New Zealand Employer of Record

If a lack of speed or local expertise are among your top concerns when expanding to or employing workers in New Zealand, an employer of record may be the best option for achieving your global growth objectives.

An employer of record, sometimes known as an international PEO, enables you to quickly hire and onboard workers in New Zealand ―often in as little as two weeks―without having to take on the cost and risk of establishing a local entity.

Learn about the hiring, employment, payroll and benefits requirements for workers in New Zealand and how our employer of record service, EOR, and local HR experts can help you manage your international employment needs. 

The main legislation governing labor and employment is the Employment Relations Act 2000, which combines a market model for employment with greater obligations on the parties to the employment relationship to demonstrate “good faith” behaviors.

Under the Employment Relations Act 2000, there are two categories of employment agreements, individual and collective. Whether individual or collective, all agreements must contain the following provisions:

As you look to hire employees in New Zealand, here are some standard regulations you’ll need to know to create a compliant contract, as well as how an employer of record and PEO can provide support for your unique HR needs.

The workweek is generally defined as 40 hours and five days in length unless otherwise negotiated and included in the employment agreement.

The Employment Relations Act that took effect in 2015 says an employee is entitled to rest and meal breaks that: 

 Compensation

As you consider the appropriate salary to offer new employees, keep in mind:  

As your employer of record in New Zealand, we can provide you with resources and insights about employee compensation, so you are better equipped to make a competitive employment offer.

Bonuses are agreed upon between the employer and the employee and taxed as normal income.

Employer with less than 20 employees may include a clause in any employment agreement stating that the employee is subject to a trial period no longer than 90 days.

Under the Employment Relations Act 2000, there is no “at-will” employment in New Zealand, and an employer requires cause to terminate an employee except during a trial period.

Either employer or employee may terminate the employment relationship in accordance with the terms of the employment agreement by giving the required notice, although the employer may only give notice for just cause and after following a fair process.

Unless covered in the individual or collective employment agreement, an employer is under no obligation to pay an employee severance beyond payment of all wages due at termination and compensation for any unused vacation. 

When negotiating terms of an employment contract with a candidate in New Zealand, here are some of the statutory benefits and paid leave requirements to keep in mind, as well as how an employer of record can support your company’s benefits strategy.

Employees who are having a baby or are going to take the permanent primary responsibility for a child under 6 years are entitled to parental leave. Parental leave can be taken by one parent or divided between the two.

Employees who have worked for at least an average of 10 hours a week during the 12 months just before the expected birth of the child or the date they will assume responsibility for care of the child are entitled to: 

The amount of unpaid leave is halved for employees who have worked for at least an average 10 hours a week during the six months just before the expected birth of the child or the date they will assume responsibility for care of the child.

Employees who intend to take parental leave must give their employer at least three months’ written notice before the due date. Up to six weeks of the leave entitlement may be taken before the expected date of birth or adoption.

Pregnant employees can also take 10 days of unpaid special leave for issues related to pregnancy.

All employees are entitled to at least four weeks’ paid vacation a year. Employees get their annual holiday entitlements on their first and subsequent anniversaries after starting work. This is meant to be paid leave and can only be converted into cash in limited circumstances.

Annual vacation can be taken at any time agreed between the employer and the employee. However, employees must be allowed to take at least two of the four weeks’ vacation continuously if they wish to do so.

Casual and fixed-term employees of under one year’s service can agree to receive annual leave pay as they work, calculated and paid as 8% of wages, without the requirement that the entitlement be taken as actual leave.

Employers can require employees to take annual leave during a shutdown period provided they give at least 14 days’ notice. If a shutdown period includes public holidays, employees must be paid for those days if they would normally be working days.

Employees are entitled to receive their pay for annual vacations before the vacation commences, unless the employer and employee agree that the normal pay cycle will continue undisturbed by the time off work.

There are 11 public holidays in New Zealand: 

Note: New Zealand has declared Monday, Sept. 26, 2022, a national holiday for the funeral of Queen Elizabeth II.

If they fall on a Saturday or Sunday, Waitangi Day, ANZAC Day, Christmas, Boxing Day, New Year’s Day and Jan. 2 will be observed on the following Monday or the following work day.

The Holidays Act 2003 provides employees with a minimum of five days paid sick leave a year after the first six months of continuous employment and an additional five days paid sick leave after each subsequent 12-month period.

The sick leave allowance can be increased by agreement between the employer and the employee. At any time, the employer and the employee can agree to the employee going into sick leave debt and any debt can be deducted from the following 12-month period.

Unused sick leave is accumulated to a maximum of 20 days, which can be extended by agreement. There is no legal requirement that unused sick leave be paid out on termination of employment.

If an employee receives Accident Compensation Corporation (workers’ compensation) payments for more than five days, the employer and the employee can agree to top up the ACC payment from 80% to 100% by reducing the employee’s sick leave by one day for each five days’ ACC leave.

New Zealand doesn’t have an official retirement age, but 65 is the age at which most superannuation (retirement) plans begin to pay benefits, including the government-funded NZ Superannuation.

New Zealand has an opt-out work-based savings initiative known as KiwiSaver. Employee members contribute at least 3% of their pay, which employers must match up to that 3%. A total remuneration package may be agreed upon at the commencement of employment that includes employer KiwiSaver contributions. On hiring, employers must report employee information to Inland Revenue, which automatically enrolls the employee in a default KiwiSaver scheme. Employees must opt-out if they do not wish to participate. If an employee opts out of KiwiSaver, then the employer does not have to contribute.

In addition to healthcare benefits, employees in New Zealand are entitled to pension, which is funded by government tax revenues, as well as workers compensation, which is covered through mandated employer insurance.

Employer social costs will cover a large portion of employee benefits in New Zealand, but we can consult with you about supplemental coverage options, such as additional pension contributions or life insurance if needed.

Updated: December 15, 2023 

We write and validate all local employment contracts, streamlining the onboarding process for you and your New Zealand employees—all you have to do is provide relevant information and review and approve the employment agreement. As your employer of record in New Zealand, we will:   

The entire onboarding process for the employee is often completed in as little as two weeks. 

With over a decade of service, we are the longest-serving employer of record and PEO provider in the international market. Organizations around the world rely on EOR, our employer of record solution, to expand and hire in 170+ countries around the world, quickly and compliantly.

We’ve seen just about every global employment circumstance imaginable—and with our extensive knowledge of local law and culture, we know what it takes to get employment right in New Zealand. We provide written contracts in the local language, salaries in the local currency and HR support in your employees’ time zone.

Additionally, as a global payroll provider we support payroll administration—including payments, filings and other calculations— all around the world and can accommodate the payroll outsourcing needs of any size organization.

Whether you’re looking to hire as part of a strategic expansion or to meet specific talent needs, our global solutions advisors can walk you through your international hiring options so you can make the right choice for your organization. Contact us today.