New Zealand 🇳🇿
Congratulations on your decision to hire employees in New Zealand! With a thriving, diverse economy spread across more than 600 islands, New Zealand offers fertile ground for nurturing your business growth. Plane simplifies the hiring process for you by offering automated tax document collection, payroll, benefits administration, and more, while ensuring compliance and maximum efficiency. Still, hiring in a new country can pose certain challenges, so we’ve put together the following guide on how to navigate the process of hiring in New Zealand.
Currency
NZD
 Onboarding
3 to 4 weeks minimum
Employer Cost
13.35%
Pay Frequency
Monthly
Public Holidays
11
4 Considerations Before Hiring in New Zealand
As an employer in New Zealand, it is important to have a comprehensive employment contract that outlines the terms and conditions of the employment relationship. The contract should include need-to-know info on compensation, benefits, vacation time, and sick leave policies. Before onboarding a new employee in New Zealand, take a moment to consider the following:
Getting Started with Hiring in New Zealand
Employment Contract
In New Zealand, it’s mandatory for all employees to have a written employment contract that spells out rights and obligations between an employer and an employee. Employment contracts must comply with New Zealand labor law, including minimum wage requirements, statutory working hours, leave entitlements, and termination procedures.Most contracts in New Zealand are permanent, but you can hire employees on fixed-term contracts as well. However, there must be a genuine reason based on reasonable grounds to hire an employee on a fixed-term contract instead of a permanent one, like covering for an employee on leave, or working on a particular project. Fixed-term employees are entitled to all the same workplace rights as full-time employees.
Payroll Timelines and Dates
Pay Frequency: Employee payroll is monthly, with 12 pay periods per year. Pay is distributed on the last business day of the month.Payroll Change Cutoff Dates: To meet payroll deadlines, any changes must be submitted to support@plane.com by the cutoff date. For New Zealand, the payroll change cutoff date is on the last business day of the previous month. For example, changes to June payroll would need to be received no later than May 31, if May 31 is a business day.Plane sends payroll summaries to admins at the end of the second week of the month. After that, charges are automatically debited. Payroll summaries are also available to admins in their Plane accounts. Payday may vary based on country requirements.
Working Hours
The typical workweek for a full-time employee is set at eight hours per day, with a maximum of 40 hours per week, from Monday to Friday. Overtime pay is not mandatory by law, but may be agreed upon by employer and employee in their contract. However, 150% pay is required for hours worked on a public holiday. Employees also may say “no” to work that isn’t part of their guaranteed hours in their employment agreement, without being disadvantaged by the employer.Â
Public Holidays
New Zealand has 11 national public holidays:
- New Year’s Day
- Day after New Year’s Day
- Waitangi Day
- Good FridayÂ
- Easter Monday
- ANZAC Day
- Queen’s Birthday
- Matariki
- Labour Day
- Christmas Day
- Boxing Day
Compensation
We recommend using Plane's Remote Compensation Tool to check remote salary data in New Zealand by job title.Bonuses in New Zealand are not mandatory. However, many employers elect to provide bonuses to their employees. If the employer chooses to offer bonuses, the terms related to the bonus must be written into the employment contract.
Health Insurance Benefits
New Zealand has universal healthcare for all its citizens and legal residents, funded by general taxation. Employers may choose to, but are not required to, offer private health insurance as an additional employee benefit. This could help cover co-pays and non-covered services, such as elective surgery. We offer insurance to employees in New Zealand through BUPA Global.
Sick Leave
After their first six months of continuous employment, employees are entitled to a minimum of five days of paid sick leave each year. Employees may accrue an additional five days of paid sick leave after each subsequent 12-month period. Unused sick leave carries over to the next year, but the total accumulation of sick leave caps at 20 days. Employers pay their employees their normal wages while on sick leave.
Annual Leave
Employees in New Zealand are entitled to four weeks of paid annual leave after completing 12 months of continuous employment with an employer. This leave accrues over the year. The specifics of when and how this leave can be taken are usually agreed upon between the employer and the employee, with the employer required to consider the employee's preferences. However, if an agreement cannot be reached, the employer can decide when the leave is taken, provided they give employees at least 14 days' notice.The leave should be paid in advance at the beginning of the employee's holiday period. Unused annual leave can accumulate year after year if agreed upon, but we require employees to use their leave entitlements within each leave year. In some cases, with the employer's agreement, an employee may cash in a portion of their annual leave (up to one week) for payment in lieu of leave.Employers must pay out any accrued but unused annual leave days upon separation of employment. If the employee has worked for less than 12 months, then the employer must pay 8% of the employee’s gross earnings for the duration of employment, minus any leave taken in advance or payments in lieu of leave.Employers need to maintain accurate records of annual leave accrued and taken by each employee, ensuring compliance with the Holidays Act.
