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.

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.

Learn more about Employer of Record services

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.

Learn about hiring contractors in New Zealand

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.

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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.

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.

Good Faith Employment

New Zealand’s Employment Relations Act 2000 is built on the principle of good faith, which applies to all aspects of the employment relationship. Both employers and employees are required to be active and constructive in maintaining a productive working relationship, responsive and communicative with each other, and must not mislead or deceive the other party.

Good faith obligations carry particular weight during restructuring, performance management, and termination. Failing to act in good faith during these processes is one of the most common grounds for a successful personal grievance claim in New Zealand, and employers should treat it as a substantive legal requirement rather than an abstract principle.

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 must be based on genuine grounds, such as project completion, parental leave cover, seasonal work, or a role dependent on external funding. The reason and end date must be clearly stated in the contract. Fixed-term employees are entitled to the same minimum entitlements as permanent employees.

Repeated use of fixed-term contracts without genuine justification may lead the Employment Relations Authority to deem the relationship an indefinite employment arrangement.

Working Hours

The standard working week in New Zealand is 40 hours, typically structured as 8-hour days from Monday to Friday. Employees are entitled to paid rest breaks and an unpaid meal break depending on the length of their shift.

Breaks must be taken at reasonable times. Where the nature of the work makes fixed break times impractical, the employer must provide reasonable alternative arrangements.

Source: Employment Relations Act 2000.
Hours WorkedPaid Rest BreaksUnpaid Meal Break
2 to 4 hours1 x 10 minutesNone
4 to 6 hours1 x 10 minutes1 x 30 minutes
6 to 8 hours2 x 10 minutes1 x 30 minutes
8+ hoursAdditional breaks proportionally1 x 30 minutes

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 both trial and probationary periods, both of which must meet minimum employment standards.

Trial periods are capped at 90 days and are only available to employers with fewer than 20 employees. The employee must not have previously worked for the employer, and the agreement must be in writing before employment begins. During a trial period, the employee cannot bring a personal grievance for unjustified dismissal.

Probationary periods have no statutory time limit and are available to all employers. Employees retain full employment rights throughout, including protection against unjustified dismissal. A fair process and genuine reasons are required before any dismissal during probation.

Payroll and Employment Taxes in New Zealand

Fiscal Year

New Zealand’s standard tax year runs 1 April to 31 March. This affects payroll tax calculations, minimum wage changes (effective 1 April), and ACC levy adjustments. All PAYE and employer obligations follow this fiscal calendar. Businesses may apply for a non-standard balance date for financial reporting, but payroll obligations always follow the April-March cycle.

Minimum Wage

The national minimum wage is NZD 23.50 per hour from 1 April 2025, rising to NZD 23.95 per hour from 1 April 2026, a 2% increase affecting approximately 122,500 workers. At a standard 40-hour week, this equates to approximately NZD 4,076 per month. Starting-out and training rates follow the same schedule, moving from NZD 18.80 to NZD 19.16 per hour in April 2026. The minimum wage is reviewed annually.

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

Employer contributions in New Zealand span three programs: ACC, KiwiSaver, and ESCT.

The ACC Work Account levy funds workplace injury cover and is paid annually based on the employer’s industry Classification Unit. Low-risk industries such as office work attract lower rates, while high-risk sectors such as forestry and construction pay more. Experience-rated adjustments may apply based on claims history. The average rate is $0.66 per $100 of payroll in 2025/26, rising to $0.69 in 2026/27 and $0.72 in 2027/28.

Employers must contribute a minimum of 3% of gross earnings to KiwiSaver for all enrolled employees. New employees are automatically enrolled but may opt out within 8 weeks. All employer KiwiSaver contributions are subject to ESCT, calculated on the employee’s total remuneration from the prior tax year.

Salary Plus Superannuation Contributions ESCT Rate
Not more than 16,800 NZD 10.5%
16,801 to 57,600 NZD 17.5%
57,601 to 84,000 NZD 30.0%
84,001 to 216,000 NZD 33.0%
More than 216,000 NZD 39.0%

Employee Payroll Contributions

Employees in New Zealand do not pay social security tax but are subject to two key deductions.

The ACC earners’ levy funds New Zealand’s no-fault accident insurance scheme, covering workplace and non-workplace injuries, medical treatment, and up to 80% of usual earnings during incapacity. The levy is deducted via PAYE and is inclusive of GST. For the 2025/26 tax year (1 April 2025 to 31 March 2026), the rate is 1.67% of gross earnings, capped at maximum liable earnings of NZD 152,790. From 1 April 2026, the rate increases to 1.75%, with a revised earnings cap of NZD 156,641.

KiwiSaver is New Zealand’s voluntary superannuation scheme. Employees choose their own contribution rate from five options: 3%, 4%, 6%, 8%, or 10% of gross earnings. Employers are required to contribute a minimum of 3% on top of the employee’s contribution.

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 are entitled to 4 weeks (20 working days) of paid annual leave after 12 months of continuous employment with the same employer.

In limited circumstances, employees may agree to receive 8% of gross earnings as a pay-as-you-go annual leave payment instead of accruing leave days. This arrangement is only available where the employment agreement provides for it and the employee works intermittently or on a fixed-term contract of less than 12 months. It cannot be used as a standard arrangement for regular employees to avoid providing actual leave entitlements.

