Last updated:
July 6, 2026
Introduction
Hiring a remote team in New Zealand requires navigating the Employment Relations Act 2000, KiwiSaver Act 2006 contributions, Accident Compensation Corporation (ACC) levies, and pay as you earn (PAYE) payday filing with Inland Revenue.
Companies without a local entity must use an Employer of Record (EOR); employment agreements are mandatory before a worker starts.
Five obligations activate from the first hire: PAYE registration, KiwiSaver auto-enrolment, ACC levy registration, a compliant employment agreement, and Holidays Act 2003 leave calculations.
Each of these requirements is manageable on its own, but together they add up to a real compliance load. Misapplying annual leave pay can trigger the Labour Inspectorate to investigate the matter.
In this guide, we cover employment laws, payroll and tax obligations, leave entitlements, compliance risks, and the cost of hiring a remote team in New Zealand.
How to hire in New Zealand?
You can adopt one of the following ways to hire in New Zealand:
Option 1: Establishing a subsidiary
You can establish a subsidiary to hire employees in New Zealand. This will give you greater control over your company's hiring and operational processes.
However, you must invest a lot of money, time, and other resources if you choose this option.
Option 2: Hiring on a contractual basis
Instead of opting for full-time employees, you can hire individuals on a contractual basis to save costs and allow flexibility.
If you choose this option, ensure your contracts comply with all local laws to avoid expensive penalties.
Option 3: Hire an Employer of Record (EOR)
You can partner with an EOR like Skuad to help you hire employees in New Zealand on your behalf.
An EOR lets you hire employees without registering a legal entity. It supports onboarding, employment contracts, payroll, tax filings, statutory contributions, and local compliance.
To hire in New Zealand, you can choose either full-time employees or independent contractors. As businesses grow, many use both, which means they need to follow two different sets of rules.
Skuad supports both hiring models from a single platform:
EOR for full-time employees
- Acts as the legal employer across 160+ countries, so you can hire without setting up a local entity
- Supports employment contract generation aligned with local labor laws across supported markets
- Facilitates statutory contribution workflows covering applicable social insurance and pension obligations
- Supports payroll processing in 70+ currencies with tax withholding and year-end reconciliation
- Helps administer statutory benefits, paid leave, and parental entitlements in line with local requirements
- Assists with termination and offboarding, including notice periods and severance calculations as required locally
Contractor management (AOR)
- Helps onboard contractors with locally compliant agreements that reduce misclassification exposure
- Supports invoice generation, approval workflows, and payment processing across supported markets
- Helps flag worker classification risk before it becomes a compliance issue with built-in checks
- Facilitates multi-currency payouts across 70+ currencies with no manual reconciliation
- Helps manage contractor records, contracts, and payment history from a single dashboard alongside full-time employees
See Skuad pricing for full-time and contractor hiring in New Zealand.
One platform to grow your global team
Hire and pay talent globally, the hassle-free way with Skuad.
Talk to an expertWhat are the types of employment laws in New Zealand?
New Zealand does not have a single consolidated labor code. Instead, employer obligations are spread across more than a dozen separate statutes, each covering a different part of the employment relationship, from pay and leave to health and safety, privacy, and retirement savings.
The table below lists the employment laws relevant to hiring and managing employees in New Zealand, along with what each one actually requires.
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Employment laws
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Explanation
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Equal Pay Act 1972
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Prohibits discrimination in remuneration based on an employee's sex, requiring equal pay for the same or substantially similar work.
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Human Rights Act 1993
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Prohibits employment discrimination across 13 protected grounds, including an employee’s sex, race, age, disability, religious belief, ethical belief, marital status, sexual orientation, family status, employment status, colour, ethnic or national origins, and political opinion.
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Minimum Wage Act 1983
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Provides the statutory basis for setting minimum wage rates in New Zealand.
Adult minimum wage: NZD 23.95 per hour.
Starting-out and training minimum wage: NZD 19.16 per hour.
The Act requires all employers to pay at least the applicable minimum rate and gives the courts power to order recovery of any shortfall.
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Holidays Act 2003
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Governs minimum leave entitlements in New Zealand, including annual leave, sick leave, bereavement leave, and public holidays.
It also sets out how leave is accrued, how payment is calculated, and the rules for alternative holidays when an employee works on a public holiday.
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Parental Leave and Employment Protection Act 1987
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Provides eligible employees with the right to paid and unpaid parental leave and protects their employment while they are on leave.
Primary carers may be entitled to up to 26 weeks of paid parental leave, subject to meeting the employment eligibility criteria.
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Health and Safety at Work Act 2015
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New Zealand's primary workplace health and safety legislation. It requires businesses to eliminate or minimise risks to worker health and safety so far as is reasonably practicable, and sets out the duties of employers, officers, workers, and other persons at a workplace.
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WorkSafe New Zealand Act 2013
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Establishes WorkSafe New Zealand as the Crown entity responsible for enforcing workplace health and safety obligations, conducting investigations, and providing regulatory guidance.
