Hire and pay employees in New Zealand quickly and compliantly

Complying with labor and employment laws in New Zealand

New Zealand prides itself on balancing strong worker protections with business-friendly practices. Central to this framework is the Employment Relations Act 2000 (ERA), which emphasizes good faith bargaining and fair treatment. Employers must also be mindful of other key statutes, such as the Holidays Act 2003 and the Minimum Wage Act 1983.

But like any country, New Zealand’s labor and employment laws can be complex. The country has distinct regulations, and noncompliance can result in financial penalties, damage to your employer brand, or intervention by government agencies like the Ministry of Business, Innovation & Employment (MBIE). Additionally, Kiwis place a high value on trust and fairness, and violations can hurt morale and retention.

If you’re looking to hire in New Zealand, simplify your compliance work by partnering with Rippling EOR. Get expert HR support on New Zealand’s employment laws so your business is always up to date on the latest regulations.

Employment contracts in New Zealand

An employment contract establishes a legal working relationship between an employer and an employee, typically outlining the terms and conditions of that relationship. 

In New Zealand, every employee must have a written employment agreement—either an individual or collective agreement. The contract should clearly lay out terms like duties, hours, wage rates, and any relevant additional clauses, such as redundancy conditions or confidentiality.

Here are some of the key elements to include in employment contracts:

• Nature of the employment: Whether it’s permanent, fixed-term, or casual. Note that most employment contracts in New Zealand are permanent by default, and fixed-term contracts need a genuine reason in order to have that status.
• Pay and benefits: Include whether the employee is paid hourly or salary, plus overtime terms and potential KiwiSaver contributions.
• Working hours: Most New Zealanders work around 40 hours a week, but flexible and part-time arrangements are common.
• Dispute resolution: Outline your organization’s policy or processes for internal mediation or reference MBIE’s resolution services.

Provide new hires with a copy of the contract well before they start, and encourage them to seek independent advice if needed.

Labor unions in New Zealand

Unions in New Zealand, historically tied to the country’s strong egalitarian values, negotiate collective agreements in industries like transport, education, and healthcare. While private-sector union density is lower than in the public sector, unions remain active and play an important role in safeguarding wages and working conditions. The NZ Council of Trade Unions (CTU) is the umbrella organization for unions across New Zealand.

Some key points for employers to note:

• Collective employment agreements (CEAs) can set industry-specific pay scales or leave entitlements.
• Unions operate under the Employment Relations Act, which mandates good-faith bargaining and prohibits unfair dismissal of union members.

Employers should be open and respectful if employees join a union or if a union requests negotiations. Embracing good-faith engagement can help maintain a stable, motivated workforce, consistent with Kiwi cultural values of fairness and cooperation.

Mitigating permanent establishment risk in New Zealand

A permanent establishment (PE) refers to a fixed location, such as an office, factory, or branch, where a business regularly conducts its activities in a foreign country. If a company has established PE in another country, it might have to pay corporate income taxes there on the revenue it earns in that jurisdiction.

Similarly, if a foreign company is deemed to have a PE in New Zealand, the Inland Revenue (IR) may levy corporate income taxes on profits connected with the local activity. Common triggers include:

• A place of management
• An office
• A branch
• A factory
• A workshop
• A mine, an oil or gas well, a quarry or any other place of extraction of natural resources
• An agricultural, pastoral, or forestry property
  

A building or construction site, installation, or assembly project that lasts more than six months.
When in doubt, consult New Zealand-based tax advisors who know how IR interprets PE for your industry and business model, especially if your employees frequently operate on Kiwi soil.

Work with an EOR. An employer of record can help manage the complexities of hiring abroad. Rippling EOR can navigate tax and employment laws, helping your business comply with permanent establishment laws in New Zealand.

Protecting company IP in New Zealand

Intellectual property (IP) refers to creations of the mind, including inventions, designs, brand names, music, software, or written works. These can be protected by law, and New Zealand offers several ways to do so.

