New Zealand is a large island country hosting a mix of Maori and European cultures. It’s a high-income country and was the first modern country to enact a minimum wage law and give women the right to vote. New Zealand’s workforce is highly skilled and well-educated, and includes nearly three million (2.914 million) people.

If you want to hire New Zealanders, you have a few options at your disposal. In this guide, we’ll focus on how to employ “Kiwis” without having to own an entity in the country with the help of a New Zealand EOR.

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How to Hire Employees in New Zealand

New Zealand has long been known as a source of educated workers with valuable skills. However, because of the nation’s geographic isolation and relatively small economy, a large fraction of its best workers have been working in the UK and Australia for decades.

If you’re also unfamiliar with the labor market in New Zealand, this can make it very difficult to find and manage the workers you need here. If you’re set on working with New Zealanders, the options you have to choose from include:

Setting Up a Local Entity

Foreign investors often choose to open subsidiaries, branch offices, or even new companies in New Zealand. They can choose from many business forms, including limited liability companies (LLCs), limited liability partnerships (LLPs), or public limited companies (PLCs). According to the World Bank, New Zealand is the easiest country in the world to start a business, and it can take only half a day and one stop at the online New Zealand Companies Office to get started.

However, there are still many challenges to hiring workers through your own business based in New Zealand. You’ll still need to recruit, hire, and manage HR for your employees, which means you may need to hire an HR team and/or collaborate with legal, tax, and HR professionals. You’ll also be entirely responsible for compliance with all local employment laws and can face stiff penalties for any mistakes you might make.

Working with an Employer of Record (EOR)

Another alternative you may not have heard of is hiring employees legally in New Zealand, even without owning an entity there, with the help of an Employer of Record. EORs help you avoid the burden of setting up and managing an entity in the country and the risks inherent in working with contractors.

Hiring Independent Contractors

An alternative to incorporating an entity and hiring permanent employees is to work exclusively with independent contractors, also known as freelancers. These are self-employed workers who may be able to offer you special skills and knowledge that you need to work on your New Zealand-based projects. They can often be found and hired easily, and can cost a lot less than taking on permanent employees. You also won’t need to worry about tax withholdings and payments, as contractors take care of these elements by themselves.

There are, however, also downsides to working with contractors. Because they’re self-employed, they work the days and hours that they want and are only beholden to you for the dates they’ve agreed to deliver work. You also can’t dictate how they perform their work, and you also can’t stop them from working for other clients at the same time as they work for you. If you do try to control these factors, you’re essentially treating them as employees instead and if you don’t also manage their taxes and benefits, you can be penalized for misclassifying them.

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  • No local entity is needed
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We’re going to explain how this arrangement works and what an EOR does, so you can make an informed decision on whether or not working with an EOR is the right choice for your business.Q

New Zealand Employer of Record vs Legal Entity

Companies looking to work with New Zealanders must consider which option is best for them: Working with a New Zealand EOR partner or setting up a legal entity in New Zealand. While a New Zealand limited company can be set up quickly online, several features of NZ entity setup can make it expensive, difficult, and time-consuming: 

Doing all this usually takes months and costs upwards of $10,000 for the initial set-up. 

By contrast, New Zealand EOR solutions have no initial set up cost (other than an employee onboarding fee). And because they already have all the necessary tax and employer registrations, your NZ EOR solution can be operational within 24 hours. 

The New Zealand Employer of Record will handle all hiring tasks, onboarding, payroll management, benefits administration, and other HR-related responsibilities. They assume the role of the legal employer on the client company’s behalf, taking on all the legal obligations and ensuring compliance with New Zealand laws. 

Working with an EOR may be more cost-effective for companies testing the New Zealand market or those managing small teams.

EOR providers typically charge on a fee-based arrangement without any initial set-up costs (other than a one-off onboarding fee). However, legal entities require substantial spending on the initial investment and entity maintenance. This option may be more economical for large-scale companies planning long-term operations in New Zealand.

Using an Employer of Record in New Zealand

How does working with an EOR in New Zealand actually work? When you engage an EOR and let it know who you want to hire, it will generate contracts through its own entity in New Zealand. This entity will enter into contracts with your workers, becoming their legal employer in the country while you take the role of the worksite employer.

