New Zealand is an island country situated off the southeastern coast of Australia. With a workforce of over 3 million people (2024) and a GDP of 252 billion US dollars (2024), New Zealand is becoming more popular with businesses looking to expand into new markets and hire in different countries.

The economy in New Zealand is stable and well-regulated, with a reliance on industries such as tourism, agriculture, tech, and education. New Zealand offers a skilled workforce that is strongly proficient in English, plus there are benefits to doing business in this country due to the lack of social security/payroll taxes. 

If your business is looking to hire in New Zealand, this help guide can help make the hiring process easier with an overview of New Zealand labor laws, mandatory employee benefits companies need to provide, supplementary benefit packages to consider, and information on how Remote People can help.

New Zealand Labor Law

The Employment Relations Act of 2000 is the primary legal framework that provides information on employee/employer obligations and rights. This act sets out working hours, overtime compensation rates, annual leave entitlements, and parental leave.

Other labor laws that contain rules around the relationship between companies and workers include the following:

  • Health and Safety at Work Act 2015
  • Parental Leave and Employment Protection Act 1987
  • Human Rights Act 1993
  • Wages Protection Act 1983
  • Minimum Wage Act 1983

When hiring in New Zealand, companies must consult legal experts to ensure strict compliance with local labor laws. This will ensure that employment practices adhere to the latest legislation and will also simplify the process of doing business in New Zealand.

Mandatory Employee Benefits in New Zealand

There is a range of mandatory employee benefits in New Zealand that companies must provide to their workers. These include the following:

Social Security Contributions

New Zealand has a social security system, which is primarily known as the New Zealand Superannuation (NZS). It is a non-contributory system, with neither employees nor employers obligated to contribute funds. The system is instead funded by general taxation.

However, employers and employees are responsible for paying into KiwiSaver, which is a mandatory employee retirement savings account. Employers must pay at least 3% of gross salary/wages, while employees must pay either 3%, 4%, 6%, 8%, or 10%.

Employers must also pay towards the Accident Compensation Corporation, which covers workplace injury insurance. This should be paid annually at the rate of 0.72% – 1.5% of liable earnings.

Annual Paid Leave

All employees in New Zealand are entitled to a minimum of 4 weeks paid annual leave. This is usually applicable after an employee has completed 12 months of continuous service with an employer. Annual leave cannot be carried over to the next year, and at least 3 weeks of annual leave must be taken per year.

Working Hours

Working hours in New Zealand are capped at 40 hours per week (excluding overtime). This is typically spread across 5 days (Monday-Friday), and employee contracts should dictate the number of hours an employee will typically work, their start/finish times, and set working days.

People working between the hours of 10 pm and 6 am are considered to be night workers, and are often eligible for an increase of between 20% – 50% on their hourly wage.

Overtime Pay

If an employee works hours that exceed their contracted amount, this counts as overtime. There is no legal mandate for specific overtime pay. However, many companies offer overtime rates of 1.5/2 times an employee’s normal hourly wage for overtime hours worked.

There are also no legal limits on the number of overtime hours an employee can work.

Public Holiday Leave

There are a number of public holidays celebrated in New Zealand that are considered paid days off and separate from annual leave entitlement.

The public holidays in New Zealand are as follows:

  • New Year’s Day (1 January)
  • The Day After New Year’s Day (2 January)
  • Waitangi Day (6 February)
  • Good Friday (3 April) (movable date)
  • Easter Monday (6 April) (movable date)
  • ANZAC Day (25 April; observed 27 April)
  • King’s Birthday (1 June) (movable date)
  • Matariki (10 July) (movable date)
  • Labour Day (26 October) (movable date)
  • Christmas Day (25 December)
  • Boxing Day (26 December; observed 28 December)

Sick Leave

Employees in New Zealand are entitled to 10 days of sick leave per year if they have worked for the same employer for 6 months.

Sick pay is payable at an employee’s normal rate of pay and can be carried over to the following year, to a maximum of 20 days of sick leave in total. An employee can use their sick leave for their illness or that of a close family member.

Maternity Leave

Maternity leave in New Zealand is otherwise known as Primary Carer Leave, and permits an employee to have 26 weeks of paid leave in the following circumstances:

  • Employee is pregnant or has given birth to a child
  • Employee’s spouse/partner has given birth to a child, and the employee will be the primary carer
  • An employee is taking permanent responsibility for a child under the age of 6 who is not their biological child (e.g., adoption)

Employees must have worked for the same employer for an average of at least 10 hours a week in the six months leading up to the birth. Leave can start 6 weeks before the child is born.

Paternity Leave

An employee who is a spouse or partner of someone who is having a baby is entitled to partner leave. Partner leave consists of 1 week of unpaid leave if they have worked for the same employer for an average of 10 hours a week for 6 months, or 2 weeks of unpaid leave if they’ve been employed by a company for 12 months.

Pensions

The pension system in New Zealand is known as the New Zealand Superannuation (NZS) and is a non-contributory, flat-rate pension scheme for residents of New Zealand over the age of 65. It provides social protection in retirement and is funded by general taxes. 

Occupational superannuation schemes and the Kiwisaver scheme are also offered to New Zealand residents, with private pension saving schemes offered as a supplementary method for saving in retirement.

Severance Pay

Severance pay is not legally mandated in New Zealand. However, many companies choose to offer severance pay as an optional extra to employees who have had their contracts terminated. This is usually calculated based on years of service, experience, and job role.

Supplementary Employee Benefits in New Zealand

Companies are advised to consider offering supplementary employee benefits alongside mandatory employee entitlement. Additional perks can encourage employees to stay with a company for a longer period and be more likely to apply for a role in the first place.

Some examples of popular supplementary benefits include:

  • Private pension
  • Performance bonuses
  • Travel, housing, or food allowances
  • Company car
  • Flexible working
  • Enhanced annual leave
  • Advanced training opportunities

Optimize Employee Benefits with Remote People

Remote People specializes in supporting companies hiring in New Zealand through a suite of global employment services.

One of our core offerings is our Employer of Record (EOR) service. As the legal employer, the EOR handles responsibilities such as employment contracts, payroll, and benefit compliance—ensuring your team is hired in full alignment with New Zealand’s labor laws. This simplifies expansion, letting you focus on growing your business while we manage the operational complexity.

We can help you hire directly in New Zealand with our recruitment services. We have a team of highly qualified people that are experienced with the New Zealand recruitment space, understanding the best places to advertise your job roles so they’re seen by the best candidates. They are also fluent in the local language and customs, giving your company a significant advantage over your competitors.

Other services we can offer to assist with doing business in New Zealand include PEO services and payroll outsourcing, helping to improve compliance around HR, payroll tasks, employment contracts, and general tax obligations. 

Contact Remote People today to get advice on doing business in New Zealand and streamline your recruitment.