An Employer of Record (EOR) in New Zealand is a company that takes on the responsibility of being the legal employer for a worker. This includes managing payroll, benefits, and other employment-related tasks on behalf of the worker's actual employer.
Discover the key considerations and essential details you should be aware of before you hire your remote team in New Zealand.
On this page: Facts About New Zealand | Employment Agreements | Employment Laws | Social Security Contributions | Personal Income Tax | Work Permits | Employee Benefits
Facts About New Zealand
New Zealand’s startup ecosystem is gaining global recognition, with cities like Auckland, Wellington, Christchurch, and Tauranga emerging as key innovation hubs. Each city has carved out niche strengths across sectors such as software, fintech, aerospace, and sustainability, attracting entrepreneurs and investors alike.
- Auckland is New Zealand's top startup ecosystem, ranked 4th in Australia and Oceania and 115th globally. With a population between 1 to 2 million, the city attracts startups primarily in Transportation, Software & Data, and Energy & Environment, which together account for 49% of its startup activity. MEGA Privacy is among its standout success stories.
- Wellington ranks second nationally, 8th in the region, and 276th worldwide. Despite a smaller population of 0.1 to 0.5 million, it is a vibrant hub for Fintech, Software & Data, and Social & Leisure startups, making up 74% of the local ecosystem. Sharesies is one of its leading startups.
- Christchurch ranks 10th in Australia and Oceania and 324th globally. Also home to 0.1 to 0.5 million residents, it specializes in Energy & Environment, Foodtech, and Software & Data, which represent 58% of local startup activity. Dawn Aerospace is a prominent name from the city.
- Tauranga is New Zealand’s fourth-ranked startup ecosystem, 14th in the region and 590th globally. With a similar population range, the city is gaining traction in Software & Data, Hardware & IoT, and Ecommerce & Retail, which together form 59% of its startup landscape. Carepatron is a key local success.
- Notable startups across New Zealand include MEGA Privacy (Auckland), Sharesies (Wellington), Dawn Aerospace (Christchurch), and Carepatron (Tauranga), reflecting the country's growing global presence in cloud storage, fintech, aerospace, and healthcare SaaS.
Employment Agreements in New Zealand
Every employee must have a written employment agreement. This can be either:
- An individual employment agreement between you and the employee, or
- A collective agreement if the employee is a union member.
Legal Obligations:
- Not providing a written agreement can result in an infringement fee of $1,000.
- The Employment Relations Authority may also impose penalties of up to $10,000 for an individual employer or $20,000 for a company.
You must also:
- Keep a copy of the signed agreement or current terms and conditions of employment.
- Provide a copy to the employee on request.
- Retain the intended agreement, even if it hasn't been signed yet.
- Ensure the agreement meets all legal requirements, including mandatory terms like hours of work, pay, and notice periods.
All employees in New Zealand are entitled to minimum rights under the law—such as the minimum wage, paid annual holidays, sick leave, and public holidays—regardless of what’s stated in their employment agreement. These rights are non-negotiable and cannot be reduced or traded for other benefits. Even if something less favourable is written in the agreement, the legal minimum always applies.
New Zealand offers a freeEmployment Agreement Builder to help employers create legally compliant, customized employment agreements. It includes required clauses and useful guidance to ensure you meet all legal obligations.
As of 30 March 2025, New Zealand employers are legally required to keep and have easy access to copies of their employees’ employment agreements. If an employee requests a copy, the employer must provide it within 7 working days. This new requirement strengthens existing obligations, but all other employment agreement rights and responsibilities remain unchanged.
Employment Laws in New Zealand
New Zealand’s employment laws are designed to ensure fair and safe working conditions for both employees and employers. They set out minimum rights, responsibilities, and protections in areas such as employment agreements, wages, leave entitlements, trial periods, termination, and dispute resolution.
Minimum Wages
Minimum wage rates apply to all employees aged 16 and over. These rates are before tax and reviewed annually.
|
Type |
Per Hour |
8-hour Day |
40-hour Week |
80-hour Fortnight |
|
Adult |
$23.50 |
$188.00 |
$940.00 |
$1880.00 |
|
Starting-out |
$18.80 |
$150.40 |
$752.00 |
$1504.00 |
|
Training |
$18.80 |
$150.40 |
$752.00 |
$1504.00 |
Who Gets What?
- Adult rate: Applies to employees aged 16 or older, unless they fall under starting-out or training categories.
- Starting-out wage: Applies to employees under 20 in specific situations (e.g., less than 6 months’ experience with the employer).
- Training wage: Applies to employees 20 or older doing at least 60 credits of industry training as part of their job.
Working Hours
Employment agreements in New Zealand must set a maximum of 40 hours per week (excluding overtime), unless the employer and employee agree otherwise. If fewer than 40 hours are agreed, the hours should be arranged to fall over no more than five days per week, wherever reasonably possible.
Overtime
Overtime or extra shift pay must be agreed upon by both the employer and employee and clearly stated in the employment agreement. It can be included as part of a salary or paid separately at the employee’s normal or higher rate, but must always be at least the minimum wage.