NZ’s intellectual property laws align with the World Trade Organization’s TRIPS (Trade-Related Aspects of Intellectual Property Rights). The Intellectual Property Office of New Zealand (IPONZ) handles trademark, patent, and design registrations. Copyrights are assigned automatically, with no need to register.

In tech or creative industries, it’s a good idea to integrate confidentiality and IP assignment clauses into contracts, clarifying who owns inventions or creative outputs. NZ courts generally uphold such clauses as long as they’re clear and fair.

Here are the primary types of IP you can protect under the law in New Zealand: 

• Patents: Once registered with IPONZ, novel and inventive patents have up to 20 years of protection.
• Trademarks: Trademarks are renewable in 10-year intervals, covering brand names, logos, or slogans.
• Designs: Designs can be registered to protect product appearance, typically for up to 15 years.
• Copyrights: Copyrights are automatic for original artistic works, lasting 50 years after the creator’s death.

Local laws in New Zealand

New Zealand has a number of core pieces of legislation that cover local labor and employment laws, such as the Employment Relations Act 2000 (ERA), Holidays Act 2003, Minimum Wage Act 1983, and Human Rights Act 1993. For global employers with workforces distributed around the world, complying with various laws across different jurisdictions can be tricky. With that in mind, here are some other important local labor laws and regulations to know as you consider hiring in New Zealand:

• Employers have a duty to protect data and privacy. Under the Privacy Act 2020, any organization that collects and/or stores private information must take reasonable steps to protect it from unauthorized access and must not use or share that information without the owner’s consent.
• Workplaces must be safe and clean. Under the Health and Safety at Work Act 2015, employers have a duty to provide a safe workplace, addressing hazards ranging from office ergonomics to site-based risks.
• Discrimination is illegal in all workplace contexts. The Human Rights Act 1993 prohibits discrimination based on race, gender, disability, etc.

New Zealanders value peaceful, respectful work environments. Employers with robust safety protocols and respectful privacy practices tend to attract talent in a market that treasures the environment and personal well-being—think of the “Clean, Green, New Zealand” ethos in the workplace context.

Worker classification and misclassification in New Zealand: Contractors vs. employees

Determining the proper working arrangement is key before you start hiring workers in New Zealand. You’ll want to consider which arrangement—independent contractor or permanent employee—is the best fit for your business. Both have their own implications, making it important to know the differences.

In New Zealand, the ERA is clear that workers are “employees” if they’re integrated into the employer’s enterprise and subject to the employer’s control. Independent contractors generally set their own hours, supply their own equipment, and bear financial risk. Misclassifying workers in New Zealand—even accidentally—can result in serious penalties, back payment of taxes and wages, and other legal action.

Worker classification in New Zealand: Key differences between contractors and employees

New Zealand courts have developed four legal tests to help determine whether someone is an independent contractor or an employee:

• Intention test
• Control vs independence test
• Integration test
• Fundamental/economic reality test

The tests take into account factors from the table above. It’s important to note that no one test is considered conclusive, and courts and tax authorities may weigh multiple factors when deciding an individual’s classification.

Consequences of misclassification in New Zealand

Misclassifying workers in New Zealand can result in serious consequences. Companies found to have misclassified employees as contractors or casual workers can face steep fines—two businesses in a 2019 misclassification case were penalized $55,000 by the Employment Relations Authority for misclassifying a total of 29 permanent workers.

In addition to fines, employers may have to pay:

• Back wages and holiday pay: If deemed employees, workers can claim holiday pay, KiwiSaver contributions, or other missed benefits.
• Tax penalties: IR might demand unpaid PAYE taxes or ACC levies.
• Legal settlements: Misclassified employees themselves can seek legal action, and the courts might require further compensation.

To mitigate misclassification risk, look at how daily tasks are supervised, who provides the tools, and the extent of financial risk. If a worker closely resembles an employee, classify them as such from the start to avoid headaches.

