Payroll and Benefits Guide New Zealand
Last updated: Mar 03, 2026
Contribution
| Employer Payroll Contributions | |
| 3.5% |
KiwiSaver (Pension)
|
| 1.53% of gross salary +KiwiSaver Contribution | Accident Compensation Corporation (ACC), applied on salary up to 142,283 NZD |
| 4.00% |
Total Employment Cost
|
| Employee Payroll Contributions | |
| 3.5% |
KiwiSaver (Pension)
|
| Employee Income Tax | |
|
10.5%
|
0.00 – 15,600 NZD Annually |
|
17.5%
|
15,601 NZD – 53,500 NZD Annually
|
|
30.0%
|
53,501 NZD – 78,100 NZD Annually
|
|
33.0%
|
78,1001 NZD – 180,000 NZD Annually
|
|
39.0%
|
180,000 NZD + Annually
|
Employees have the option to apply for a temporary rate reduction should they wish to lower their KiwiSaver contribution rate to 3% for a period ranging from three months up to one year.
Employer taxes
Employee taxes
Minimum Wage
The minimum wage in New Zealand is currently set at NZD 23.50 per hour for adult workers.
The minimum wage may vary for employees aged 16 to 19 years and those undergoing training.
MINIMUM WAGE (PER MONTH)
Payroll
Payroll Cycle
Payroll frequency is the employer’s choice; however, common frequencies are monthly or bi-weekly (every two weeks).
13th Salary
In New Zealand, there is no legal requirement for 13th-month payments.
Authority Payments
| Authority Payment | Dates | Methods |
|
Inland Revenue Department |
Monthly; 20th of the following month |
eCheck (Local) |
Working Hours
General
New Zealand does not have a minimum requirement. Common full-time hours are 7.5 hours to 8.0 hours per day. The number of hours worked by an employee, whether more or less than 40 hours a week, must be included in the employment contract.
Overtime
| Aspect | Regulation Details | Notes |
| Maximum Ordinary Hours | 40 hours per week (excluding overtime), unless the employer and employee agree otherwise in the employment agreement. | This is the standard maximum set by the Minimum Wage Act 1983. |
| Maximum Overtime Limit | No legal maximum limit on overtime hours. | The focus is on health and safety; employers must ensure any overtime is reasonable and does not compromise employee health (e.g., through fatigue) under the Health and Safety at Work Act 2015. |
| Overtime Definition | Overtime is any hour worked over and above the employee’s normal, agreed-upon hours as stipulated in their employment agreement. | The agreement must specify whether overtime is voluntary or compulsory and how it will be compensated. |
| Rest Periods | Employees are entitled to mandatory minimum rest and meal breaks based on the length of their shift (e.g., two 10-minute paid rest breaks and one 30-minute unpaid meal break for shifts over 6 hours). |
Overtime Pay Rates (Contractual vs. Statutory)
Compensation for overtime is determined by negotiation, with the exception of public holidays.
| Day/Condition | Statutory Minimum Rate | Total Pay Rate | Notes |
| Standard Overtime (Weekdays/Weekends) | No statutory minimum premium rate. | Normal Hourly Rate (100%) | The rate is determined solely by the employment contract or Collective Agreement. An employer can legally pay the employee their normal rate for overtime hours. |
| Public Holiday Work | 1.5 times the employee’s ordinary hourly rate. | 150% | This is the only mandatory minimum premium rate under the Holidays Act 2003. |
| Alternative Holiday (Day in Lieu) | Mandatory, in addition to the 150% pay. | N/A | If the public holiday is a day the employee would otherwise be working, they are entitled to an Alternative Holiday (day in lieu). |
Common Compensation Practice (Non-Statutory)
When overtime pay is offered, common practices outlined in employment agreements include:
-
Weekday Overtime: Time-and-a-half (150%) for the first few hours (e.g., first 3 hours), then double time (200%) thereafter.
-
Weekend Work: Double time (200%) is a common contractual rate for work on Saturdays and Sundays.
Leave
Annual Leave (vacation)
Employees are entitled to a paid annual leave entitlement of four weeks following a year of service. Unused leave will be compensated in the case of an employee’s termination.
PTO carryover
In New Zealand, statutory annual leave must be taken within 12 months after it becomes due. Unused leave does not automatically expire — it can be carried over by agreement.
