Hire Employees in New Zealand

Your own entity is a New Zealand company, registrable online in a day. The practical obstacle for a foreign business is the requirement for at least one director resident in New Zealand or Australia.

An Employer of Record inverts the sequence: the New Zealand entity signs the written agreement before work begins, enrols the employee in KiwiSaver, files payday returns within two working days and applies the correct Holidays Act calculation, while you direct the day-to-day work.

Because formation is easy, the EOR case here rests on employment risk and on the Holidays Act rather than on administrative friction.

New Zealand is simple to incorporate in, a company can be registered online in a day, so the EOR case rests on employment risk rather than formation friction. The company must have at least one director resident in New Zealand or Australia, which is the practical obstacle for a foreign business without local presence.

Mandatory employer cost is modest at roughly 5–8%: KiwiSaver at 3.5% plus ESCT on that contribution, and the ACC Work Levy, which is industry-rated. KiwiSaver rose from 3% to 3.5% on 1 April 2026 and is legislated to reach 4% in 2028, so multi-year models need the escalation built in. The scheme also now covers 16 and 17 year olds.

Two features make New Zealand more demanding than its low contribution rate suggests. The Holidays Act 2003 uses four different calculation methods, ordinary weekly pay, average weekly earnings, relevant daily pay and average daily pay, and applying the wrong one is so common that large employers have run multi-year remediation programmes. The other is the 90-day trial period, which is only valid for employers with fewer than twenty staff and only if drafted and signed correctly before work begins.

The contractor position tightened materially. The Employment Relations Amendment Act 2026 introduced a five-part gateway test from 21 February 2026; an arrangement failing it is an employment relationship regardless of the contract wording.

Break-even rule of thumb: EOR fees begin to exceed the running cost of a small New Zealand entity somewhere between 15 and 20 employees. Model both before committing, see EOR vs Entity for the full comparison, and plan any later migration so employees keep seniority.

Mandatory employer cost is roughly 5–8%: KiwiSaver at 3.5% plus ESCT on that contribution, and the ACC Work Levy, which is industry-rated and varies substantially by activity.

KiwiSaver rose from 3% to 3.5% on 1 April 2026 and is legislated to reach 4% in 2028, so multi-year models need the escalation built in. The scheme also now covers 16 and 17 year olds, which widens the population for employers hiring at entry level.

ESCT is deducted from the employer contribution at a rate based on the employee’s total remuneration, so the effective employer cost of KiwiSaver varies by salary band even though the headline rate does not.

The employer contribution changed on 1 April 2026 and guidance written before then is now wrong. The compulsory KiwiSaver employer rate rose from 3% to 3.5% of gross pay, with a further rise to 4% legislated for 1 April 2028. Two related changes landed the same day: employers must now contribute for 16- and 17-year-olds, where the obligation previously ran only from 18 to 65; and employees can apply to Inland Revenue for a temporary reduction back to 3% for between 92 days and 12 months, which the employer may choose to match. That last point means a compliant payroll can carry two different employer rates at once, and must track reduction end dates because IR notifies the employer when someone reverts. Note that ESCT is deducted from the employer contribution rather than added to it, so the employer’s cost is 3.5% while less than that reaches the employee’s account.

Four representative profiles, costed with the 2026 contribution rates above. Salaries are illustrative market midpoints, not GX operating data, use them to see how the on-cost percentage behaves as pay rises, not as a salary benchmark for a specific role. For real market data on your roles, ask for a costing.

Watch the on-cost percentage rather than the absolute figure. 2 of the charges here are capped and 5 are not, so the effective employer rate falls as salary rises, but it flattens rather than disappearing. The senior rows below show where it settles.

Four representative profiles costed on 2026 statutory rates. Salaries are illustrative market midpoints, not GX operating data.

Payroll runs fortnightly or monthly in New Zealand dollars. Payday filing is due within two working days of each pay run, not monthly, a faster cadence than most markets and one that needs automating from the first payroll.

PAYE is withheld against the employee’s tax code, and the code drives the rate rather than the employer assessing it. An incorrect code produces systematic over- or under-withholding that surfaces at year end.

The Holidays Act 2003 uses four different calculation methods, ordinary weekly pay, average weekly earnings, relevant daily pay and average daily pay, and applying the wrong one is common enough that large employers have run multi-year remediation programmes. Variable hours and commission make it materially harder.

Thresholds and ceilings are uprated periodically, so a figure correct in January may not hold later in the year. Where a row below is flagged, published sources disagreed and the conflict is recorded rather than resolved.

Thresholds move on a local cycle that does not always fall in January, so a figure correct at the start of the year may not hold through it. Where a row below carries a flag, published sources disagreed and the conflict is recorded rather than resolved, there are 2 such rows on this page.