Wages and payroll in New Zealand

Many New Zealanders place high importance on work-life balance and fair compensation, reflecting the strong social cohesion in places like Auckland’s collaborative tech hubs or Wellington’s creative industries. That’s reflected in the country’s wage and hour laws. Learn more about wages and payroll in New Zealand below.

Minimum wage in New Zealand

As of April 2025, The Workplace Relations and Safety Minister will raise New Zealand’s minimum wage to $23.50 per hour, an increase of 35 cents from the prior hourly rate of $23.15.

New Zealand has lower minimum wages for certain workers. Also, beginning April 2025, the training and starting-out minimum wage will be $18.80 per hour (80% of the adult minimum wage).

The starting-out wage applies if the employee is under 20 years old and meets certain legal requirements:

• They’re 16-17 years old and haven’t worked for their current employer for six continuous months. Once they reach six continuous months of service, they must be paid the adult minimum wage.
• They’re 16-19 years old, and their employment agreement requires at least 40 credits a year of industry training.
• They’re 18-19 years old and have been paid one or more social security benefits for at least six continuous months or haven’t worked for their current employer for six continuous months since they started receiving one or more social security benefits.

The starting-out wage does not apply if the employee’s role includes training or supervising other workers.

The training wage, which is typically for apprentices, applies if the employee is over 20 years old and their employment agreement requires at least 60 credits a year of industry training.

The minimum wage in New Zealand is updated frequently (typically each year). Check official notices around March/April annually to adjust payroll systems promptly. Failing to meet the new rate can lead to fines.

Payroll frequency in New Zealand

The standard payroll cycle in New Zealand is bi-weekly or monthly, although some sectors prefer weekly payouts—especially in trades or hospitality. Whatever frequency you choose, you must pay wages on time in full, and employees must receive a pay slip detailing their gross pay, deductions, and net pay.

13th month pay in New Zealand

13th month pay is an additional payment given to employees, usually equivalent to one month’s salary. Unlike some countries, New Zealand does not mandate a 13th month salary. Instead, year-end or holiday bonuses are typically performance-based or discretionary. Many employers, however, show appreciation with small seasonal perks (like shared lunches or vouchers) around Christmas or end-of-year gatherings.

Run payroll compliantly in New Zealand

Managing employees and payroll in foreign countries and jurisdictions can be complex, especially when it comes to compliance. By working with an EOR, you can get all the help you need to handle deductions, adhere to local wage laws, and make accurate, on-time payments. Rippling EOR makes hiring and paying employees across the globe quicker and easier than ever.

Employer and employee taxes in New Zealand

In New Zealand, all employers must comply with payroll tax regulations or face government penalties. It’s up to employers not only to make their own mandatory contributions to social insurance schemes like KiwiSaver and the ACC but also to calculate and withhold their employees’ contributions. Employers are also responsible for withholding and remitting employees’ income taxes to the Inland Revenue Department (IR).

New Zealand’s tax system ranks high globally for simplicity, but employers still need to be diligent. Here are the top things to understand about employer and employee taxes in New Zealand.

Employer taxes in New Zealand

Employers contribute to two social insurance schemes in New Zealand: the KiwiSaver and the Accident Compensation Corporation Levy (ACC).

KiwiSaver is a retirement fund. Employers must contribute at least 3% (but can choose to contribute more) to either KiwiSaver or a complying retirement fund. Employees can choose a KiwiSaver contribution rate of 3%, 4%, 6%, 8%, or 10% of their gross salary or wages. Employers must also pay the employer superannuation contribution tax (ESCT) on all employer contributions to KiwiSaver schemes and complying funds. The ESCT rate varies based on the employer's contribution amount.

The Accident Compensation Corporation Levy (ACC) covers the cost of injuries caused by accidents and maintains high health and safety standards in workplaces. All employers in New Zealand must contribute to the ACC by paying two levies: the Work Levy and the Working Safer Levy.

