leave (if pregnant), 26 weeks primary carer leave and 26 weeks parental leave payment. |
Primary carer not entitled to any special leave, primary carer leave or extended leave. However, they may still apply for negotiated carer leave. Parental leave payment is only available if they meet the employee parental leave payment test. |
|
Primary carer can transfer up to 26 weeks parental leave payment only if partner meets the employee parental leave payment test and partner is the primary carer for this time. Partner can apply for negotiated carer leave if needs time off work to be the primary carer. |
Primary carer can transfer up to 26 weeks parental leave payment only if partner meets the employee parental leave payment test and partner is the primary carer for this time. Partner can apply for negotiated carer leave if needs time off work to be the primary carer. |
Primary carer can transfer up to 26 weeks parental leave payment only if partner meets the employee parental leave payment test and partner is the primary carer for this time. Partner can apply for negotiated carer leave if needs time off work to be the primary carer. |
|
| No leave available to partner. | No leave available to partner. | No leave available to partner. |
An employee meets the parental leave payment test if they have been employed for at least an average of 10 hours a week for any 26 of the 52 weeks just before childbirth or adoption. The employment does not have to be continuous or for the same employer for this purpose.
Employees shall apply for parental leave pay to the Inland Revenue before the earlier of 12 months since the child's arrival, or when they return to work.
Other Leave
Employees shall only be entitled to take Bereavement Leave and Family Violence Leave if they meet the same eligibility conditions that would entitle them to their sick leave.
| Leave Type | Paid/Unpaid | Duration of Leave | Conditions for Entitlement |
|---|---|---|---|
| Armed Force Service Leave | Unpaid | - | To be taken when the employee is doing training or service for the Armed Forces. |
| Bereavement Leave | Paid | 1–3 days per bereavement |
For employees with at least 6 months of continuous service. They get 3 days off for the death of immediate family members and a day off for the death of other people close with the employee. |
| Family Violence Leave | Paid | 10 days per year | This can be taken by those affected by family/domestic violence, or those whose children are affected. A proof of family violence may be requested by the employer. |
| General Election Voting Leave | Paid | - | Time-off granted to vote in general (parliamentary) elections on polling day. This only applies if the employee does not have a reasonable opportunity to vote before starting work. Otherwise, employees shall be allowed to leave work by 3:00 p.m. for the rest of the day. |
| Jury Service Leave | Unpaid | - | For employees who have been called up for jury service. Employees are paid a small attendance fee from the Ministry of Justice, and employers may top up this amount up to their normal pay. However, this top up is not mandatory. |
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