For Proclosz, there is no mandatory limit on annual leave carryover, unused annual leave automatically carries over year to year with no statutory cap. Unused annual leave carries over to the next year by default.
Public Holidays
Holidays falling on weekends are moved to the next business day as a day off in lieu.
| Date | Day | Holiday | Notes |
|---|---|---|---|
| 1 January 2026 | Thursday | New Year’s Day | Standard holiday |
| 2 January 2026 | Friday | Day after New Year’s Day | Standard holiday |
| 6 February 2026 | Friday | Waitangi Day | Standard holiday |
| 3 April 2026 | Friday | Good Friday | Standard holiday |
| 6 April 2026 | Monday | Easter Monday | Standard holiday |
| 27 April 2026 | Monday | Anzac Day | Standard holiday |
| 1 June 2026 | Monday | King’s Birthday | Standard holiday |
| 19 June 2026 | Friday | Matariki | Standard holiday |
| 26 October 2026 | Monday | Labour Day | Standard holiday |
| 25 December 2026 | Friday | Christmas Day | Standard holiday |
| 28 December 2026 | Monday | Boxing Day | Standard holiday |
Sick Days
The New Zealand Parliament passed the Holidays Amendment Bill to increase the minimum employee sick leave entitlement from five to 10 days per annum, after six months of continuous employment with their employer.
Employees are only able to carry over 10 unused sick days each year to add to their annual entitlement up to a maximum of 20 days of current entitlement in any year. This applies to full-time, part-time, and fixed-term employees, where that fixed term is longer than six months.
A casual employee will also be entitled to sick leave where they have six months’ current continuous employment with the same employer, or they have worked for the employer for six months for an average of 10 hours per week, and at least one hour every week or 40 hours in every month. Sick leave is not to be pro-rated in any way.
Maternity Leave
In New Zealand, maternity leave is known as primary carer leave and is available to: Female employees who are having a baby, their spouse or partner, and employees who are going to have the primary responsibility for the care, development, and upbringing of a child under six years permanently; this may for example be through adoption, but it does not include foster care or other temporary care basis. If the employee has a spouse or partner, they may choose who will be the primary carer.
Pregnant employees are entitled to 26 weeks of primary care leave and are paid their regular weekly salary up to a maximum of 712.17 NZD (from 1/7/2023 to 30/6/2024).
Primary carer leave starts on the due date, or the child’s birth if the child is born to the employee. In any other case, primary carer leave starts when the employee becomes the primary carer in respect of the child.
The employee can start their primary carer leave up to six weeks (or earlier with the employer’s consent) before the baby’s due date or when the employee will become the child’s primary carer.
Paternity Leave
Paternity leave is known as partners leave in New Zealand and entitles partners to leave starting 21 days before the due date of the baby, or the date employee’s partner or spouse becomes the primary carer for a child under six years and ending 21 days after the baby is born.
The exception is if the baby is discharged from a hospital more than 21 days after the birth, in which case the partner’s leave timeframe ends on the day the child is discharged) or the date the employee’s partner or spouse becomes the primary carer for the child.
Parental Leave
There is a range of Parental leave options in New Zealand for:
- Special leave — unpaid leave for pregnancy-related appointments
- Primary carer leave
- Extended leave
- Spouse or partner’s leave
- Negotiated carer leave — if you’re not eligible for work leave
Other Leave
Depending on the collective agreement/employment contract terms, an employee may be allowed additional leave types, on approval between the employer and employee, for the following:
- Special Leave-10 days of unpaid leave, which is given to employees for pregnancy-related appointments.
- Extended Leave – This is extended unpaid leave given to parents and depends on the amount of time an employee has worked. An employee may be entitled to 52 extra weeks of leave if they have been employed for at least 12 months, and 26 weeks is given to a parent who has been employed for at least six months.
PAID MATERNITY LEAVE (DAYS)
Termination
Termination Process
The termination process varies according to the terms of the employment agreement and collective agreement in place and will depend upon the type of contract and reason for termination. An employer must provide sufficient notice before terminating the employment contract except for the case of gross misconduct.
| Salary payment interval / date | Final payment on termination | Bank account/payment-method requirement |
|---|---|---|
| Pay period is determined by the employment agreement (e.g., weekly, fortnightly, monthly). There is no fixed blanket statutory payday for all employees. | The employee’s final pay must include final wages, unused annual holidays and any other payments owing. It must be paid on or before the payday for the final pay period. (employment.govt.nz) | Wages must be paid in money. The law does not mandate that payment must only be by bank account — payment method is as per agreement if lawful. |
Notice Period
An employee wishing to terminate their employment must provided sufficient notice. The amount of which will be outlined in the employment agreement and typically a month’s notice.