Employee taxes in New Zealand

New Zealand employees also contribute to KiwiSaver and the ACC. The default KiwiSaver contribution rate is 3%, but employees can choose a higher rate of 4%, 6%, 8%, or 10% of their pre-tax pay. Employees contribute to the ACC by paying the earners’ levy, which is 1.27% excluding goods and services tax (GST) or 1.46% including GST.

Employees in New Zealand pay progressive income tax, meaning the amount of tax they pay increases as their income increases. Prior to March 31, 2025, tax rates are:

Beginning April 1, 2025, tax rates are:

Employees who earn more than one source of income also pay secondary tax. Secondary tax rates are based on the total amount of income earned from all sources. Secondary tax rates are:

Penalties for not paying taxes in New Zealand

Falling short on remittances or failing to file or pay on time can lead to late payment penalties, interest, and possibly legal enforcement actions. IR expects timely e-filing and payment, especially for international employers with multiple staff in NZ.

It’s also vital to maintain accurate, up-to-date records and respond promptly to IR queries. If errors occur, proactive disclosure can result in reduced penalties under IR’s cooperative compliance approach.

Help mitigate tax compliance concerns by working with an EOR. EORs take care of compliance responsibilities by handling payroll taxes on your behalf, making sure they’re paid correctly and on time. This allows you to focus on growing your business in New Zealand and beyond.

Employee benefits in New Zealand

Offering robust employee benefits in New Zealand can help your organization attract and retain top talent in a competitive job market. Benefits packages in the country commonly emphasize health, family life, and personal growth, reflecting Kiwi priorities. There are also some benefits that are mandatory, meaning employers are required by law to provide them. Understanding the requirements can help you avoid legal issues when hiring in New Zealand. Here’s an overview of statutory and optional benefits.

Mandatory benefits in New Zealand

Mandatory benefits are legally required, meaning employers must provide them to their employees to stay compliant with New Zealand’s employment laws. There are only two main mandatory benefits employers must provide:

• KiwiSaver: KiwiSaver is New Zealand’s social retirement savings scheme for employees between the ages of 18 and 65. All employees are auto-enrolled at a contribution rate of 3%, but employees can choose to contribute more (up to 10%). Employers must contribute a minimum of 3%, but can choose to contribute more. Employees can opt out of contributing, or employers can enroll their staff in a complying retirement fund instead.
• Accident Compensation Corporation (ACC): Employers contribute to the ACC to cover workplace injuries and maintain safe work environments.

Optional benefits in New Zealand

Offering optional and fringe benefits can help employers attract high-quality job candidates, especially in countries like New Zealand, where competition for a limited candidate pool can be fierce. It’s common for Kiwi employers to offer supplementary benefits, but it can still be daunting to decide which ones to include in your package. Here are some common optional benefits you might consider when hiring in New Zealand:

• Wellness benefits: Gym memberships, mental health days, or subsidized sports events (like local rugby matches)
• Professional development: Funding for conferences, courses, or local marae-based cultural workshops
• Flexible work arrangements: Location independence for remote workers or compressed weeks, especially appealing to Kiwi families who enjoy summer getaways
• Private health insurance: Not state-mandated, but private coverage can supplement the public health system
• Long service leave: Not mandatory in New Zealand, but employees who have long tenure with their employers often negotiate extra annual leave or sabbaticals

Acknowledging Māori culture with your benefits offerings—like allowing bereavement leave for tangihanga (Māori funerals)—and respecting Waitangi Day’s significance demonstrates cultural sensitivity and appreciation for New Zealand’s diversity.

Working hours, overtime, and leave in New Zealand

No matter where in the world you hire, it’s crucial to understand standard working hours, overtime regulations, break rules, and leave laws—especially since these types of requirements can vary significantly from country to country. In New Zealand, many workers are protective of their work-life balance, something that’s reflected in the country’s working hours and leave laws. Legislators encourage reasonable work hours, rest breaks, and sufficient annual leave to let employees recharge. 

