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Payroll and Benefits Guide New Zealand

Last updated: May 10, 2023

Currency
New Zealand Dollar (NZD)
Employer Taxes
Unknown
Payroll Frequency
Bi-Monthly / Monthly
Employee Costs
1.39%
Capital
Wellington
Date Format
dd/mm/yyyy
Fiscal Year
1 April - 31 March
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Contribution

Employer Employer Payroll Contributions
3.00%
KiwiSaver (pension)
1.53% of gross salary +KiwiSaver Contribution Accident Compensation Corporation applied on salary up to 139,384 NZD
4.00%
Total Employment Cost
Employee Employee Payroll Contributions
Optional Contribution
KiwiSaver (pension)
Employee Income Tax
10.5%
0.00 – 14,000 NZD Annually
17.5%
14,001 NZD – 48,000 NZD Annually
30.0%
48,001 NZD – 70,000 NZD Annually
33.0%
70,001 NZD – 180,000 NZD Annually
39.0%
180,000 NZD + Annually

Employer taxes

Highest
Lowest

Employee taxes

Highest
Lowest

Minimum Wage

The minimum wage in New Zealand is currently set at NZD 22.70 per hour.

A new wage threshold for migrant employees came into effect on 27 February 2023, to match the current national median wage of  NZD 27.76. This applies to those in the Accredited Employer Work Visa (AEWC), residence visa categories and green list occupations.

MINIMUM WAGE (PER MONTH)

Highest
Lowest

Payroll

Payroll Cycle

Payroll frequency is the employer’s choice; however, common frequencies are monthly or bi-weekly (every two weeks).

13th Salary

In New Zealand, there is no legal requirement for 13th-month payments.

Authority Payments

Authority Payment  Dates Methods

Inland Revenue Department

Monthly; 20th of the following month

eCheck (Local)

Working Hours

General

New Zealand does not have a minimum requirement. Common full-time hours are 7.5 hours to 8.0 hours per day. The number of hours worked by an employee, whether more or less than 40 hours a week, must be included in the employment contract.

Overtime

Payment for overtime must be stipulated in the employment contract, or it may be prescribed in company policy.

Leave

Annual Leave (vacation)

Employees are entitled to a paid annual leave entitlement of four weeks following a year of service. Unused leave will be compensated in the case of an employee’s termination.
Unused leave is carried over. Fixed-term workers contracted for less than 12 months receive 8% holiday pay instead of four weeks’ leave.

Public Holidays

Holidays falling on weekends are moved to the next business day as a day off in lieu.

Date Day Holiday Notes
1 Jan 2024 Monday New Year’s Day
2 Jan 2024 Tuesday Day after New Year’s Day
6 Feb 2024 Tuesday Waitangi Day
29 Mar 2024 Friday Good Friday
31 Mar 2024 Sunday Easter Sunday
1 Apr 2024 Monday Easter Monday
25 Apr 2024 Thursday ANZAC Day
3 Jun 2024 Monday Queen’s Birthday
28 Jun 2024 Friday Matariki
28 Oct 2024 Monday Labour Day
25 Dec 2024 Wednesday Christmas Day
26 Dec 2024 Thursday Boxing Day

* From 2022, New Zealand will recognize an additional public holiday – Matariki. This will be recognized on Friday 24 June 2022, and will be a statutory day off for employees. The calendar date for the holiday will shift each year to align with the Māori lunar calendar but will always be a Friday.

Sick Days

The New Zealand Parliament passed the Holidays Amendment Bill to increase the minimum employee sick leave entitlement from five to 10 days per annum, after six months of continuous employment with their employer.
Employees are only able to carry over 10 unused sick days each year to add to their annual entitlement up to a maximum of 20 days of current entitlement in any year. This applies to full-time, part-time, and fixed-term employees, where that fixed term is longer than six months.
A casual employee will also be entitled to sick leave where they have six months’ current continuous employment with the same employer, or they have worked for the employer for six months for an average of 10 hours per week, and at least one hour every week or 40 hours in every month. Sick leave is not to be pro-rated in any way.

Maternity Leave

In New Zealand, maternity leave is known as primary carer leave and is available to:
Female employees who are having a baby, their spouse or partner, and employees who are going to have the primary responsibility for the care, development, and upbringing of a child under six years permanently; this may for example be through adoption, but it does not include foster care or other temporary care basis. If the employee has a spouse or partner, they may choose who will be the primary carer.
Pregnant employees are entitled to 26 weeks of primary care leave and are paid their regular weekly salary up to a maximum of 712.17 NZD (from 1/7/2023 to 30/6/2024).
Primary carer leave starts on the due date, or the child’s birth if the child is born to the employee. In any other case, primary carer leave starts when the employee becomes the primary carer in respect of the child. The employee can start their primary carer leave up to six weeks (or earlier with the employer’s consent) before the baby’s due date or when the employee will become the child’s primary carer.

Paternity Leave

Paternity leave is known as partners leave in New Zealand and entitles partners to leave starting 21 days before the due date of the baby, or the date employee’s partner or spouse becomes the primary carer for a child under six years and ending 21 days after the baby is born. The exception is if the baby is discharged from a hospital more than 21 days after the birth, in which case the partner’s leave timeframe ends on the day the child is discharged) or the date the employee’s partner or spouse becomes the primary carer for the child.

