Employer of Record Services for New Zealand

Employing in New Zealand

When it comes to striking a good work-life balance, the Kiwis know a thing or two. The average working hours in New Zealand are typically between 37 and 40 hours a week across five days, so they work hard — but they also like to relax. Holiday entitlement is generous by international standards, and Kiwis often use their free time to enjoy all that this spectacular country has to offer. From metropolitan cities to national parks, mountain trails and sandy beaches, there’s plenty to see and do.

In recent years, several job sectors — including transport and logistics, engineering, manufacturing, trades and services — have also expanded into New Zealand, providing attractive opportunities for international companies hoping to plug the skills gap. Small and medium-sized enterprises do particularly well here and account for a huge number of New Zealand businesses (even the country’s big companies are considered small by international standards!).

Although New Zealand has three official languages (English, Maori and New Zealand Sign Language), most business is done in English — enabling a smooth transition for businesses from all over the world.

Our Expertise

Managing a global workforce in New Zealand

Known for its progressive workplace practices and strong emphasis on work-life balance, New Zealand's employment landscape is governed by laws that ensure fair treatment of workers, including the Wages Protection Act and KiwiSaver contributions. TopSource Worldwide assists businesses in navigating these complexities, providing expert EOR, payroll and HR services tailored to New Zealand's specific requirements.

Extensive expertise

Our team of experienced, knowledgeable staff collectively provide up-to-date employment information across 180 countries, so you can always get accurate advice.

Entity-free employment

Feel free to hire employees from all over the world without being weighed down by setting up entities, running complex payroll or recruiting a hiring team.

Payroll without hassle

Have the confidence that your staff will always be paid accurately and on time, so that you can focus on your core business activities and work towards your success.

Always-on support

Access helpful, relevant, personalised advice whenever you need it, along with expert-led recruitment policies and tried-and-tested HR best practices.

"With TopSource we were able to have employees hired or maintained in Nutreco without having to establish an entity in these countries for only 1-2 employees. I think most countries are covered by TopSource, so they can help us with almost all cases. Good advice on conditions and direct contact with employees. Invoicing done directly to the company. An easy process compared to hiring employees by ourselves."

Annette van Duijnhoven

Nutreco

See our customer stories

”We searched the market for a local payroll vendor in 2014 and we chose TopSource as our partner. We were looking for error-free and timely payroll processing and TopSource Worldwide delivers this, saving us time and money. We have worked together for 8 years now and would recommend them to anyone."

Praveen Lihinar

Sungard

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”TopSource Worldwide has a detailed and methodical onboarding process that made it easy for us to get set up and running with our UK employees. They were able to take the worry out of trying to comply with all local laws and regulations. Because they have this knowledge we do not have to research on our own and hope we are in compliance. This has saved us hours of time and gives both the company and employees a sense of security."

Supervisor

Client based in Ft Worth, Texas, USA

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GLOBAL EXPANSION STRATEGY

Personalised Employer of Record services in New Zealand

TopSource Worldwide offers personalised Employer of Record (EOR) services tailored to meet the specific needs of your business in New Zealand. This includes handling employee onboarding, payroll processing, tax compliance, employee benefits management, and HR support. Our EOR services ensure that your business meets all legal and regulatory requirements, providing a hassle-free solution to manage your New Zealand-based employees.

End-to-end New Zealand payroll services

Looking to expand into New Zealand? Our unparalleled expertise in global payroll services ensures that your business can seamlessly navigate the complexities of payroll on a global scale, supporting your New Zealand expansion initiatives.

Global entity management

Venturing into the New Zealander market can be both exciting and challenging. With distinct business regulations, cultural nuances, and economic landscapes, it's essential to have a clear roadmap for your business establishment journey.

Accounting

Whether your goal is to process your purchase-to-pay transactions with minimum errors or manage your expense claim procedure, our team of experts can handle your accounting responsibilities, allowing you to focus on your core business and save time and money.

Global EOR services

Managing a diverse global workforce can be complex. This is where TopSource steps in as an invaluable employer of record services partner for companies seeking to expand their global reach while ensuring compliance with local employment laws and regulations.

Global Expansion Simplified

How to do business in New Zealand

Entering the New Zealander market presents a mix of excitement and challenges. Given unique business regulations, cultural intricacies, and economic dynamics, a well-defined roadmap is crucial for a successful business establishment.

TopSource Worldwide is with you at every stage. Whether it's navigating local regulations or facilitating seamless operational transitions, our expertise ensures a swift and efficient process for establishing your business in New Zealand.

Start your New Zealand expansion

New Zealand Insights

Key insights into New Zealand's landscape

VAT rates: New Zealand has a Goods and Services Tax (GST) rate of 15% on most goods and services.

Ease of Doing Business rank: New Zealand ranks 1st in the World Bank's Ease of Doing Business Index, indicating an exceptionally favourable business environment.

Consumer Confidence Index: Consumer Confidence in New Zealand increased to 88.90 points in the fourth quarter of 2023.

