Employer of Record in New Zealand

Hiring independent contractors has boomed in popularity because of the cost savings and flexibility they offer. It can be a great option if you require niche skills or short-term project support. Contractors allow businesses to access specialized skills quickly, without the time and cost of setting up a local entity.

However, it’s important to know the limits of this model: contractors are not a substitute for full-time employees. Relying on them for ongoing, long-term roles can create serious compliance risks, including employee misclassification, which can lead to fines, back taxes, and reputational damage.

Playroll’s contractor management solutions make it simple to compliantly engage, onboard, and pay contractors around the world. We provide clear visibility into agreements, streamline payments, and reduce compliance risks – so you can focus on getting the work done. And when you’re ready to take the next step, we can help seamlessly convert contractors into full-time employees through our global Employer of Record service.

Businesses can only operate smoothly in New Zealand if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in New Zealand below, to avoid any compliance issues.

Employment Contract Requirements

New Zealand places a strong emphasis on fair employment practices and has established a robust legal framework to govern the employer-employee relationship. When hiring in this territory, employers are expected to adhere to Employee Relations Act 2000. Key aspects of employment in New Zealand include:

• A written employment agreement
• Clearly defined renumeration and benefits
• Working hours and designated breaks
• KiwiSaver (employers need to inform employees about the KiwiSaver retirement savings scheme and their right to choose whether to participate)

Onboarding Process

We can help you get a new employee started in New Zealand quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations.

For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Probation Period in New Zealand

In New Zealand, both probationary periods and statutory trial periods are distinct employment practices. These are described in detail below:

• Statutory trial periods, applicable to employers with fewer than 20 employees, have a mandatory maximum duration of 90 days. During this period, termination can occur without specifying a reason.
• Probationary periods of between 3 to 6 months are common practice in New Zealand, although there is no statutory probation period.

New Zealand's approach to working hours and overtime is characterized by flexibility within a framework of basic protections. An employee in New Zealand typically works a standard 40-hour workweek. There are no specific age-based restrictions on maximum working hours in New Zealand's main employment legislation, though young workers (under 16) have some protections under health and safety regulations. Adult employees generally work 8 hours per day and 40 hours per week. A minimum meal interval of 30 minutes must be observed by employees who work more than 4 hours in a day, along with two 10-minute paid rest breaks. In typical working hours, Monday through Friday, the hours are 9:00 am to 5:00 pm.

Overtime arrangements are primarily governed by employment agreements. This gives both employers and employees the freedom to negotiate terms that work for their specific situations, but also means workers need to pay close attention to their contracts. New Zealand doesn't have mandatory legal requirements for overtime pay rates. When overtime pay is offered, common rates include:

• Time-and-a-half (1.5x regular hourly rate) for the first 3 overtime hours on weekdays
   
• Double time (2x regular hourly rate) for overtime beyond 3 hours
   
• Double time for weekend and public holiday work

Hiring in New Zealand means navigating local labor laws, mandatory employee benefits, payroll taxes, and strict employment regulations. These requirements aren’t always intuitive, especially if your team lacks in-country legal or HR expertise. An Employer of Record steps in as the legal employer for your hires, managing all compliance-related responsibilities. This includes issuing locally compliant contracts, registering employees with relevant authorities, processing payroll, and handling social security contributions and taxes in line with national laws.

By handing over these complexities to an EOR, your business avoids costly compliance errors and the time required to master local employment standards. You can focus on growing your team and operations while trusting that the legal and administrative foundation is solid. Whether you're making one strategic hire or building out an entire team, the EOR keeps you compliant, removes guesswork, and reduces the risk of legal or financial penalties, without requiring you to open a legal entity or maintain a local HR team.

Managing payroll in New Zealand requires careful attention to several key tax obligations, including the PAYE system for income tax withholding, mandatory KiwiSaver contributions, and ACC levies. Employers must register with the Inland Revenue Department, implement accurate time-tracking systems, and adhere to strict filing deadlines—typically within two working days after each payday, with tax payments due by the 20th of the following month.

The progressive tax rates ranging from 10.5% to 39%, combined with employer contributions of at least 3% to KiwiSaver and 1.67% to ACC, create a complex compliance landscape. Using payroll management software can help employers consolidate payroll data, automate calculations, ensure accurate deductions, and maintain the comprehensive records required for New Zealand's regulatory environment.

As of 1 April 2025, New Zealand's minimum wage rates have increased to NZ$23.50 per hour, or approximately NZ$4,012.67 per month for a typical 30-40 hour work week.

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Running payroll in New Zealand is complex, especially when you're hiring without a local entity. Local laws determine everything from tax withholdings and reporting deadlines to benefit contributions and currency requirements. Missteps can lead to fines, payment delays, or unhappy employees. An Employer of Record takes this burden off your plate by handling the full payroll process. Acting as the legal employer, the EOR ensures you remain compliant with all payroll-related obligations, while still allowing you to manage your team’s day-to-day work and performance.

Key Ways an EOR Supports Payroll in New Zealand:

• Compliance Assurance: Ensures payroll aligns with local tax laws, labor regulations, and statutory deadlines.
• Payroll Processing & Tax Management: Calculates salaries, applies correct tax withholdings, and submits required reports.
• Benefits & Social Security Contributions: Manages employer obligations for pensions, health insurance, and other legal entitlements.
• Contract Generation & HR Administration: Drafts compliant employment contracts and supports onboarding, terminations, and HR tasks.
• Currency Payments: Issues timely salary payments in local currency, ensuring employees are paid accurately and on time.