Trial vs Probationary Periods
Employers in New Zealand can include either a trial period or a probationary period in an employment agreement to assess an employee’s suitability for a role—but not both. These must be agreed to in writing before the employee starts work to be legally valid.
Trial Periods
- Maximum Length: Up to 90 days (must specify exact duration, e.g. 30, 60, or 90 days).
- Eligibility: Only for employees who have never worked for the employer before.
- Dismissal: The employer can dismiss the employee without giving a reason, and the employee cannot bring a personal grievance for unjustified dismissal.
- Agreement Requirements: Must be written in the employment agreement before the employee starts work, clearly stating the trial period, its length, and the associated conditions.
Probationary Periods
- Length: No legal limit, but must be reasonable based on the role and circumstances.
- Eligibility: Can be used for new hires or existing employees changing roles.
- Dismissal: The employer must give a valid reason and a fair opportunity for the employee to improve before dismissal.
- Agreement Requirements: Must be clearly written in the employment agreement, with the length specified. Verbal agreements are not enforceable.
Notice Period
If an employment agreement does not specify a notice period, employers must give fair and reasonable notice when ending employment. This should take into account:
- the employee’s length of service\
- the type of job
- the time needed to find a replacement
- the usual practice in the workplace
In most cases, a notice period of 2 to 4 weeks is considered fair and reasonable, depending on the role.
Severance Pay
In New Zealand, severance pay is not legally required unless it is:
- Explicitly stated in the individual or collective employment agreement, or
- Negotiated between the employer and employee at the time of termination.
Unless such terms exist, employers are not obligated to provide severance pay. It is considered a voluntary or contractual benefit, not something the employee automatically earns through regular work.
However, employers are legally required to pay final pay to all employees when employment ends. This must be made on or before the next scheduled payday after the employee’s last day and must include:
- Wages through the end of the notice period (if applicable)
- Payment for all hours worked since the last payday
- Accrued annual leave, public holidays, and alternative holidays
- Any contractually agreed payments, such as bonuses or commissions
In short, final pay is mandatory and reflects what the employee has already earned, while severance pay is optional unless agreed upon in writing.
Personal Income Tax in New Zealand
In New Zealand, tax residency rules determine how income is taxed. Individuals who are considered tax residents are subject to tax on their worldwide income, while non-residents are only taxed on income sourced within New Zealand. The country uses a progressive tax system, which means that higher income levels are taxed at higher marginal rates. However, income is taxed in brackets, so the first dollar earned is taxed at the lowest applicable rate, not at the highest rate for your total income. Tax is levied on all types of earnings, including employment income, business profits, investment returns, and other forms of income, depending on the person’s residency status.
Updated Personal Income Tax Rates (Effective 31 July 2024)
|
Taxable Income (NZD) |
Marginal Tax Rate (%) |
|
$0 – $15,600 |
10.5% |
|
$15,601 – $53,500 |
17.5% |
|
$53,501 – $78,100 |
30.0% |
|
$78,101 – $180,000 |
33.0% |
|
Over $180,000 |
39.0% |
These new brackets replace the previous thresholds which ended at $14,000, $48,000, and $70,000 respectively.
Work Permit in New Zealand
In New Zealand, employing foreign nationals requires the appropriate work visas or permits, depending on the role, duration, and the worker’s circumstances. Below are the key work visas relevant to hiring foreign employees:
Accredited Employer Work Visa (AEWV)
This is the primary visa for most foreign workers in New Zealand. To hire someone under this visa, the employer must be accredited by Immigration New Zealand. The job must either appear on the Green List (a list of high-demand occupations) or pass a labour market test to show there are no suitable New Zealanders available. The AEWV can be granted for up to three years and may allow family members to accompany the visa holder.
Partner of a Worker Work Visa
This visa allows the partner of a person holding a valid work visa (such as the AEWV) to also work in New Zealand. In some cases, the work rights are open, meaning the visa holder can work for any employer in any role.
Working Holiday Visa
This visa is available to citizens of specific countries aged between 18 and 30 or 35, depending on the country. It allows holders to travel and work in New Zealand for a limited time, typically up to 12 months. This visa is usually used for short-term or seasonal work.
Specific Purpose or Event Work Visa
This visa is granted for completing a specific job or project within a set timeframe—such as participating in a business event, installing machinery, or handling a time-bound assignment. The duration of stay depends on the length of the project.
Post-Study Work Visa
This visa is available to international students who have completed an eligible qualification in New Zealand. It allows the holder to stay and work in the country for up to three years, usually with open work rights that do not require a job offer or sponsorship.
Hiring foreign workers in New Zealand requires compliance with immigration laws, including visa eligibility, job advertising requirements, and minimum employment standards. Employers must ensure they meet all legal obligations before offering employment to a non-citizen.