The sections that follow set out contracts and probation, working time, leave, termination and immigration in that order. Where an entitlement comes from a collective agreement rather than statute it is marked as such, because that distinction determines whether it is negotiable.

A written employment agreement must be signed before work begins, and employing without one is a breach in itself. The agreement must contain specified mandatory terms.

The 90-day trial period allows dismissal without a personal grievance for unjustified dismissal, but it is only available to employers with fewer than twenty employees, only where the clause was signed before work started, and only if strictly complied with. Any defect makes it unusable.

For employers above that threshold, a probationary period is available but does not remove the requirement for a fair process, it structures the assessment rather than suspending the protections.

There is no statutory maximum working week and no statutory overtime premium. Hours and any overtime rates are set in the employment agreement. Employees are entitled to rest and meal breaks, and to a written agreement on how hours will be worked.

Overtime is where payroll disputes usually start. Record hours from day one even where the role is salaried and the expectation is that overtime will not arise, reconstructing records after a complaint is far harder than keeping them.

Overtime is where payroll disputes usually begin, and the burden of proving hours worked generally sits with the employer. Record hours from the first day even for salaried roles where overtime is not expected, reconstructing a record after a complaint is considerably harder than keeping one.

Public holidays sit on top of the annual leave entitlement. Where a holiday falls at a weekend, practice varies, some markets move it, some grant a substitute day and some do neither, so check the position before assuming a day in lieu.

The 11 dates below are the statutory position. Employers in many markets grant more by policy or collective agreement, and sector agreements sometimes add local or patronal days that do not appear in a national list.

New Zealand observes 11 paid public holidays in 2026. Dates that fall at a weekend and any substitution rules are set out below; entitlement is separate from annual leave.

Sick leave: 10 days a year after 6 months of continuous employment. Paid at Relevant Daily Pay or Average Daily Pay. Up to 20 days may be carried over. Parental leave: 26 weeks paid, plus extended unpaid leave to 52 weeks. Government-funded parental leave payments, not employer-paid. Bereavement leave: 3 days for close family, 1 day otherwise. Paid at Relevant Daily Pay. Family violence leave: 10 days a year. Paid, and a statutory entitlement since 2019.

Public holidays: 12 a year, paid if the day would otherwise be a working day. Time and a half plus an alternative day if worked.

New Zealand requires both a substantively justified reason and a fair process. The test is what a fair and reasonable employer could have done in the circumstances, which gives some latitude on outcome but very little on procedure.

The expected process is specific: raise the concern, provide the supporting information, give a genuine opportunity to respond with representation, keep an open mind, and only then decide. A personal grievance must be raised within 90 days, and remedies include reinstatement, lost wages and compensation for hurt and humiliation, the last of which is awarded routinely rather than exceptionally.

There is no statutory redundancy compensation in New Zealand. Entitlement arises only from the employment agreement, so what the agreement says about redundancy is what applies. Notice is likewise contractual, with the agreement required to specify it.

The 90-day trial period, where validly used, allows dismissal without a personal grievance for unjustified dismissal, but only for employers with fewer than twenty employees, only where the clause was signed before work started, and only if strictly complied with.

A migrant worker generally needs an Accredited Employer Work Visa, which requires the employer to hold accreditation first, a separate application with its own timeline.

Allow two to three months in total, including accreditation, job check and the visa itself. The role must be advertised unless it appears on the Green List, which covers roles in genuine shortage and offers streamlined or residence-track pathways.

Australian citizens and permanent residents work freely under the Trans-Tasman arrangement, which is worth checking before assuming a visa process is needed at all.

New Zealand requires both a substantively justified reason and a fair process, and the test is what a fair and reasonable employer could have done. That gives latitude on outcome but very little on procedure: raise the concern, provide the supporting information, give a genuine opportunity to respond with representation, keep an open mind, then decide.

A personal grievance must be raised within 90 days, and remedies include reinstatement, lost wages and compensation for hurt and humiliation, the last awarded routinely rather than exceptionally.

Practical controls: sign the agreement before work starts, check whether the 90-day trial is even available given headcount, identify the correct Holidays Act calculation for the working pattern, and automate payday filing to the two-day deadline.

Work backwards from the start date. For someone with the right to work, a week is realistic. An Accredited Employer Work Visa requires the employer to hold accreditation first, which itself takes time, so allow two to three months in total for a migrant hire.

Confirm before making an offer: that a written employment agreement will be signed before work begins, since employing without one is a breach in itself; whether a 90-day trial period is available, which depends on headcount being under twenty; and which Holidays Act calculation applies to the working pattern.

Payday filing is due within two working days of each pay run, not monthly. There is no separate employer registration for PAYE beyond IRD enrolment, but the filing cadence is faster than most markets and needs automating from the first payroll.