The EOR manages HR for your Kiwi workers while you manage their tasks and daily schedules. It also takes on responsibility for complying with all New Zealand tax and employment laws, which greatly reduces your risk. The EOR effectively administers your employees so that you can stay focused on your core business activities.

New Zealand Employer of Record
New Zealand’s stable economy and progressive labor laws make it a prime location for businesses seeking reliable Employer of Record services.

The functions that EORs take responsibility for include:

  • Payroll: Payroll is a difficult function even in your own country, but processing it correctly under a different tax and legal regime is even more of a challenge. Luckily, your EOR will manage all aspects of payroll for you. You’ll need to provide it with each employee’s time and attendance data for each pay period. With that information, it calculates gross salaries, tax withholdings, and deductions, then pays your employees their net salaries. It also keeps payroll records and uses these to report to the authorities as needed.
  • Benefits administration: The EOR will also manage the mandatory benefits that you must provide for your workers. These can include benefits like paid time off (PTO) and superannuation (pension) contributions. The EOR will keep track of employee entitlements and payments as necessary. You also have the option to provide supplementary benefits to your employees, and your EOR can help manage these as well. It will normally connect you with private insurance or pension providers and charge an additional fee to administer these extra programs.
  • Taxes and contributions: All New Zealand employers must withhold personal income tax contributions from their employees based on their estimated tax burden for the year. The EOR will calculate these taxes as part of processing payroll. It will then withhold them and remit them to the Inland Revenue Department (IRD), also known as Te Teri Taake in Maori.
  • Contracts: EORs create contracts and sign them directly with your workers. They generally use templates that are checked by legal experts to ensure their compliance. They also work with you to set salary and benefits levels that are appropriate and attractive for New Zealanders.
  • Terminations: As the legal employers of your workers, the EOR is also the party that has to legally terminate them in case you need to dismiss or lay off workers. They look at the reasons you have for termination and calculate notice periods and severance payments if they are required.
  • Compliance: The EOR is the legal employer of your workers in New Zealand and, as such, is responsible for maintaining compliance with the country’s tax and employment laws. If these laws change, the EOR must also update workers’ conditions and entitlements accordingly. It also reports regularly to the authorities as required.
  • Recruitment: While many EORs leave recruitment entirely up to their clients, a few offer services to help them source local talent. Some EORs employ recruiters for this purpose, while others simply provide their clients with tools like access to job boards and talent pools to help them perform their own recruitment function more effectively.

How Much Does a New Zealand Employer of Record Cost?

New Zealand EOR services pricing usually starts from around $599 per employee per month.

This is more expensive than in some other countries (where it can cost as little as $299 per month), reflecting the expense of complying with New Zealand labor law and the relatively high cost of doing business there. 

To ensure that you don’t overpay for your NZ EOR services, check that the pricing is clearly itemized in your EOR contract and look for any additional costs, such as EOR security deposits.  

Employment and Labor Laws in New Zealand

New Zealand’s legal history stretches back to the British constitutional law and Maori customary law. This country has developed a rich body of legislation that protects the rights of both workers and employers, especially focused on the Employment Relations Act 2000 and the Employment Standards Legislation Act 2016. This body of law lays out the minimum entitlements of New Zealand workers, and while your EOR would handle compliance with the statutes, it’s useful to know what you need to provide as an employer.

Employment Contract Requirements

Employers must provide their employees with written employment agreements (contracts). These agreements can be individual or collective employment agreements if used in industries that are subject to collective bargaining. These contracts must include:

  • Names of both parties
  • Job title and outline of duties
  • Work start date
  • Duration (for fixed-term contracts)
  • Place of work
  • Hours of work
  • Pay rates (regular, overtime, public holidays)
  • Trial period (if applicable)
  • Leave entitlements
  • Termination conditions (valid reasons, notice periods, and severance pay if applicable)

Fixed-term contracts are allowable but must have a valid reason (seasonal work, replacing a worker, completing a project, etc.). The end date of a fixed term must be included in a worker’s contract.

Working Hours

New Zealand employees generally work 40 regular hours per week, often on a schedule from 8:00 am to 4:00 pm or 9:00 am to 5:00 pm. Workers on 8-hour days are also entitled to two ten-minute breaks and an unpaid 30-minute lunch break, while those working at least six hours must receive one ten-minute break and an unpaid 30-minute lunch.