Public Holidays

New Zealand observes 11 public holidays per year. Public holidays that fall on a day an employee would normally work are paid days off. Employees required to work on a public holiday must be paid at least time-and-a-half and are entitled to an alternative holiday in lieu.

Where a public holiday falls on a weekend, it is observed on the following Monday. In 2026, Anzac Day (25 April) falls on a Saturday and is observed on Monday 27 April. Boxing Day (26 December) falls on a Saturday and is observed on Monday 28 December.

  • New Year’s Day (1 January)
  • Day After New Year’s Day (2 January)
  • Waitangi Day (6 February)
  • Good Friday (variable)
  • Easter Monday (variable)
  • Anzac Day (25 April, observed 27 April in 2026)
  • King’s Birthday (1 June 2026, first Monday in June)
  • Matariki (10 July 2026, variable Friday in June or July)
  • Labour Day (26 October 2026, fourth Monday in October)
  • Christmas Day (25 December)
  • Boxing Day (26 December, observed 28 December in 2026)

Where Waitangi Day or Anzac Day falls on a Saturday or Sunday and the employee does not normally work that day, the public holiday transfers to the following Monday. This is known as Mondayisation. In 2026, Anzac Day (25 April, Saturday) is observed on Monday 27 April, and Boxing Day (26 December, Saturday) is observed on Monday 28 December.

Other public holidays falling on weekends are not automatically Mondayised. Whether an employee is entitled to the holiday depends on whether that day would normally be a working day for them.

Sick Leave

Employees are entitled to 10 days of paid sick leave per year after 6 months of employment, with an additional 10 days granted on each subsequent work anniversary. Unused sick leave carries forward, subject to a maximum balance of 20 days at any time.

Sick leave may be used for the employee’s own illness or injury, or to care for a dependent including a spouse, child, or any person who depends on the employee. Employers may request a medical certificate after 3 consecutive calendar days of absence.

Parental Leave

Pregnant employees are entitled to up to 10 days of unpaid leave for antenatal appointments and scans. Primary carers, including birth mothers and adoptive parents of children under 6, are entitled to 26 weeks of paid parental leave funded by the government, not the employer. The maximum weekly payment is NZD 788.66 for the period 1 July 2025 to 30 June 2026.

To qualify for the 26 weeks of paid leave, the employee must have worked an average of at least 10 hours per week for a minimum of 6 months with the same employer. Employees with 12 or more months of service also become eligible for extended leave. The paid leave entitlement may be transferred to a spouse or partner where both meet the eligibility criteria.

Partners and spouses of the primary carer are entitled to 1 week of unpaid partner’s leave after 6 months of service, or 2 weeks after 12 months. Partner’s leave itself is unpaid, however partners can receive paid parental leave payments if the primary carer transfers the entitlement to them. Parents who have worked at least 12 months may additionally take up to 52 weeks of unpaid extended leave, which can be shared between them.

Bereavement Leave

Employees with at least 6 months of service are entitled to 3 days of paid bereavement leave upon the death of a spouse or partner, parent, child, sibling, grandparent, grandchild, or spouse’s parent. One day of paid leave applies for the death of any other person where the employer accepts that a close relationship existed. The employer may request proof of bereavement in either case.

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

Employment in New Zealand can end by mutual agreement, resignation, retirement, redundancy, or dismissal. All employees, except those on a 90-day trial period, are protected against unjustified dismissal and must be given substantive reasons for termination. Employers must follow a fair process regardless of the grounds.

Redundancy must be based on a genuine business reason such as restructuring, downsizing, or closure. The employer must provide written notice of the proposal, consult with affected employees, and genuinely consider alternatives before proceeding. Reasonable notice must be given. Redundancy pay is not a statutory requirement unless it is specified in the employment agreement, in which case it must be honoured regardless of the employer’s financial position.

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.

Frequently Asked Questions

No. An Employer of Record allows you to hire compliantly in New Zealand without registering a local entity. The EOR acts as the legal employer, managing contracts, payroll, KiwiSaver, ACC levies, and statutory entitlements on your behalf.

The 90-day trial period allows employers to dismiss an employee without risk of a personal grievance claim for unjustified dismissal. It is only available to employers with fewer than 20 employees, the employee must not have previously worked for the employer, and the agreement must be in writing before employment begins. Probationary periods remain available to all employers but carry full dismissal protections.

Redundancy must be based on a genuine business reason. Employers must provide written notice of the proposal, consult with affected employees, and genuinely consider alternatives before proceeding. Redundancy pay is not a statutory requirement unless it is specified in the employment agreement, in which case it must be honoured regardless of the employer's financial position.

Good faith is a core legal obligation under the Employment Relations Act 2000. Both parties must be active, constructive, and transparent in their employment relationship. It is not merely a best practice. Failing to act in good faith, particularly during restructuring, performance management, or termination, is one of the most common grounds for a successful personal grievance claim.

Employees are entitled to 10 days of paid sick leave per year after 6 months of employment, with an additional 10 days on each work anniversary. Unused sick leave carries forward up to a maximum balance of 20 days. Sick leave can be used for the employee's own illness or to care for a dependent. A medical certificate may be requested after 3 consecutive days of absence.

On top of gross salary, employers must contribute a minimum of 3% to KiwiSaver for enrolled employees, subject to ESCT. The ACC Work Account levy adds an industry-dependent cost averaging $0.69 per $100 of payroll in 2026/27. Taken together, total employer costs typically add 5% to 8% above gross salary, making New Zealand relatively cost-efficient compared to many other developed markets.