Maternity / Paternity / Parental Leave
Pregnant employees are entitled to up to 26 weeks of paid maternity leave, known as “primary carer leave,” which can start up to six weeks before the expected date of delivery and must be taken in one continuous period. To be eligible, the employee must have worked for the same employer for an average of at least 10 hours a week for the 26 weeks before the baby’s due date. Pregnant employees can also receive up to 10 days of unpaid leave for pregnancy related reasons, such as doctor’s appointments.Partners of pregnant employees, including spouses and partners in same-sex relationships, are entitled to up to two weeks of unpaid leave, provided they meet the same work criteria required for primary carers. This leave can be taken at the same time as the mother is on maternity leave, and at any point 21 days before or after the child’s birth, or before or after the primary carer’s leave starts.In addition to the paid leave, parents who have worked for at least 10 hours per week for 52 weeks before their leave starts can take extended unpaid parental leave for an additional 26 weeks. This extended leave starts after primary carer leave ends; the total combined paid and unpaid leave can amount to up to 52 weeks. Both parents can take extended leave, as long as they meet the eligibility criteria.The government funds paid parental leave, not the employer. The payment is based on the employee’s average earnings and is capped at a maximum amount set by the government.Employees must formally notify their employer of their intention to take primary carer leave or parental leave at least 14 days in advance. Employees on maternity or parental leave have their job or a similar position protected. They are entitled to return to their job or a similar position at the end of their leave.
Employment / Termination
You can terminate an employee for several reasons in New Zealand, including serious or repeated misconduct, performance issues, redundancy, incompatibility, and incapacity. While a termination does not need to be in writing, employees can ask for written documentation stating the reason for their dismissal. This request can be made up to 60 days after the dismissal and, if requested, the employer has 14 days to comply. If an employer fails to comply by the deadline, the terminated employee can file a grievance.At Plane, we process involuntary offboarding via Mutual Termination Agreement (MTA) as a common practice that enables an employer to terminate an employee while trying to minimize the risk of litigation and cost. It is a separation agreement including unused leave, notice period, severance, and terms negotiated between the parties in exchange for a waiver where an employee waives their right to challenge a termination as unfair or unlawful. The notice period varies based on the length of employment.It is important to note that Plane often cannot facilitate unilateral terminations or dismissals. These types of termination are a potential source of litigation that can expose employers to increased damages and other costs. Also, the reason for these terminations may not be valid for an employer of record. The notice period varies based on the length of employment.We ask that you give us as much notice as possible and involve us right from the beginning of the process so we can better support and guide you through the process. Involuntary termination can take time to negotiate with the employee to mutually agree and end on good terms. Here you can find additional information on how to terminate an employee.New Zealand does not require a specific notice period. Rather, the employment contract should specify the notice period required. If the employment contract does not provide a notice period, fair and reasonable notice must be given.
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Annual cost of employment*
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| Salary | Taxes (32.65%) | Total | |
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*rates for: July 23, 2024
Once you have sorted out the details mentioned above, you can add the employee to the Plane platform. We provide a step-by-step workflow that shows what tasks need to be completed, as well as real-time updates and notifications. This way, you can stay on top of the hiring process at all times. With Plane, you can confidently hire, knowing that you have a powerful platform at your disposal to manage the entire process from start to finish. Here are the instructions for adding a new employee to the platform:
How to hire and onboard an employee
Plane offers a guided process for administrators and managers to hire and onboard their new employees...
Learn moreHiring an employee in a new country can be a complex process, but with the right guidance and resources, it can be a smooth and successful transition. At Plane, we're committed to helping you navigate the process of hiring an employee in New Zealand. We'll keep you informed and up-to-date with the latest regulations and employment laws.Best of luck with your new hire, and welcome to New Zealand!
Frequently Asked Questions
Here are the answers to some common questions about hiring employees in New Zealand with Plane:
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