Employee Benefits in New Zealand
New Zealand’s employee benefits system is unique, relying on targeted schemes rather than a broad social security framework. While certain benefits like retirement savings contributions through KiwiSaver and accident coverage via the ACC scheme are mandatory, many employers—especially in competitive industries—also offer supplementary benefits such as income protection, life insurance, private medical cover, and wellbeing programs. Together, these benefits ensure employees receive financial security, health support, and workplace wellbeing.
Mandatory Benefits
|
Benefit |
Description |
|
KiwiSaver |
A voluntary retirement savings scheme for employees aged 18–65. While enrollment is optional for employees, employers are legally required to contribute at least 3% of gross salary for enrolled members. These contributions are subject to Employer Superannuation Contribution Tax (ESCT). |
|
Accident Compensation Scheme (ACC) |
A universal no-fault insurance scheme that covers accidental injuries for citizens, residents, and even temporary visitors. Employers pay ACC levies, and the program is managed by the Accident Compensation Corporation. It covers medical treatment, rehabilitation, and compensation for lost income. |
Supplemental Benefits (Common in Competitive Sectors)
|
Benefit |
Description |
|
Group Life / TPD Insurance |
Provides financial support to an employee’s family in case of death or permanent disability. Typical coverage is 3–4× annual salary, fully funded by the company. |
|
Group Income Protection |
Offers 75% of base salary as income replacement if the employee becomes ill or injured. Plans may include a 30-day waiting period and benefits lasting up to 5 years or age 65. Fully employer-funded in upper-tier plans. |
|
Group Private Medical Insurance |
While New Zealand has a robust public health system, companies often provide private health plans with hospital, GP, dental, and optical coverage. Companies may fund 100% of employee cover and 75–100% of family cover, depending on plan competitiveness. |
|
Employee Assistance Programs (EAP) |
EAPs provide confidential counseling and mental health support. Many programs are app-based, offering 24/7 access and data-driven reporting for employers. |
|
Holistic Wellbeing Solutions |
Includes programs addressing physical, mental, financial, and social wellness — e.g., annual health checks, flu shots, skin screenings, financial seminars, wellbeing days, and mental health events. |
Working with an Employer of Record (EOR) in New Zealand is a smart solution for companies seeking to hire employees locally without setting up a legal entity. The EOR manages all employment-related responsibilities, including payroll, taxes, KiwiSaver contributions, ACC levies, work permits, employment contracts, and compliance with New Zealand’s labor laws. The country’s employment framework includes mandatory benefits like retirement savings and accident compensation, as well as entitlements such as paid leave and public holidays—all of which the EOR oversees to ensure full compliance and reduce legal risk. This enables businesses to hire New Zealand-based or foreign talent efficiently while minimizing administrative effort. With its stable economy, skilled workforce, and supportive regulatory environment, New Zealand offers an ideal setting for global expansion through a trusted EOR partner.
Social Security Contributions in New Zealand
New Zealand does not have a traditional social security system like many countries. Instead, it relies on targeted, tax-funded schemes that cover retirement savings, accident insurance, and fringe benefits. These are primarily funded through:
KiwiSaver (Voluntary Retirement Savings)
KiwiSaver is a voluntary, workplace-based savings scheme for New Zealand residents aged 18 and over. It is designed to help employees save for retirement.
ESCT (Employer Superannuation Contribution Tax)
Employers pay ESCT on their contributions to KiwiSaver and other registered superannuation funds. ESCT is deducted at source and paid to Inland Revenue.
ESCT Rates Based on Total Earnings (Salary + Employer Contribution):
Annual Earnings (NZD)
ESCT Rate (%)
$0 – $16,800
10.5%
$16,801 – $57,600
17.5%
$57,601 – $84,000
30%
$84,001 – $216,000
33%
Over $216,000
39%
Note: Income thresholds are reviewed regularly and may be adjusted.
ACC Levies (Accident Compensation Corporation)
ACC provides no-fault accident insurance to all New Zealanders. It is funded by levies paid by employers, employees, and the self-employed.
Rates vary by industry classification and income, and are reviewed annually.
FBT (Fringe Benefit Tax)
Employers must pay FBT on non-cash benefits provided to employees, such as:
There are three rate options for calculating FBT:
1. Single Rate (Flat Rate):
Employers can use a flat rate of 63.93% for simplicity.
2. Alternate Rate Method (based on employee remuneration):
Net Remuneration (NZD)
FBT Rate (%)
Up to $13,962
11.73%
$13,963 – $45,230
21.21%
$45,231 – $62,450
42.86%
$62,451 – $130,723
49.25%
Over $130,723
63.93%
Employers may apply alternate methods such as the short-form or pooled alternate rate, depending on employee benefits and pay structure.
3. Exemptions & Thresholds:
Summary Table
Component
Who Pays
What It Covers
Mandatory?
Rates
KiwiSaver
Employer & Employee
Retirement savings
No
3% minimum each
ESCT
Employer
Tax on employer superannuation contributions
Yes (if KiwiSaver)
10.5% – 39%
ACC Levies
Employer & Employee
Workplace and non-work accident insurance
Yes
Varies by income/industry
FBT
Employer
Tax on non-cash employee benefits
Yes (if benefits given)
11.73% – 63.93%