Standard working hours in New Zealand

The ERA doesn’t set an explicit maximum for standard hours, but 40 hours per week over five working days is common. Many roles adopt a Monday-Friday model, working eight hours per day. Employers should outline the expected working hours in the employment agreement, and if an employer or employee ever wants to change their work hours, they should agree to the new hours in writing in an updated agreement.

Overtime laws in New Zealand

Overtime isn’t as strictly regulated in New Zealand as in many countries. The law doesn’t stipulate any mandatory overtime pay, maximum regular working hours, or maximum overtime hours an employee can work. Instead, overtime pay (and the working hours at which it will apply) should be specified in employment agreements or collective agreements—1.5 times the employee’s regular pay is common. If employees work beyond the agreed hours in their employment agreement, employers should pay a higher rate or offer lieu time.

If you choose to include an overtime clause in your employment agreement, make sure it’s clear and transparent. Define how you’ll calculate and compensate overtime hours, including on weekends and public holidays.

Rest period and break laws in New Zealand

Under the Employment Relations Amendment Act 2018, employees in New Zealand are entitled to rest breaks and meal breaks—enough to rest, refresh, and attend to personal matters. Employees receive one 10-minute paid rest break and one 30-minute unpaid meal break for every four hours of work.

Leave laws in New Zealand

Kiwi employees are entitled to several types of paid leave annually. Mandatory leave entitlements include:

• Annual leave: After 12 months of continuous employment, employees are entitled to a minimum of four weeks of annual leave, with the option to “cash in” one week if agreed upon with their employer. Any accrued unused annual leave is rolled over into the following holiday year. Accrued unused leave must be paid out on termination. 
• Sick leave: After six months of employment, employees are entitled to 10 days of paid sick leave per year, which they can use to care for themselves, their partners, or their dependants. Sick leave can roll over and accumulate for up to 20 days.
• Parental leave: New Zealand offers multiple types of parental leave, including maternity leave, primary carer leave, adoption leave, and more, to accommodate parents of all types:
• Primary carer leave: Up to 26 weeks of paid leave for employees who are pregnant or have given birth to a child (including if they are acting as a surrogate), the spouse of someone who has given birth (if they will be taking primary responsibility for the child’s care), or an employee who will be taking permanent care of a child under the age of six through adoption, a whāngai arrangement, or under a Permanent Care agreement with Oranga Tamariki. The employee must have worked for their employer for an average of 10 hours a week in the six months prior to taking leave, and they must take the leave in one continuous period.
• Partner’s leave: Up to two weeks of unpaid leave for employees who are the spouse or partner of someone who is pregnant or the primary carer of a child under the age of six.
• Extended leave: Up to 52 weeks (minus the amount of primary carer leave already taken; for example, if they’ve taken 26 weeks of primary carer leave, they can take an additional 26 weeks) of extra unpaid leave for employees who are the primary carer of a child if they’ve worked for their employer for 12 months or more for at least an average of 10 hours a week.
• Bereavement leave: One to three days of paid leave in the event of the death of a close person. The amount of leave depends on the employee’s relationship to the deceased; employees receive three days of bereavement for the death of an immediate family member (parent, child, partner or spouse, grandparent, grandchild, brother, sister, parent-in-law), a miscarriage, or stillbirth.
• Family violence leave: Employees are entitled to 10 days of paid leave per year if they, or a child who lives with them, experience family violence.
• Jury service leave: Employees who are summoned for jury service are entitled to leave from work. The Ministry of Justice administers jury leave and pays employees a small fee. Employers are not mandated to pay employees for jury service leave, but many choose to “top up” the fee their employees receive from the Ministry of Justice so they receive their full wages.
• Employment Relations Education leave: Employees who are union members receive paid leave to attend approved courses in employment relations. Unions calculate and pay entitlements for ERE leave.
• Voting leave: Employees are entitled to unpaid time off to vote in general (parliamentary) elections on polling day if they don’t have reasonable time to vote outside of working hours.
• Defence force volunteer leave: Employees are entitled to job-protected, unpaid leave while attending training for or serving in the Armed Forces.
• Leave without pay: Employees can take leave without pay if their employer agrees. They should make agreements in writing.
• Public holidays: New Zealand recognizes 11 public holidays, during which employees receive holiday pay. If they work on a public holiday, they must be paid at least time-and-a-half. If a public holiday falls on a weekend, it’s typically observed the following Monday.

