hire in New Zealand

Horizons provides compliance solutions to ensure your business in New Zealand operates in line with New Zealand labor laws and tax regulations. Businesses benefit from hiring in, investing in, or job outsourcing to, New Zealand in a range of industries, from customer service, to accounting services, to software development.

We also process monthly payroll, and, as an New Zealand Employer of Record, absorb all local employer liabilities. Partnering with our New Zealand PEO is the quickest and most cost-effective way to enter the New Zealand market.

Facts & Stats

PEO Platform Hire in New Zealand, and pay employees through our platform or app.	PEO Cost Our New Zealand PEO solution is the most affordable on the market.	Time-to-hire Fast onboarding in New Zealand, hire in as little as 24 hours.
Contracts We draft labor contracts compliant with New Zealand labor law.	Local Benefits We administer all mandatory benefits and contributions in New Zealand.	180+ Countries It doesn’t stop with New Zealand — we are an international PEO

stay compliant with New Zealand labor laws

Employment Laws

Employment contracts in New Zealand

It is standard practice to have a written employment agreement with workers in New Zealand. There are two types of employment agreements that cover all employees: individual employment agreements and collective agreements.

An employer can designate a trial work period of up to 90 days. If an employee has not previously worked for the employer, they can agree to this trial. During a trial period, an employer can terminate an employee’s contract without a specific reason. Furthermore, an employee cannot file for unfair dismissal, unless the employer has violated the law. Note trial periods, may only be used by employers with less than 20 employees.

For employers with a bigger workforce (20 or more employees), probationary periods (distinct from trial periods) can be used. The existence of such a period must also be spelled out in employment contracts, and (unlike trial periods), the employer can file for unfair/unjustified dismissal.

Under New Zealand’s labor laws, there are certain mandatory clauses that must be included in all employment contracts.

Horizons’ New Zealand PEO provides clients with an employment contract template that ensures full compliance with workplace regulations.

Fixed-term

Probationary period	90 days, unless otherwise stated in writing
Termination notice period	4 weeks (standard)
Severance	Only if included in the employment agreement
Important note	Fixed-term contracts must be ‘genuinely justified’. This contract type is not standard for PEO services.

Indefinite

Probationary period	90 days, unless otherwise stated in writing
Termination notice period	4 weeks (standard)
Severance	Only if included in the employment agreement

Working hours

The standard work week in New Zealand is Monday to Friday. An eight-hour work day is typical.

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Holidays in New Zealand

Holiday Schedule in New Zealand [2023]

Workers generally do not work on the following public holidays in New Zealand

Date	Holiday name
1 Jan Sunday	New Year’s Day
2 Jan Monday	Day after New Year’s Day
3 Jan Tuesday	Day off for New Year’s Day
6 Feb Monday	Waitangi Day
7 Apr Friday	Good Friday
10 Apr Monday	Easter Monday
25 Apr Tuesday	ANZAC Day
5 Jun Monday	King’s Birthday
14 Jul Friday	Matariki
23 Oct Monday	Labour Day
25 Dec Monday	Christmas Day
26 Dec Tuesday	Boxing Day

Tax and social security

New Zealand has specific rules regarding payroll and taxation that depend on whether your business employs local or foreign nationals. The country also has a progressive income tax that charges a higher rate for the more income a person makes, capped at 30%.

New Zealand has a comprehensive social security system that provides benefits for sickness, unemployment, disability, and retirement. It is largely non-contributory and is funded by general taxation. Most benefits are available to all residents, regardless of their employment history. However, the Accident Compensation Corporation requires all employees and self-employed residents to provide contributions. This fund offers benefits to workers injured on the job.

Most social security benefits have strict residential requirements. State pension funds are paid to citizens and permanent residents 65 and older. These people need to have lived in New Zealand for at least 10 years, five of which must have been after the age of 50.

Citizens and permanent residents who have lived in the country for at least two years can potentially receive unemployment benefits.