In New Zealand, work permits and visas are critical for employers looking to hire foreign workers. Employers must navigate different visa categories, such as the Accredited Employer Work Visa (AEWV) which has largely replaced the Essential Skills Work Visa, the Skilled Migrant Category Resident Visa for permanent residency, and the Working Holiday Visa for young travelers.

The application process involves meeting health and character requirements, providing a valid job offer, and proving that no suitable New Zealand workers are available for the position. Employers should also be aware of visa fees, processing times, and the need for work permit renewals to ensure ongoing compliance. As of 2025, most AEWV applications cost NZD1540 (approximately US$913) and typically take 4-8 weeks to process, depending on documentation and the employer's accreditation status.

Mandatory Leave Entitlement in New Zealand

The annual leave entitlement in New Zealand is 4 weeks for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In New Zealand

Public holidays in New Zealand are widely recognized, with potential variations in dates each year. While these holidays are observed nationwide, their occurrence might differ annually, and in the event of a holiday falling on a Sunday, the succeeding Monday is typically designated as the day off. These public holidays include:

Paid Time Off in New Zealand

Employees are entitled to four weeks of paid annual leave, a benefit accessible once they complete their initial year of service with the employer. When it comes to the applicability of annual leave, the following details are noteworthy:

• Upon termination, unused leave is compensated.
• Upon the end of the year, unused leave can be carried over.
• For fixed-term workers engaged for less than 12 months, an alternative arrangement exists where they receive 8% holiday pay in lieu of the standard four weeks of leave.

Maternity Leave In New Zealand

In New Zealand, maternity leave, also known as primary carer leave, lasts for 26 weeks and is funded by the government. It is a statutory requirement and can start up to 6 weeks before the expected due date. If medical reasons require an earlier start, the mother is still entitled to a full 20 weeks after childbirth. Additional details about maternity leave are as follows:

• Pregnant employees have the right to take up to 10 days of unpaid leave for pregnancy-related appointments.
• The entitlements for primary carer leave also extend to employees assuming the role of primary carer for an adopted child under 6 years of age.

Paternity Leave In New Zealand

Primary Carer leave is also applicable where their spouse or partner has given birth, but the employee will take primary responsibility for the care of the child.

• One week of unpaid leave if theyve worked for you for six months for at least an average of 10 hours a week.
• Two weeks of unpaid leave if theyve worked for you for 12 months for at least an average of 10 hours a week.

Sick Leave In New Zealand

Employees in New Zealand benefit from a sick leave entitlement, as mandated by the Holidays Amendment Bill. The leave is not pro-rated, ensuring that employees receive the full entitlement regardless of their employment status. Sick Leave is applied as follows:

• After six months of continuous employment, individuals are entitled to a minimum of 10 days of sick leave annually.
• Casual employees, with six months of continuous employment or an average of 10 hours per week, are also eligible for sick leave.
• Up to 10 unused sick days can be carried over each year, accumulating to a maximum of 20 days in total

Parental Leave In New Zealand

Parents in New Zealand have the option of taking extended leave, which can be shared between both partners and even be taken concurrently. Parental leave entitlements are subject to the following details:

• Parental leave duration, up to 52 weeks, depends on the service length of both parents, provided they have each been employed by their current employer for more than 12 months. This is paid by a state fund. Pay is the greater of ordinary weekly pay and average weekly earnings, up to a maximum gross amount of 788.66 NZD per week.
• This provision is in addition to primary carer and partners leave.
• Extended leave is unpaid.

Special Leave

10 days of unpaid leave, which is given to employees for pregnancy-related appointments.

Bereavement Leave

This considers the relationship to the deceased, responsibilities for arrangements, and cultural practices, offering three days of paid leave for the loss of a close family member.

Administering employee benefits in New Zealand requires more than just offering a standard package. Local labor laws often mandate specific entitlements, from health insurance to paid leave, and the rules can change without warning. New Zealand also has unique standards for what an attractive, competitive benefits package looks like. For businesses without in-country expertise, meeting these obligations and expectations can quickly become risky and expensive. An Employer of Record acts as your compliance partner, ensuring all benefits are provided according to the latest legal requirements and without administrative strain on your internal team.

Beyond compliance, an EOR brings clarity and consistency to a process that’s often complex and fragmented. They handle enrollments, ensure accurate employer contributions, manage communications with local providers, and keep everything properly documented. This means employees get what they’re entitled to, and you avoid the headache of navigating benefits systems in a foreign market. Whether you're hiring one person or building a larger team, an EOR provides a clear, dependable structure that lets you offer competitive benefits without taking on unnecessary risk or workload.

Termination Process in New Zealand

In New Zealand, the termination process depends on factors like the contract type, grounds for termination, and agreements in place, including employment and collective agreements.

• Gross misconduct
• Performance deficiencies
• Incompatibility
• Medical Issues

Notice Period in New Zealand

In New Zealand, employers usually follow notice periods of 2 to 4 weeks as stated in employment contracts. When no notice period is specified, a reasonable one is determined based on factors like service length and industry norms.

Severance in New Zealand

Severance payout is only obligatory if an agreement between the employer and employee has been reached. Consequently, an employee's final pay encompasses compensation solely for hours worked and any accrued and unused annual leave days, unless otherwise stipulated through a mutual severance arrangement.