Employee onboarding in New Zealand

No matter where you hire, you want to build strong, long-term relationships with your employees—and your onboarding process sets the foundation for that. Keep in mind that a smooth, organized onboarding flow starts before a new hire’s first day. Complete administrative tasks like background checks and required documentation in advance of their start date so your new employee can hit the ground running on their first day.

Beyond paperwork, Kiwi onboarding involves integrating new hires into a supportive environment, which might involve a team-building session to bond with their colleagues.

For the official parts, though, a checklist is a helpful tool to stay on track and manage every part of the onboarding journey.

How to onboard employees in New Zealand: A simple checklist

Our new hire onboarding checklist can set your new employee up for success on their first day:

Running background checks in New Zealand

Are background checks legal in New Zealand?

Background checks are legal in New Zealand, but they must comply with the Privacy Act 2020. One of the main points to note is that employers must obtain informed consent for checks like criminal records, credit history, or past employment references. Another important regulation employers need to know when conducting background checks is the Criminal Records (Clean Slate) Act 2004, which requires some criminal convictions to be concealed.

What types of background checks are illegal in New Zealand?

New Zealand doesn’t limit any types of background checks, but employers still have to follow some rules under the law to respect job applicants’ legal and employment rights. For example, it’s against the law for employers to:

• Run background checks without consent. This is especially important when it comes to criminal record checks. Employers need to get explicit, informed consent from job candidates, preferably in writing, before conducting any background checks.
• Discriminate in their hiring practices. New Zealand law prohibits discrimination based on protected characteristics, including age, marital status, family plans, race, ethnicity, disability, sexual orientation, or religion.
• Mishandle job candidates’ data. The Privacy Act 2020 protects how candidates’ personal information is collected, used, stored, and disclosed. Employers must only collect personal information relevant to the job role and must take reasonable steps to prevent unauthorized access to that information.

Types of New Zealand background checks

Offer letters in New Zealand

While not a strict legal requirement—since the signed employment agreement is binding—offer letters are often standard practice for summarizing job titles, pay rates, and start dates and can help with negotiations during the hiring process. Having this informal step can help clarify expectations before drafting the contract. Since there isn’t a legal framework that governs offer letters, employers can choose whether or not to send one and which information to include.

Here’s a brief list of details you may want to add to an offer letter (but keep in mind that this isn’t an exhaustive list):

• Job title, description, and company name 
• Start date 
• Working hours 
• Compensation and benefits (including the employee’s salary, equity, and other perks)
• Termination policy 
• Confidentiality and non-disclosure agreements 
• Contact information and phone number

NDAs and confidentiality agreements in New Zealand

Confidentiality agreements are common in New Zealand, and they're frequently used in sectors like IT or biotech to ensure employees protect trade secrets and data. New Zealand courts generally uphold NDAs and confidentiality agreements as long as they’re specific and don’t overly restrict an individual’s right to earn a living post-employment. No specific New Zealand law governs non-disclosure; instead, these agreements and clauses fall under general contract law, such as the Contract and Commercial Law Act 2017, which governs contract enforcement.

Employers can include non-disclosure or confidentiality clauses as part of an existing agreement—like an employment contract—or draft a separate confidentiality agreement that treats every situation as its own clause. When drafting NDAs and confidentiality agreements, remember to be specific and fair—clearly identify the scope of the protected information, the time frame, and potential legal remedies if an employee breaches confidentiality. Courts may challenge an excessive or indefinite ban for being unreasonable.

Probationary period in New Zealand

New Zealand businesses are permitted to use trial periods of up to 90 days when hiring new employees. During the trial period, they can dismiss the employee without the risk of personal grievance or other legal proceedings.