Parental Leave

There is a range of Parental leave options in New Zealand for:

  • Special leave — unpaid leave for pregnancy-related appointments
  • Primary carer leave
  • Extended leave
  • Spouse or partner’s leave
  • Negotiated carer leave — if you’re not eligible for work leave

Other Leave

Depending on the collective agreement/employment contract terms, an employee may be allowed additional leave types, on approval between the employer and employee, for the following:

  • Special Leave-10 days of unpaid leave, which is given to employees for pregnancy-related appointments.
  • Extended Leave – This is extended unpaid leave given to parents and depends on the amount of time an employee has worked. An employee may be entitled to 52 extra weeks of leave if they have been employed for at least 12 months, and 26 weeks is given to a parent who has been employed for at least six months.
Vacation Days
Public Holidays
Highest
Lowest

PAID MATERNITY LEAVE (DAYS)

Highest
Lowest

Termination

Termination Process

The termination process varies according to the terms of the employment agreement and collective agreement in place and will depend upon the type of contract and reason for termination. An employer must provide sufficient notice before terminating the employment contract except for the case of gross misconduct.

Notice Period

An employee wishing to terminate their employment must provide sufficient notice. The amount of which will be outlined in the employment agreement and is typically of a duration between two and four weeks.
If there’s no specific clause in the employment agreement then ‘reasonable notice’ must be given. The length of ‘reasonable notice’ depends on a variety of factors, such as:

  • The reason for the redundancy
  • The employee’s length of service
  • The employee’s seniority and/or remuneration package
  • Custom, practice, and industry norms
  • The employee’s ability to find alternative employment
  • The amount of compensation being paid (if any)

Severance Pay

Generally, severance pay is not required unless it is a redundancy scenario.

Probation Period

The statutory (trial period) probation period in New Zealand begins on the first day at work and can be for up to 180 days. The actual timeframe will be stipulated in the employment contract and is only applicable to employees who have not worked for the employer before. Three to six months is a common period to use as probation.

Common Benefits

Mileage and travel allowances/reimbursements, phone allowance, wellness allowance, parking allowances.

VISA

VISA

A foreigner can apply for a work visa when there is:

  • A job offer from a New Zealand employer
  • A specific work-related purpose or event
  • A country that has a particular work scheme
  • A person has been studying in New Zealand

Some work visas can also lead to residence — that is, the right to live, study and work indefinitely.
To apply, there are required skills, experience, and qualifications needed for the New Zealand workforce.
Types of New Zealand work visas include:

  • Essential skills work Visa – Temporary work visa that allows employment from one-five years.
  • Work-to-residence Visas – Temporary visa options that allow employees who work full-time for two years to receive residence status.
  • Working holiday Visas – Allows for work and travel from 12 – 23 months. These visa schemes depend upon your country of origin.
  • Specific purpose Visa – Visa for employees meant to complete a particular task. These Visas typically last 3-12 months, with sometimes three-year visas being granted to multinational employees.
  • Relocating business Visa – Used if the company or employer is relocating to New Zealand.

In addition, with effect from 1st November 2021, all New Zealand employers who hire migrant employees will have to be accredited.

VAT

General

The standard rate of GST in New Zealand is 15.00%.

Stay up to date on payroll & employment law changes

Version History

April 10, 2022
The minimum wage in New Zealand is now set at 21.20 NZD per hour and 169.60 NZD a day, based on an 8-hour day.
March 25, 2021
Parents who suffer from a miscarriage or a stillbirth are now entitled to three days of paid leave.
July 24, 2021
Yearly sick leave increased from 5 to 10 days.
April 1, 2021
Minimum wage: raised to 20.00 NZD per hour
Income Tax: New bracket of 39% tax on income above NZD 180,000
More

Questions & Answers

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Joshua
Joshua
2 years ago

What options do I have regarding the length of a probation period?

Emily Kuhnert
Emily Kuhnert
2 years ago
Reply to  Joshua

Hi Joshua, thank you for your question. In New Zealand, employers with less than 20 employees from the date that the employment agreement is signed can request that new employees have a trial period of 90 days. This must be written and agreed upon within the employment contract and the contract must also outline the notice period upon termination. However, you as an employee do not necessarily have to agree to this, you have the option to negotiate for a shorter period of time if you so choose. Lastly, if you are part of a union, the probation period must be consistent with what is written in the collective bargaining agreement that applies to you.

Liron Dor
Liron Dor
2 years ago

Hey, is there any best practice with regard to Company Health Insurance costs in NZ?

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Payroll and Benefits Guide in New Zealand

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Payroll and Benefits Guide
in New Zealand

What’s covered in this guide:

  • Employer/employee contributions
  • Minimum wage
  • Working hours
  • Visa requirements

And more...

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All questions are answered by our in-house compliance department working in conjunction with our local in-country partner for this specific country

Public Holidays Calendar

New Zealand
Download:
CSV
PDF
ICS
Date Day Holiday Notes
1 Jan 2024 Monday New Year’s Day
2 Jan 2024 Tuesday Day after New Year’s Day
6 Feb 2024 Tuesday Waitangi Day
29 Mar 2024 Friday Good Friday
31 Mar 2024 Sunday Easter Sunday
1 Apr 2024 Monday Easter Monday
25 Apr 2024 Thursday ANZAC Day
3 Jun 2024 Monday Queen’s Birthday
28 Jun 2024 Friday Matariki
28 Oct 2024 Monday Labour Day
25 Dec 2024 Wednesday Christmas Day
26 Dec 2024 Thursday Boxing Day