Employee maternity/paternity leave: Maternity leave is typically 22 weeks, and paternity leave is up to 2 weeks, with additional parental leave options.

Employee termination period: Standard notice for termination varies but is typically 1 to 4 weeks, depending on employment contract terms and duration.

Employee salary pay date: Wages are commonly paid weekly, fortnightly, or monthly, with specific pay dates outlined in employment contracts.

Bank holidays: Holidays in New Zealand include Waitangi Day, Good Friday, Easter Monday, Anzac Day, Queen's Birthday, Labour Day, and Christmas Day.

An overview of employing in New Zealand

Variable salary

If an employee is contractually entitled to commission, this will form part of the employee’s gross pay for the purposes of calculating their holiday pay entitlements.

If commission is truly discretionary, this will need to be clearly stated in the contractual documentation. It’s important to make it clear that any payments are made at the company’s/client’s sole discretion and that the company has the right not to pay commission even if the conditions for payment have been met.

Employer costs

Employer Superannuation Contribution Tax (ESCT) is a tax which is deducted from the cash contributions made by the employer to employees’ superannuation accounts, including KiwiSaver. The rate of ESCT to deduct can vary for each staff member.

Social security system

New Zealand residents and some work visa holders benefit from the public health system in New Zealand on a free or low-cost basis due to heavy government subsidies. New Zealand residents can choose to take out medical insurance for private healthcare, although many New Zealanders don’t opt for this additional cover. Non-residents can also use healthcare services at a cost but should get medical insurance from their home country.

Employment contracts and related legislation

Pension/Retirement Provision

KiwiSaver is a voluntary savings initiative designed to make it easier for New Zealanders to save for their future. For most individuals, KiwiSaver is work-based which means the employer will enroll the employee (if not already a member) and if certain eligibility criteria are met.

Employee contributions are deducted out of their salary and they can choose a contribution rate of either 3%, 4%, 6%, 8% or 10% of their gross salary or wages. The compulsory employer contribution rate is 3% of an employee’s gross salary or wages if they are a member, but the employer can contribute more if they wish.

Trial period

Trial periods can only be used by companies with 19 or fewer employees.

The maximum possible trial period is 90 days, and this is subject to certain conditions.

For a trial period provision to be enforceable, it must be entered into before the employee starts work for the first time with the employer.

Trial period provisions are interpreted strictly by the courts as they deny employees statutory protection against being unjustifiably dismissed. Accordingly, it’s important to ensure the employment agreement is signed before the employee commences employment.

Private healthcare

Occupational health insurance is not typically common in New Zealand as this is a taxable benefit and can be subject to Fringe Benefit Tax (FBT) and arduous to administer.

Rest breaks

During an eight-hour work period, employees have the right to:

Two 10-minute paid rest breaks
One 30-minute unpaid meal break

Working hours

For professional roles, the norm is 40 hours per week.

An employee can only be made to work on a public holiday if:

It falls on a day that they would have otherwise worked on
Their employment agreement says they have to work on the public holiday

Restraint of trade (non-compete)

There are two main types of restraint-of-trade clauses in New Zealand:

Non-competition
Where a former employee is prevented from working in a similar field to their former employer’s business

Non-solicitation
Where a former employee is allowed to take another job in the same or similar industry but is restricted from contacting their former employer’s clients about their new business

Restraints of trade in New Zealand are generally considered to be void and unenforceable as they are considered to be anti-competitive. Over time, however, the courts have come to allow employers to rely upon restraints providing the employer has a legitimate business interest to protect. Legitimate business interests include confidential information and customer connections.

For a restraint of trade to be enforceable, it must be reasonable in terms of geography, scope, and time. However, due to the nature of the co-employment relationship, we can never warrant that such clauses would be enforceable.

Holidays & leave

Holiday entitlement in New Zealand

The statutory minimum holiday entitlement is four weeks of paid annual holiday (annual leave) each year, after 12 months employment. The waiting period can be waived in the employment agreement if required.

Sick leave in New Zealand

Employees are entitled to sick leave (paid time off work) if an employee, their spouse, partner, dependent child or other person who depends on them is sick or injured. All employees (including part-time employees) are entitled to five days’ sick leave if they have six months’ current continuous employment with the same employer or if they have worked for the employer for six months for an average of 10 hours per week and at least one hour in every week or 40 hours in every month. This is known as ‘the work test’.

For each 12-month period after meeting the above, each employee gets at least five days’ sick leave.

If at any time in the future there’s a period when their employment is not continuous, or they don’t meet the work test, then they’ll have to requalify for entitlement to sick leave. The employee will not lose any existing unused sick leave that they’re entitled to.

Casual employees could also be entitled to five days’ sick leave after six months’ employment if they have worked at least 10 hours per week on average over that six-month period and no less than one hour every week or 40 hours every month. If in any year the casual employee doesn’t meet the criteria, then they don’t get any new sick leave entitlement; however, they can use their sick leave balance which may have carried over. An employee may requalify for sick leave as soon as they meet the criteria.

