Planning to hire employees in New Zealand? Here’s a quick guide

When you hire employees in New Zealand, you typically access a skilled English-speaking workforce in the Pacific region. The country provides one of the world’s most business-friendly environments. 

As a global company, when you seek expansion in New Zealand, you must have a fair understanding of the employment laws, tax obligations, onboarding process, etc. 

This guide walks you through the hiring process in New Zealand and provides details on various employment regulations in New Zealand, governed by the Employment Relations Act 2000. 

Payoneer Workforce Management, a trusted EOR service, helps engage talent in New Zealand, and assists with payroll management, and more, with compliance support

How to hire employees in New Zealand

When you aim to recruit employees in New Zealand, you can choose from the following processes:

1. Set up a legal entity in New Zealand

To set up a legal entity in New Zealand, you have to register with the Companies Office. Check availability and reserve the company name. Gather complete details for shareholders and directors, including their name, address, date of birth, etc. 

All directors of the company have to sign a consent form. Finally, submit the application via the website of the Companies Office. Next, you have to obtain a tax number to register for taxes. 

2. Hire independent contractors

One of the easiest and most hassle-free ways to hire in New Zealand is via independent contractors. This option provides you with flexibility and minimal administrative burdens during employment in New Zealand. 

Independent contractors in New Zealand are not covered by the same rights, laws, and obligations as employees. You must know the differences to avoid misclassification risks. 

3. Partner with an Employer of Record

You can partner with an EOR, such as Payoneer Workforce Management, for support in managing the hiring process in New Zealand.

The EOR service helps streamline the hiring process in New Zealand and assists with navigating laws and regulations, employee onboarding and termination, employee leave entitlements and benefits, payroll management, and much more. 

Where to find employees in New Zealand

Here are some of the best places to find employees in New Zealand:

1. Online job portals

You can find talent for various job profiles at different online job portals in New Zealand. Here are some of the most important portals:

• Seek NZ
• Indeed NZ
• Trade Me Jobs
• Jora NZ 
• Jobz.govt.nz

2. Recruitment agencies

Various recruitment agencies often help find the right employees for an organization. Most importantly, these agencies have detailed and thorough knowledge of the job market in the country. They are particularly effective for specialized or high-demand sectors, such as health, construction, tech, etc. 

3. Community networking

You can find employees in New Zealand through community networking, including local newspapers and community boards. You can find local staff with this method. 

4. EOR support

An EOR service such as Payoneer Workforce Management can help you with compliantly onboarding employees in New Zealand without setting up a local entity. Along with handling employment in New Zealand, the EOR service also assists with payroll, taxation, leave entitlements, and more. This gives you time to find suitable candidates for the role.

Onboarding employees in New Zealand

A smooth onboarding process for employees in New Zealand helps you stay compliant and prepares the new hire for their new role. 

Here are the steps that are usually followed:

• Before the onboarding, the employee should have a written employment contract. This is legally mandatory under the Employment Relations Act 2000. 
• Employees have to provide their Inland Revenue (IRD) Number for taxation and related purposes. 
• New hires have to complete the Tax Code Declaration (IR 330) for the correct tax rate application. 
• KiwiSaver enrolment is mandatory for employees, which is New Zealand’s retirement savings scheme. 
• Employees must register and account for Accident Compensation Corporation levies, covering workplace injuries. 
• According to the Health and Safety at Work Act 2015, there must be a health and safety briefing for new employees. 
• Employees should be informed in detail about the company policies, code of conduct, and other internal procedures. 

Key employment laws in New Zealand

The main employment laws in New Zealand are centered around the Employment Relations Act 2000. The law mandates written employment contracts and agreements, a ‘good faith’ relationship, specific leave entitlements, dispute resolution, minimum wage, penalties for employer non-compliance, etc. 

Apart from this, there are many other laws and employment regulations in New Zealand. Some important ones are as follows:

• Health and Safety at Work Act 2015: Evident from the name, this act ensures that employees remain healthy and safe at the workplace. 
• Holidays Act 2003: This is the primary legislation in the country governing minimum leave entitlements for employees, such as annual leave, sick leave, public holidays, etc. 
• Equal Pay Act 1972: This act mandates equal pay for men and women doing the same kind of job, aiming to prevent the removal of discrimination of any sort. 
• Parental Leave and Employment Protection Act 1987: This act provides minimal entitlements, such as primary carer leave, job-protected leave, and more. 

Along with keeping these laws and regulations in mind, there are other things that employees must consider in New Zealand. 

Employment contracts

The Employment Relations Act 2000 contains details on various employment contracts in New Zealand. The common types of employment contracts are as follows:

• Full-time or permanent position: This is an open-ended employment contract with no end date. These employees are entitled to full entitlements. 
• Fixed-term contract: These contracts are for a fixed time and term and have an end date. There are provisions for renewing these contracts as per the requirement. 

The employment contract in New Zealand must be in writing and should contain the following important components:

• The names of the employer and the employee
• Job role and responsibilities of the employee
• Place of work
• Working hours of the employee, with overtime hours, if any
• Wage or salary of the employee
• Probation period and notice period
• Leave entitlements
• Benefits and allowances
• Termination, and more. 

Employee benefits

Just like Australia, employees can enjoy various benefits during their employment in New Zealand. Some of them are as follows:

Working hours in New Zealand

The working hours for employees in New Zealand are not more than 8 hours per day. This makes 40 hours per week. 

Overtime in New Zealand

Employees can work overtime in New Zealand if there is a need for the same. The calculation of the overtime pay depends on the employee’s normal hourly rate. 

The pay is often ‘time-and-a-half’ or ‘double time’. The overtime pay is paid with the monthly salary. 

Employer’s tax obligations

Employers in New Zealand have certain obligations when it comes to taxation and other benefits. When you hire in New Zealand, you should be well aware of these figures:

• Individual income tax in New Zealand has a progressive range from 10.5% to 39%. 
• Also, there is ~5.7705% employer cost in New Zealand. The breakdown for this is 3.5% of KiwiSaver + 0.2705% of ACC + 2% ELI. 

For a detailed breakdown of employment costs, you can use our employee cost calculator.

Termination and severance pay in New Zealand

Employers can terminate employees in New Zealand on logical and valid grounds. Each case of termination is different from the others, and employers must carefully handle them. 

In case an employee is dismissed or terminated on invalid grounds, it is considered unfair dismissal. This can lead to severe legal consequences for the employer, including penalties and legal hassles. 

Here are common scenarios of employee termination in New Zealand:

• Termination by the employer due to theft, misconduct, absence without leave, performance issues, and more. 
• Mutual agreement between the employee and the employer.
• Resignation by the employee.
• Termination during probationary period. 

Notice period

The notice period for employees in New Zealand is the same during probation and after the probation period. The standard notice period is 30 days. In some cases, the notice period might change according to the employment agreement. 

Severance pay

There is no mandated severance pay for employees in New Zealand. 

Explore Payoneer Workforce Management in New Zealand

Payoneer Workforce Management, a trusted EOR service, offers efficient workforce management in New Zealand by helping you to engage talent in New Zealand. Our unified EOR platform assists with the hiring process in New Zealand and helps with payroll, taxes and navigating the local labor and employment laws in the country. 

Book a demo today!

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