Overtime 

In some cases, employers can include availability clauses in contracts that require employees to be available to perform overtime when required. If not, employees may refuse overtime hours. There is no mandatory overtime rate set by the government, which means that this extra compensation must be agreed upon in employee contracts.

Trial and Probation Periods 

New Zealand allows for both trial and probationary periods for new employees, both of which must be paid at least according to minimum standards.

Trial periods are limited to a maximum of 90 days and can only be used if the employee has never worked for the employer before. During the trial, the employee is not protected against unfair dismissal, effectively making this an at-will employment period.

Probationary periods can be used for new employees or those taking on new roles with the same employer. There is no limit on their length, but employees must be given fair reasons for dismissal during these periods.

Learn more about probation period in New Zealand

Payroll and Employment Taxes in New Zealand

Fiscal Year

Most businesses in New Zealand follow the government’s accounting and tax year that starts April 1 and ends March 31.

Payroll Cycle

Pay periods are not mandated in New Zealand, but employees are normally paid weekly, bi-weekly, or monthly. They normally receive their pay on the same day of the week, which must be a regular work day.

Minimum Wage

The minimum wage in New Zealand was increased to 23.50 NZD (New Zealand dollars)/hour (around 14.00 USD) on April 1, 2025. The starting-out and training minimum wage rates also increased to 18.80 NZD /hour (around 11.00 USD).

Bonus Payments

Thirteenth-month bonuses are not mandatory in New Zealand. Companies often use bonuses to incentive their workers, and these bonuses are taxed as part of each worker’s gross earnings.

Employer Tax Contributions

Employers in New Zealand contribute as little as 3.02% of their employees’ gross earnings to three programs, ACC, KiwiSaver, and ESCT.  

  • ACC: The ACC is the Accident Compensation Corporation levy, which is essentially workers’ compensation insurance. As an employer, you’ll need to pay a levy based on the risk of your industry, with a possible range from 0.02% to 2.60% of workers’ pay.
  • KiwiSaver: Employers must pay a minimum contribution of 3% of their employees’ earnings to the KiwiSaver retirement program. There is no upper limit on contributions, but they are taxed by the ESCT.
  • ESCT: The ESCT is the Employer Superannuation Contribution Tax and is levied on employers’ contributions toward the national KiwiSaver retirement plan or other qualified plans. Employers pay contributions based on their workers’ salaries and ESCT contributions for the previous year:
Salary Plus Superannuation ContributionsESCT Rate
Not more than 16,800 NZD10.5%
16,801 to 57,600 NZD17.5%
57,601 to 84,000 NZD30.0%
84,001 to 216,000 NZD33.0%
More than 216,000 NZD39.0%

Employee Payroll Contributions

Employees in New Zealand don’t need to pay social security taxes. However, they do pay contributions to ACC of 1.67% of earnings in 2025 (this will increase to 1.75% on April 1, 2026). They also contribute a part of their earnings to their KiwiSaver superannuation. They can choose from 3%, 4%, 6%, 8%, or 10% contributions.

Individual Income Tax Contributions

Employers in New Zealand have to calculate and withhold personal income tax from their employees’ paychecks on a pay-as-you-earn (PAYE) basis. They follow the country’s progressive tax rates:

Taxable Income (NZD)Tax Rate
0 – 15,60010.5%
15,601 – 53,50017.5%
53,501 – 78,10030.0%
78,101 – 180,00033.0%
Over 180,00039.0%

Time Off and Leave in New Zealand

Mandatory Leave Entitlement

Employees in New Zealand are entitled to four weeks or 20 working days of annual paid leave once they have worked for 12 months for their employers. If workers agree, they can be paid an extra 8.0% of their gross annual earnings instead of taking annual leave.

Public Holidays

Public holidays in New Zealand are paid days off if they fall on a day that employees would normally work. However, if employees work on public holidays, they must receive at least time-and-a-half (150% of their normal compensation) and receive an alternative holiday as well. There are 11 public holidays in the country, including:

  • New Year’s Day (January 1)
  • Day After New Year’s Day (January 2)
  • Waitangi Day (February 6)
  • Good Friday (date varies)
  • Easter Monday (date varies)
  • Anzac Day (April 25)
  • King’s Birthday (June 2)
  • Matariki (June 20)
  • Labour Day (October 27)
  • Christmas Day (December 25)
  • Boxing Day (December 26)

Sick Leave

Employees who have worked for at least six months are entitled to ten days per year of sick leave. Unused sick leave can be carried over to the next year, but employees can’t accumulate more than 20 days.