For foreign companies conducting business in New Zealand, it is vital to have a firm understanding of the following:

Individual income tax
Social security costs
Payroll tax
Withholding tax
Business tax
Sales tax

Health insurance

In New Zealand, individuals may be eligible for subsidized healthcare if they are:

A New Zealand citizen or permanent resident (exceptions apply if you are an Australian citizen or permanent resident – check the Ministry of Health website)
A work visa holder who is allowed to work in New Zealand for two or more years
The holder of a work visa that allows them to work in New Zealand for two or more years – when combined with the time spent in New Zealand before obtaining their current work visa. As an example, a person qualifies if they had a visa that allowed them to be in New Zealand for one year, and they now have a work visa that allows them to stay another year.
An interim visa holder who was eligible immediately before obtaining their interim visa

The government does not fund private healthcare services, such as private hospitals or clinics. Individuals and in some cases, employers, need to pay for these services. There are two main types of private health insurance policies:

‘Comprehensive cover’ policies that cover all medical costs, including GP visits and prescriptions
Policies that provide cover for combinations of specialist care and elective (non-urgent) surgery

Annual leave

Under New Zealand law, almost all employees are entitled to a minimum of four week’s paid annual leave, for each year after one year’s company service. However, many employers allow workers to use their annual leave before they have reached one year’s company service. This is called ‘leave in advance’. Employment agreements must establish the amount of annual leave that employees are entitled to receive.

To be eligible for the minimum amount of annual leave, workers must work regular hours in a full-time or part-time position. If the employee does not have set hours, the employer and employee can reach an agreement on the set amount of annual leave. Workers who are on short fixed-term contracts may be paid extra, instead of being given leave. However, this must be agreed upon and stated in the employment contract. In these situations, the employee must be paid at least 8% more.

Workers continue to accrue annual leave while they are on parental leave. When they return to work after parental leave, they are still permitted to take four week’s annual leave per year.

If an employee does not take their accrued leave within a year, leave can be carried over to another year. Employers can establish rules over how much time can be carried over. In some cases, employees can also cash in a portion of their unused leave.

Sick leave

Most people in New Zealand receive a minimum of five day’s sick leave each year. When using sick leave, an employee will typically be paid at their normal rate. Employees are able to carry over some of their unpaid sick leave to the following year.

Parental leave

Eligible employees can take parental leave to care for a child. During this time, they may be able to receive payments from the government. Parental leave can include special leave before a baby is born, or negotiated leave to care for a child after they are born. Preterm baby payments are made when a baby is born before the mother’s due date.

Paid parental leave is a government-funded payment an employee receives when they stop working to care for a child under six years of age. The most that an employee can receive each week is $585.80, before taxes. Employees receive 26 week’s paid parental leave when a child is born.

It may be possible for spouses to share parental leave when one of them can transfer a portion of unpaid parental leave to their spouse. This amount comes from the other parent’s 52 week’s unpaid parental leave.

If a parent is the primary caregiver and is eligible for parental leave payments, they may be able to transfer payments to their spouse. The amount they can transfer depends on parental leave requirements and how long their spouse has been employed.

Termination and severance

Severance or redundancy pay should be addressed in the employment agreement. There is not a severance or redundancy pay scheme that is defined under New Zealand law.

Employees are generally provided with notice before termination. However, a specific notice period is not mandated. It is possible for there to be different notice periods for permanent work and trial periods. Many employment contracts stipulate a four week notice of dismissal clause. For trial periods, two week’s notice is customary.

Navigating employee terminations and handling severance packages can be complicated for companies expanding overseas for the first time. Horizons’ New Zealand PEO can mitigate risk for foreign companies and provide guidance through this process.

If the employee is over 45 and has worked for the employer for at least two years, an extra week is added to the notice period
Employers can opt to pay in-lieu of the notice period
Employment contracts may require a longer notice period. In some cases, this notice period is as long as a year

Employees are eligible to file an unfair dismissal application if they are covered by the national workplace relations system and have been employed for the minimum employment period. If the employer is a small business with less than 15 employees, the minimum employment period is one year. Otherwise, the minimum employment period is six months. Employees must be covered under an enterprise agreement or award. Additionally, the employee’s annual income must be beneath the income threshold.

If the application is successful, the employee may be reinstated. If reinstatement is not appropriate, compensation of up to six month’s pay may be ordered.