Sick leave entitlements are not pro-rated in any way. For example, even if a part-time employee only works three days a week, they still get five days’ sick leave a year and can accumulate up to 20 sick days a year.

Unused sick leave entitlement can be carried over to the following year (maximum thresholds apply). Unused sick leave is not paid out upon termination of employment (unless provision is included in the employment agreement). Cash benefits for temporary incapacity to work, otherwise known as sick pay, compensate for lost income from the employee’s salary when they must take absence due to temporary incapacity to work.

The maximum amount of sick leave that can be accumulated under the Holidays Act 2003 is 20 days. However, the employer and employee can agree that sick leave can accumulate to more than 20 days in the employment agreement or through workplace policies.

A bill was introduced to Parliament on 1 December 2020 and is currently before the education and Workforce Select Committee to increase employees’ minimum entitlement to sick leave from five days to 10 days per year. If these changes come into force, an employee would first become entitled to 10 days’ sick leave on their next entitlement date. This means that employees who have not worked for their current employer for six months when the law comes into force will receive 10 days’ entitlement as soon as they become entitled to sick leave. Employees who already have a sick leave entitlement when the legislation comes into force will become entitled to 10 days’ sick leave on their next entitlement date. (That is, on the 12-month anniversary of when they last became entitled to sick leave.)

Additional leave

Bereavement Leave

After six months’ continuous employment with the company, the employee will be entitled to three days’ bereavement leave on the death of the employee’s partner, parent, child, sibling, grandparent, grandchild or partner’s parent. The employee will be entitled to one day’s bereavement leave on the death of any other person if, having regarded the factors in the Holidays Act 2003, the company accepts that the employee has suffered a bereavement.

Parental Leave

There are different entitlements available to parents depending on whether they’re employees and if they meet the six or 12-month eligibility criteria. Further comprehensive information is available on request.

Family Violence Leave

Employees are entitled to family violence leave if 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 in every week or 40 hours in every month.

If eligible, employees are entitled to a minimum of 10 days of paid family violence leave, irrespective of when the family violence took place. The leave can also be taken to support a child who is a victim of family violence.

Employ and pay anywhere

Specialising in multi-country payroll solutions

TopSource Worldwide offers comprehensive payroll outsourcing services, ensuring seamless and accurate management of your organisation's payroll functions. With cutting-edge technology and a team of experienced professionals, we handle payroll processing, tax compliance, and regulatory requirements with precision.

Discover our payroll benefits

Calculate Your Employer of Record Taxes in Seconds

Employment Cost Calculator in New Zealand

Our Employment Cost Calculator simplifies complex tax calculations for global businesses. Accurately assess tax obligations, ensuring compliance with local regulations. Streamline payroll management effortlessly with our user-friendly tool, providing transparency and efficiency in international workforce taxation.

In addition to calculating your EOR taxes, our calculator can also help you:

Understand the different types of EOR taxes
Stay up-to-date on the latest changes to EOR tax regulations
Avoid penalties for non-compliance

Speak to our team

Our author

Mark Robbins

Global Sales Director

Mark is the Sales Director at Topsource Worldwide. He has been a pioneering figure in the global expansion space since 2013. He is the first salesperson to sell EOR services in Europe, a feat he accomplished in 2013.

Published 2023-11-14 00:00:00

Updated 2023-11-15 00:00:00

Reviewed by:

Adrian Cooney

Fact checked by:

Adrian Cooney

Employer of Record FAQ

Frequently Asked Questions about New Zealander employment solutions

What is an Employer of Record in New Zealand?

An Employer of Record (EOR) is a professional services provider that assumes the responsibility of being the legal employer for a company's workforce in New Zealand. This entails managing tasks such as payroll processing, tax withholding, benefits administration, and ensuring compliance with local labour laws and regulations.

How do global employment services work?

Global employment services operate as a comprehensive solution for businesses seeking to expand their workforce across borders. These services, often provided by Employer of Record (EOR) companies like TopSource Worldwide, streamline the complexities of international employment.

What are the benefits of working with an Employer of Record in New Zealand?

Employer of Record companies assume the legal responsibilities associated with employment, alleviating the burden of compliance, payroll, and HR management in New Zealand. This allows companies to expand globally without the complexities of establishing legal entities in each location.

What is the difference between EOR & PEO?

An EOR acts as the legal employer, handling tasks like payroll, tax compliance, and benefits administration. This allows companies to expand internationally without establishing legal entities. On the other hand, a PEO shares employer responsibilities with the client company, often co-employing workers.

How are employer payroll taxes calculated in New Zealand?

Calculating employer payroll taxes involves understanding the various taxes associated with employing workers and complying with tax regulations in New Zealand. Key components include federal and state income taxes, Social Security, Medicare, and unemployment taxes.

What global employment solutions does TopSource offer?

TopSource Worldwide facilitates hassle-free global expansion by acting as the legal employer, handling payroll, tax obligations, and HR responsibilities. With expertise in global entity management, TopSource assists businesses in navigating the intricacies of legal structures across borders.