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Employment Relations Amendment Act 2026
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The Employment Relations Act 2000 was amended by the Employment Relations Amendment Act 2026, which introduced a modified dismissal process for employees whose remuneration meets or exceeds the NZD 200,000 total remuneration threshold, and changed how reinstatement is applied as a remedy in personal grievance claims.
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Privacy Act 2020
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Governs how employers collect, store, use, and disclose employees' personal information. It also gives employees the right to access their personal information held by an employer and to request corrections where that information is inaccurate or incomplete.
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KiwiSaver Act 2006
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Establishes New Zealand's work-based retirement savings scheme. Employers must automatically enrol eligible employees and contribute a minimum of 3.5% of gross earnings.
Employees may opt out within a prescribed window after starting employment. Contributions and opt-out processes are administered through Inland Revenue.
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Accident Compensation Act 2001
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Establishes New Zealand's no-fault accident compensation scheme, administered by the Accident Compensation Corporation (ACC). Employers pay a work levy calculated against payroll and industry risk classification. Employees pay an earners' levy deducted from wages.
The scheme covers the cost of work-related injuries and removes the right to sue for personal injury damages.
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What are the payroll and tax rules in New Zealand?
Here are the tax and payroll rules in New Zealand that an employer must follow to prevent penalties:
Minimum wages
The adult minimum wage in New Zealand is NZD 23.95 per hour, effective 1 April 2026. The starting-out and training minimum wage is NZD 19.16 per hour.
Both rates apply before tax and any lawful deductions such as PAYE or KiwiSaver contributions. The minimum wage is reviewed and updated once every year, with changes taking effect on 1 April.
Check data-backed global salary insights before making your next hire.
Overtime pay
There is no legal framework that requires employers to pay more than an employee's agreed salary for any overtime hours. Employers can negotiate overtime pay terms with the employee, which should be documented in the employment agreement.
KiwiSaver and ACC Contributions
Employees are automatically enrolled in KiwiSaver from their first day of employment. They may opt out between day 14 and day 56 (weeks 2 to 8) of starting work, but they cannot opt out before day 14.
The minimum employer contribution is 3.5% of gross earnings for enrolled employees, effective 1 April 2026. The default employee contribution rate is 3.5%, with employees able to choose rates of 4%, 6%, 8%, or 10%.
Employers also pay Employer Superannuation Contribution Tax (ESCT) on their KiwiSaver contributions, withheld at the employee's marginal tax rate and remitted to Inland Revenue alongside PAYE. ACC, the Accident Compensation Corporation, administers New Zealand's no-fault accident compensation scheme.
It covers personal injury from accidents regardless of whether they occur at work or elsewhere. Employers pay a work levy based on payroll and industry risk classification; employees pay an earners' levy deducted from their wages.
Income tax
New Zealand uses a progressive income tax system, with these individual rates effective from 1 April 2025.
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Income bracket (NZD)
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Tax rate
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0 – 15,600
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10.5%
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15,601 – 53,500
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17.5%
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53,501 – 78,100
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30%
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78,101 – 180,000
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33%
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180,001 and over
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39%
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Corporate income tax rate
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28%
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Tax year
The New Zealand tax year runs from 1 April to 31 March. Businesses can apply to Inland Revenue to use a non-standard balance date if the standard 31 March year-end does not suit their operations.
Taxation forms and filing
Employers must file payroll information with Inland Revenue on or before each payday under the mandatory payday filing system, which covers PAYE deductions, KiwiSaver contributions, and student loan repayments.
New Zealand has several additional taxation forms for employers and employees. A full list is available at ird.govt.nz.
Running New Zealand payroll as a foreign employer means managing PAYE payday filings with Inland Revenue on or before each pay date, KiwiSaver contribution and ESCT workflows at the updated 3.5% employer minimum from April 2026, ACC levy administration based on industry risk classification, and annual reconciliation across a tax year that runs 1 April to 31 March rather than the calendar year used in many home markets.
Skuad's Global Payroll platform helps teams process payroll across 160+ countries from a single system, supporting statutory contribution workflows, payroll processing in 70+ currencies, and tax withholding across supported markets, without requiring separate local payroll infrastructure in each country.
What types of leave are New Zealand employees entitled to?
Employees in New Zealand are generally entitled to the leave types below once they meet the relevant continuous employment threshold (6 months for sick and bereavement, and 12 months for annual holidays).
Paid time off
As per the employment laws in New Zealand, for every 12 months of employment with the same employer, employees benefit from 4 weeks of paid time off.
Public holidays
The following 11 public holidays are recognized in New Zealand.