Parental Leave

Pregnant mothers can take up to ten days of unpaid leave for doctor’s appointments and scans. They are also entitled to 26 weeks of maternity leave paid by the government. This also applies in the case of the adoption of a child under the age of six.

Partners and spouses of birth mothers can also take one week of unpaid carer’s leave if they’ve worked for at least six months, and two weeks if they’ve worked for an employer for at least a year. Parents can also take as many as 52 weeks of unpaid extended leave if they’ve worked for at least 12 months – they can share this leave between them.

Bereavement Leave

Workers who’ve worked for at least six months are entitled to three days of bereavement leave.

Family Violence Leave

Employees in New Zealand can take up to ten days of leave if they or a child living with them is subject to violence.

Terminations and Severance in New Zealand

Termination

In New Zealand, employment agreements can be terminated for several reasons. They can be ended by mutual consent or by the employee resigning or retiring. Employees can also lose their jobs due to redundancy or dismissals for a number of reasons, like gross misconduct or poor performance. However, all workers except for those on trial periods must be given good reasons to justify their terminations and are protected against unfair dismissal.

Notice Periods

If the employer has a case for gross misconduct, they do not have to provide the employee with notice but instead can dismiss them outright. Otherwise, however, notice must be given by either party of an employment agreement. Notice is normally the same for employees and employers and should be written into contracts. 

The lengths of notice periods aren’t mandated, but they must be fair and reasonable, which generally means between two and four weeks. Employers can waive some of the notice period they get from employees if they so choose. They may also let employees take annual leave during their notice periods. If the employer is dismissing a worker, they may also choose to offer them payment in lieu of notice.

Severance and Redundancy Pay

New Zealand doesn’t mandate severance pay across the board. However, if severance is written into employee contracts, employers are obligated to provide it whether they are dismissed (for reasons other than gross misconduct) or redundancy. The amount of severance given is generally related to the amount of time the employee has worked for the employer.

Why Hire in New Zealand with an EOR

While working with an EOR isn’t the only option available for foreign firms looking to hire employees in New Zealand, it may be their best option because of the advantages it provides, such as:

  • Compliance: New Zealand has strict employment and tax laws, and organizations that aren’t familiar with these laws can struggle with compliance and face penalties. An EOR helps you to maintain compliance and reduce your risk.
  • Stability: New Zealand has a strong, stable democracy that ranked fourth in the world in transparency in 2024. The World Bank has also consistently ranked the country highly in terms of ease of doing business.
  • Remote Work: New Zealand is a relatively remote cluster of islands with soaring mountain ranges that paint a picturesque backdrop for remote work. This is fast becoming the norm in the country, which means New Zealanders are quickly learning how to work effectively with employers located elsewhere
  • Educated, Skilled, and Diverse Workers: New Zealand’s labor force is highly skilled and well-educated. The country brings together European and Pacific Islander cultures and has also welcomed migrants from around the world to create a diverse and constructive society.

How to Choose an EOR in New Zealand

If you’re seriously interested in hiring employees in New Zealand through an EOR, it pays to find a provider that you can rely on. With so many options available, focus on choosing an EOR that’s:

Experienced

If a provider doesn’t have specific experience working with the laws and systems in place in New Zealand, it will struggle to provide you with compliant services.

Affordable

EORs charge fees to manage your New Zealand workers. While some are reasonable, others start out sky-high and only increase from there with the addition of optional add-ons. Set your budget and look for a provider you can afford.

Comprehensive

While all EORS offer similar basic services, only some will let you add the additional services you need, like supplementary benefits administration and recruitment. Look for a provider that offers everything you require at a price that fits your budget.

Expand into New Zealand Easily with Remote People’s Employer of Record in New Zealand

Remote People offers professional Employer of Record (EOR) services to help your business hire and manage talent in New Zealand efficiently and compliantly. Our team connects you with a reliable, cost-effective solution tailored to your organization’s needs—so you can focus on growth while we handle the complexity of local employment. Contact Remote People today to get started.