Severance payments may occur if an employer experiences redundancy. If an employer has decided that it no longer wants an employee to perform a particular job and terminates employment, the job becomes redundant. When redundancy occurs, severance payments may be required. Redundancy occurs when:

New technology replaces the need for someone to manually perform a job
A merger or takeover means the job is no longer necessary
The business reorganizes and the job is no longer necessary
The employer becomes bankrupt or insolvent
A downturn in business results in staff reduction

The amount of severance depends on how long the employee has worked continuously for the employer. Severance pay is not mandatory if:

The employer has less than 15 employees
The employee has worked for less than one year continuously
The employee was an apprentice or casual employee
The employee is terminated due to serious misconduct
If the employee is employed for a specified period of time and termination ends at this time
If the employee works under an enterprise agreement or industry-specific redundancy scheme, which is detailed or incorporated in the award

Navigating employee terminations and handling severance packages can be complicated for companies expanding overseas for the first time. Horizons’ Australia PEO can mitigate risk for foreign companies and provide guidance through this process.

hassle-free New Zealand compensation & benefits

Compensation & Benefits

New Zealand compensation laws

There are three different wage tiers in New Zealand that encompass adult, starting-out, and training. All employees aged 16 and over qualify for the adult minimum wage – which is NZ $17.70 per hour, before tax. New Zealand’s starting-out wage is NZ $13.20 an hour, before tax. The starting-out wage covers:

16 and 17-year-olds that have worked for one employer for less than than six months
18 and 19-year-olds who meet designated specifications
16 to 19-year-olds with an employment agreement that requires 40 credits of industry training per year

For employees classified as training, the minimum wage is NZ $13.20 an hour. Training workers need to be 20 years or older, and have an employment contract that states at least 60 credits of industry training per year.

Minimum Wage Country Comparison Chart	(Per month in USD)
Switzerland (Geneva)	$4,000
New Zealand	$2,323
China	$308
Algeria	$156
Uzbekistan	$22

Guaranteed benefits in New Zealand

New Zealand employees are entitled to at least four week’s annual leave per year. They have the option of exchanging one week’s annual leave for cash.

There are 11 public holidays in New Zealand each year. Employees are entitled to a day off on each of these days. When assessing a benefit management plan, employers need to be mindful they provide employees with the statutory minimum of leave entitlements.

Employees are also entitled to parental leave benefits. For employees with children, they’re able to use their sick leave – known as domestic leave – to care for their sick children or another dependent family member.

New Zealand benefit management

Businesses seeking to expand into New Zealand need to budget for supplemental benefits. These benefits can influence an employee to accept a position and to remain with an employer. As an example, employers can elect to offer their employees private healthcare subsidiaries as an additional benefit.

Horizons New Zealand PEO can provide expert guidance to help simplify the process of expanding into the country.

Benefits and compensation restrictions

Whilst collective bargaining agreements (CBAs) are not overly common in New Zealand, employers should confirm whether their employees are covered by one. If this is the case, then employers will need to meet the terms of the CBA, as opposed to statutory minimums.

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FAQs

What is the difference between a New Zealand PEO and a New Zealand EOR?

A New Zealand PEO and a New Zealand EOR are two types of companies which specialize in providing human resources services to businesses in New Zealand.

The main difference between a New Zealand PEO and a New Zealand EOR is in the scope of their services.

New Zealand PEOs provide a full range of HR services, including payroll, benefits administration, and employee recruiting—all under one roof as a co-employer. Engaging a New Zealand PEO is essentially outsourcing your HR duties in New Zealand.

New Zealand EORs actually take over as the legal employer of your employees based abroad. New Zealand EORs become responsible for labor compliance for your employees in New Zealand.

At Horizons, we offer both PEO and EOR services in New Zealand. Get in touch now and let us know what service you are seeking.

Can a PEO in New Zealand hire both local and foreign nationals to work in New Zealand?

A PEO in New Zealand can feasibly hire both local and foreign nationals to work in New Zealand.

However, the ability of Horizons to sponsor your foreign national employee in New Zealand may be limited due to visa quotas practiced in many countries.

Contact us with your requirements and our Global Mobility team with review the case and get back to you within 2 business days.

How long does Horizons' New Zealand PEO service take to hire an employee?

In most cases, Horizons’ New Zealand PEO can hire & onboard your employee within 24 hours. The actual start date of the employee will depend on their notice period obligation to their previous employer as well as any relevant hiring rules in New Zealand.

Is it possible to get a work visa in New Zealand?

It is possible to get a work visa in New Zealand. Horizons’ Global Mobility team is a dedicated team of work visa experts. They assess the details of each case to determine feasibility and costs before Horizons applies for the work visa on behalf of your employee. If the Global Mobility team determines that your case is feasible, the process is smooth and transparent. Visa spots in New Zealand are limited, however—get started today to secure your employees’ visa spot.