Global Hirings

September 1, 2023

3 mins

Employment Essentials in New Zealand

Ranked as the 52nd largest economy globally, New Zealand boasts a highly dynamic start-up community that experienced a notable surge of 30% between 2020 and 2021. This impressive growth in the information sector has attracted a substantial influx of investors to the country. Moreover, New Zealand's economy is bolstered by a significant service industry, accounting for 63% of its overall economic activity.

Employing in New Zealand

For employers considering expansion in New Zealand, it is essential to have a solid understanding of the country's employment laws, benefits, payroll, and tax regulations. To facilitate the process of onboarding talents from New Zealand, here are the fundamental aspects to take into account.

Employee Contract

In New Zealand, it is a legal requirement to furnish your employees with a copy of their individual employment agreement. These agreements can be either written or oral, as long as both parties acknowledge it as their binding agreement. Given that English is the predominant language in the country, it is commonly used for such employment contracts.

Probation Period

Employees in New Zealand undergo a probationary period that spans from a minimum of 1 month to a maximum of 3 months.

Employee Leaves

Annual leave/Earned Leave -20 days

Sick Leave -10 days

Maternity Leave -26 weeks

Payroll Cycle

Typically, employees receive their pay on a weekly, bi-monthly, or monthly basis.

Minimum Wage

In New Zealand, the minimum wage varies based on the category of employees. Adults (aged 16 and above) and regular employees are entitled to a higher minimum wage rate compared to those who are starting or undergoing training.

Overtime Pay

In New Zealand, there are no legal restrictions concerning overtime pay. However, it is common for most employees to receive 1.5 times or 2 times their hourly wage, depending on the agreement between the employer and employees. This additional payment is often referred to as a penal rate, which is provided in addition to the standard rate.


13th-month salary

In New Zealand, it is a customary practice to provide a 13th-month bonus.

Employee Benefits

The New Zealand government has established a robust social welfare system, offering various benefits to its citizens and residents. Here are some of the benefits they provide to employees:

  • Unemployment benefit (Jobseeker support)
  • Domestic Purposes Benefit (Sole Parent Support)
  • Health benefits (Sickness Benefit and Invalid’s Benefit)
  • Pension Scheme (KiwiSaver, Accident compensation levies)
  • Superannuation

In New Zealand, the standard VAT rate stands at 15%, while the reduced VAT rate is set at 9%.

Termination Process

The termination process in New Zealand is straightforward and can be initiated through resignation, retirement, dismissal, or redundancy.

Notice Period

During the probationary period, the notice period for employees is typically one to two weeks, whereas for permanent employees, it ranges from two to four weeks.

Severance Pay

Employees will receive severance pay for any unused annual leave or days in lieu.

Severance Pay Rate

< 12 months- 8% of normal pay

≥ 12 months- 100% of normal pay

Visa and Immigration

Foreigners have various work visa options depending on the purpose of their stay in New Zealand. It is essential to possess a valid passport and the appropriate visa to ensure a smooth entry into the country. Your passport must remain valid for at least three months beyond your intended departure date, and if necessary, you should have a valid New Zealand visa.


📬 Receive our amazing posts straight to your inbox. Get the latest news, company insights, and Niural updates.

Thank you! Your message has been received!
Oops! Something went wrong. Please fill in the required fields and try again.

If you're considering hiring employees or contractors in New Zealand or seeking compliant payroll solutions, reach out to us or book a demo at For further insights, follow us on Twitter @niuralhq. Make informed decisions and ensure a successful hiring process in New Zealand!

Request a demo