Employing in New Zealand
An employer of record, sometimes known as an international PEO can help you quickly hire and onboard workers in New Zealand – often with just two weeks’ notice. Establishing your own local entity without risk and saving costs, this type of service makes an EOR in New Zealand worth checking out!
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.

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.
Employment contracts and related legislation
New Zealand 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.
Holidays & leave
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

Public holidays
Sunday 1 January | New Year’s Day |
Monday 2 January | Day After New Year’s Day** |
Tuesday 3 January | New Year Holiday* |
Monday 6 February | Waitangi Day* |
Friday 7 April | Good Friday |
Monday 10 April | Easter Monday |
Tuesday 25 April | Anzac Day* |
Monday 23 October | Labour Day |
Tuesday 14 November | Kings’s Birthday |
Monday 25 December | Christmas Day** |
Tuesday 26 December | Boxing Day** |
Reviewed 01/11/22 for 2023
The Holidays Act 2003 governs the holidays but does not generally set dates for them. Some holidays are set by legislation (e.g., Waitangi Day Act 1976, ANZAC Day Act 1966, Sovereigns Birthday Observance Act 1952), while others are religious holidays (Easter and Christmas). In addition to public holidays, there are also provincial anniversary days which are observed locally by custom and practice and are generally prescribed by regional or city councils.
Note:
‘*’These public holidays are observed on the actual day when they fall on a weekday. When they fall on a Saturday/Sunday:
- If the employee would normally have worked on the Saturday/Sunday, the public holiday is observed on the Saturday/Sunday
- If the employee would not normally have worked on the Saturday/Sunday, the public holiday is observed on the following Monday/Tuesday
‘**’ From 1 January 2014, the public holiday for ANZAC Day and Waitangi Day are ‘Monday-ised’ if they fall on a Saturday or Sunday and the employee would not normally have worked on that Saturday or Sunday.
The NZ Government recently announced that Matariki would be made a public holiday starting from June 2022 (Friday the 24th). The timing of the holiday will change slightly each year based on the Māori lunar calendar, but it’s expected to always fall on a Monday or Friday.
Keen to engage an EOR in New Zealand? At TopSource Worldwide, we work with local experts to help you navigate the various admin and cost obstacles you may come across along your expansion journey
To find out how we can help your business with our employment solutions, contact us today.
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