A trial period is different from a probationary period, which is also allowed when hiring a new employee, for any length of time that is “reasonable considering all the relevant circumstances of the employee, employer, and the job,” according to the Ministry of Business, Innovation, and Employment. Employers use a probationary period to assess a new employee’s skills, but only during a trial period—they can’t use them after the trial period is over. Probationary periods are less flexible than trial periods; during a probationary period, an employer can’t dismiss an employee without a fair process that includes telling them if there are issues with their work, what the issues are, what good performance looks like, and allowing the employee to improve before the end of the probation period.

Work permits in New Zealand

Before your new employee starts work in New Zealand, it’s up to you, as the employer, to make sure they have the legal right to work in the country. Non-residents need the correct visa or work permit—like the Essential Skills Work Visa or the Skilled Migrant Category Residence Visa—to legally work in New Zealand. Which type of permit they’ll require depends on the job, industry, and their circumstances.

Who needs a work visa in New Zealand?

Generally, anyone who is not a citizen, resident, or Australian citizen must hold a valid permit to work in New Zealand. Due to New Zealand’s labor shortage, the employer might need to prove that no suitable Kiwi was available for the role before the employee can qualify for a work permit, especially for mid- to lower-skilled jobs.

How long does it take to get a work visa in New Zealand?

Time varies by visa type, applicant credentials, and Immigration New Zealand’s (INZ) workload. High-priority “Accredited Employer Work Visa” or “Skilled Migrant Category” applications may receive faster processing, but problems like incomplete applications can stall progress, so it’s important to obtain all necessary paperwork—job descriptions and wage details—before lodging applications.

INZ posts and updates processing times for different visa categories on its website, so check them periodically to keep an eye on how long it might take to get a visa approved.

Types of work visas in New Zealand

New Zealand offers a variety of work permits with different requirements, including working holiday visas for visitors from around the world, work visas specific to different industries, and work permits for in-demand workers. The most commonly accepted types of work permits include:

• Accredited Employer Work Visa (AEWV): Employers accredited by INZ can sponsor skilled workers. Typically, visas are only issued to workers whose jobs are on the Green List for in-demand roles.
• Skilled Migrant Category (Resident Visa): Long-term residence for highly skilled migrants with a job offer in New Zealand. Employees must qualify based on a points system for education, income, and skilled work experience.
• Working Holiday Visa: This visa allows limited, short-term New Zealand employment opportunities for young travelers from approved countries.

Employers planning to hire repeatedly from outside New Zealand can become accredited employers to help expedite the process.

Termination and redundancy in New Zealand

As you’re hiring your first employee in New Zealand, you likely aren’t thinking about termination procedures. But it’s crucial for all employers to know the laws around offboarding, or you could be setting yourself up for legal trouble down the line.

New Zealand law prohibits unjust or abrupt dismissal. Employers must follow fair processes when letting employees go, including consultation and clear communication. In cases of genuine redundancy, you must show the role is no longer needed and consider redeployment options if feasible.

Here’s what to know about termination and redundancy rules in New Zealand.

Does at-will employment exist in New Zealand?

At-will employment is a common legal principle in the US that allows either an employer or employee to end their employment relationship at any time, for any reason—or even without reason—as long as they don’t break any laws (for example, firing an employee on a basis that amounts to discrimination).

New Zealand does not recognize at-will employment. New Zealand law mandates valid reasons and fair procedures for all terminations. Even during a 90-day trial period, employers are required to comply with notice requirements and demonstrate good faith when terminating employment agreements.

To avoid disputes or legal problems, it’s always best practice to provide thorough evidence of any performance issues or legitimate business restructuring. Failing to do so may result in reinstatement orders, compensation, or other remedies from the Employment Relations Authority or Employment Court.

Notice periods in New Zealand

A notice period refers to the time an employee or employer needs to provide advance notice before ending an employment relationship. Unlike many other countries, New Zealand doesn’t mandate any minimum notice periods. Instead, the minimum notice usually appears in the employment agreement—commonly two to four weeks. 