If there’s no specific clause in the employment agreement then ‘reasonable notice’ must be given. The length of ‘reasonable notice’ depends on a variety of factors, such as:
- The reason for the redundancy
- The employee’s length of service
- The employee’s seniority and/or remuneration package
- Custom, practice, and industry norms
- The employee’s ability to find alternative employment
- The amount of compensation being paid (if any)
Severance Pay
Generally, severance pay is not required unless it is a redundancy scenario.
Upon termination, there are two types of payments for unused leave entitlement:
- Annual Leave: This covers the period of employment fully completed by the annual accrued anniversary date and not used. This will be paid out at the higher rate between the average earnings and the normal earnings rate.
- Holiday Pay: This covers the period of employment not yet completed by the annual accrual date and will be calculated and paid out at 8% of the salary.
Probation Period
The statutory (trial period) probation period in New Zealand begins on the first day at work and can be for up to 180 days. The actual timeframe will be stipulated in the employment contract and is only applicable to employees who have not worked for the employer before. Three to six months is a common period to use as probation.
Common Benefits
Mileage and travel allowances/reimbursements, phone allowance, wellness allowance, parking allowances.
Immigration
A foreigner can apply for a work visa when there is:
- A job offer from a New Zealand employer
- A specific work-related purpose or event
- A country that has a particular work scheme
- A person has been studying in New Zealand
Some work visas can also lead to residence — that is, the right to live, study and work indefinitely.
To apply, there are required skills, experience, and qualifications needed for the New Zealand workforce.
Types of New Zealand work visas include:
- Essential skills work Visa – Temporary work visa that allows employment from one-five years.
- Work-to-residence Visas – Temporary visa options that allow employees who work full-time for two years to receive residence status.
- Working holiday Visas – Allows for work and travel from 12 – 23 months. These visa schemes depend upon your country of origin.
- Specific purpose Visa – Visa for employees meant to complete a particular task. These Visas typically last 3-12 months, with sometimes three-year visas being granted to multinational employees.
- Relocating business Visa – Used if the company or employer is relocating to New Zealand.
In addition, with effect from 1st November 2021, all New Zealand employers who hire migrant employees will have to be accredited.
VAT
General
The standard rate of GST in New Zealand is 15.00%.
Stay up to date on payroll & employment law changes
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Income Tax: New bracket of 39% tax on income above NZD 180,000
Questions & Answers
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Payroll and Benefits Guide
in New Zealand
What’s covered in this guide:
- Employer/employee contributions
- Minimum wage
- Working hours
- Visa requirements
And more...
Public Holidays Calendar
| Date | Day | Holiday | Notes |
|---|---|---|---|
| 1 January 2026 | Thursday | New Year’s Day | Standard holiday |
| 2 January 2026 | Friday | Day after New Year’s Day | Standard holiday |
| 6 February 2026 | Friday | Waitangi Day | Standard holiday |
| 3 April 2026 | Friday | Good Friday | Standard holiday |
| 6 April 2026 | Monday | Easter Monday | Standard holiday |
| 27 April 2026 | Monday | Anzac Day | Standard holiday |
| 1 June 2026 | Monday | King’s Birthday | Standard holiday |
| 19 June 2026 | Friday | Matariki | Standard holiday |
| 26 October 2026 | Monday | Labour Day | Standard holiday |
| 25 December 2026 | Friday | Christmas Day | Standard holiday |
| 28 December 2026 | Monday | Boxing Day | Standard holiday |
What options do I have regarding the length of a probation period?
Hi Joshua, thank you for your question. In New Zealand, employers with less than 20 employees from the date that the employment agreement is signed can request that new employees have a trial period of 90 days. This must be written and agreed upon within the employment contract and the contract must also outline the notice period upon termination. However, you as an employee do not necessarily have to agree to this, you have the option to negotiate for a shorter period of time if you so choose. Lastly, if you are part of a union, the probation period must be consistent with what is written in the collective bargaining agreement that applies to you.
Hey, is there any best practice with regard to Company Health Insurance costs in NZ?