If the employment agreement doesn’t include a notice clause, then fair and reasonable notice is required. New Zealand courts interpret “reasonable notice” based on role seniority, industry norms, and length of service. In lieu of notice, employees can take leave as long as the employee and employer agree in writing.

Severance pay in New Zealand

Severance compensation isn’t a universal statutory requirement in New Zealand—rather, it depends on the employment contract or collective agreement. However, many Kiwi employers do offer ex gratia payments to smooth redundancies, disputes, and challenging terminations and maintain goodwill with their exiting employees.

How to terminate employees compliantly in New Zealand

When terminating employees in New Zealand, you must:

1. Show a valid reason for the termination. This can include poor performance, misconduct, or genuine redundancy.
2. Follow fair procedure. Give and document warnings, allow the employee a chance to respond, and engage in a good-faith dialogue about how the employee can improve.
3. Observe the required notice period. Comply with contractual or “reasonable” notice, and then pay the employee their final wages promptly.
4. Offer the employee support. References, job placement guidance, and severance pay can help ease the employee’s transition and maintain goodwill.

When managing a global team, keeping track of termination regulations can be a challenge. Employers have to contend with just-cause rules, varying notice and probation periods, and inconsistent severance laws across different jurisdictions. Instead, consider partnering with an EOR, which can take care of compliance on your company’s behalf, making sure you stay on the right side of the law from onboarding to offboarding.

FAQs about hiring in New Zealand

Can I hire employees in New Zealand without my own legal entity?

Yes. You can collaborate with an employer of record (EOR) that’s registered locally to hire employees without the hassle of setting up your own local entity. The EOR handles payroll, taxes, and compliance while you focus on daily management.

An EOR like Rippling can help you quickly tap into New Zealand's talent pool, grow your global workforce, and reduce both compliance risks and administrative workload.

What is the difference between an independent contractor and an employee in New Zealand?

Employees work under the employer’s direction, receiving entitlements like annual and sick leave, minimum wage protections, and KiwiSaver contributions from their employer. Contractors usually control their own hours, supply their own equipment, and invoice for services. Misclassification risks fines, back pay for leave, and potential tax consequences.

How much does it cost to hire an employee in New Zealand?

Beyond gross wages, factor in KiwiSaver contributions (3% min.), ACC levies, and four weeks of paid annual leave, plus statutory holidays. Here’s a breakdown of the employer’s annual costs:

What are the requirements for work permits in New Zealand?

Non-residents typically need a valid work visa, such as the Accredited Employer Work Visa (AEWV) or Skilled Migrant Category Visa. The employer may need accreditation or a labor market check. Processing times vary but typically range from two to eight weeks.

What is always required when an employer terminates an employee in New Zealand?

By law, to terminate an employee in New Zealand, an employer needs a fair reason (like poor performance, serious misconduct, or restructuring) and a fair procedure. When ending an employment agreement, you should notify employees, let them respond, and honor contractual or statutory notice. Be sure to pay final wages and any accrued leave promptly. Terminations are challenging in New Zealand, and it is likely that employees will attempt to challenge the dismissal via legal proceedings. Therefore, seeking legal advice is always recommended when contemplating terminations in New Zealand. 

What benefits are required for employees hired in New Zealand?

New Zealand employee benefits that are legally mandated include KiwiSaver and ACC contributions, annual leave, paid public holidays, sick leave, and parental leave. Beyond that, many employers offer flexible work, wellness perks, or additional insurance, but these aren’t mandated.

How does a US company pay a foreign employee in New Zealand?

There are generally three ways a US company can pay a foreign employee in New Zealand:

1. Form a local entity and register with IR for PAYE, KiwiSaver, etc.
2. Partner with an EOR that is based in New Zealand so it can handle all local tax and legal obligations.
3. Use a global payroll service, which can integrate payroll for multiple countries.

Disclaimer: Rippling and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.