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Date
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National public holidays
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New Year’s Day
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Thursday 1 January
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Day after New Year’s Day
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Friday 2 January
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Waitangi Day
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Friday 6 February
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Good Friday
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Friday 3 April
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Easter Monday
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Monday 6 April
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Anzac Day
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25 April (Observed Monday 27 April)
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King’s Birthday
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Monday 1 June
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Matariki
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Friday 10 July
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Labour Day
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Monday 26 October
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Christmas Day
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Friday 25 December
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Boxing Day
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26 December
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- A public holiday is usually observed on the next day if it falls on a weekend.
- Employees working a public holiday are eligible for 150% of their salary and are also entitled to an alternative holiday.
Primary carer leave
Any primary carer of a child under six gets 26 weeks of paid Parental leave in New Zealand.
Female employees can take ten days of leave without pay for pregnancy-related reasons, including midwife appointments, prenatal checkups, etc.
Paternity leave
Paternity leave is referred to as the Partner’s Leave in New Zealand. It has the following criteria:
- One week of unpaid leave for six months of continuous employment.
- Two weeks of unpaid leave for 12 months of continuous employment.
Miscarriage leave
Both parents are entitled to a paid leave of 3 days in the case of miscarriage or stillbirth.
Sick leave
Employees, with at least six months of continuous employment, are entitled to ten days of paid sick leave each year.
Bereavement and compassionate leave
Employees can take up to 3 days of paid bereavement leave if they have worked for the same employer for at least six months.
Employees are also granted one day of paid compassionate leave for the death of a friend or distant relative.
What are the compliance risks of hiring in New Zealand?
Navigating the hiring laws in New Zealand can be challenging for international businesses. Failure to comply with New Zealand employment law carries penalties and fines.
Under Section 235 of the Employment Relations Act 2000, individual employers who breach their obligations may face a personal penalty of up to NZD 10,000. For companies and other corporate bodies, the penalty can reach NZD 20,000 per breach. Serious breaches of the law can attract penalties above these thresholds.
Since 14 March 2025, the stakes have increased further. Employers who intentionally and without reasonable excuse fail to pay money owed to an employee under an employment agreement, the Holidays Act 2003, the Minimum Wage Act 1983, or the Wages Protection Act 1983 may face theft charges under the Crimes Act 1961.
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Compliance risk
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Why it triggers
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Consequences
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Missing or non-compliant employment agreement
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Hiring an employee without a written employment agreement in place before their start date, or using an agreement missing required clauses such as role description, pay rate, hours of work, and a plain-language explanation of the right to seek advice before signing.
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Penalty of up to NZD 20,000 for companies under Section 235 of the Employment Relations Act 2000; NZD 10,000 for individual employers
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Holidays Act 2003 leave miscalculation
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Calculating annual leave pay incorrectly, particularly for employees with variable hours, allowances, or irregular pay, where the employer must use the greater of ordinary weekly pay or average weekly earnings.
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Labour Inspectorate investigations and significant back-payment orders, which have affected major New Zealand organisations in past cases
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KiwiSaver non-compliance
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Failing to automatically enrol eligible employees from the first pay run, missing contributions, applying an incorrect contribution rate.
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Penalties administered through Inland Revenue for late enrolment, missed contributions, or incorrect rates
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PAYE payday filing errors
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Filing payroll information with Inland Revenue late, after each payday rather than on or before it, or submitting incorrect PAYE deductions or tax codes. This is a common gap for foreign employers without established local payroll infrastructure in their first few months
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Interest charges and penalties from Inland Revenue
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ACC levy registration failure
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Not registering with the Accident Compensation Corporation, misclassifying the business activity, or under-reporting payroll, which affects the calculated work levy
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Penalties and interest on underpaid levies; often the first obligation foreign employers miss since it is separate from PAYE and KiwiSaver
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Intentional non-payment of wages or entitlements
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Intentionally and without reasonable excuse failing to pay money owed under an employment agreement, the Holidays Act 2003, the Minimum Wage Act 1983, or the Wages Protection Act 1983, since 14 March 2025
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Theft charges under the Crimes Act 1961; where the amount withheld exceeds NZD 1,000, the maximum penalty is imprisonment of up to seven years
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Serious or repeated breaches under the ERA (Employment Relations Authority )
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Any breach investigated by the Labour Inspectorate, which can act on its own initiative without an employee complaint, particularly where breaches are serious or repeated
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Penalties above the standard NZD 10,000 (individual) or NZD 20,000 (corporate) thresholds under Section 235
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New Zealand's compliance obligations do not stay static. KiwiSaver contribution rates, PAYE thresholds, minimum wages, and leave calculation rules all change on defined cycles, and the Employment Relations Amendment Act 2026 added a further layer of termination procedure requirements that took effect mid-year.
For foreign employers without a dedicated in-house function familiar with New Zealand employment law, monitoring those changes across payroll, agreements, and contribution workflows in parallel is a challenge.
Skuad helps you with ongoing compliance monitoring through its Shield platform, so your team can stay aligned with local employment rules and reduce compliance risk.
Here is what Skuad Shield helps with:
- Continuous compliance monitoring across supported markets, with alerts on regulatory changes that affect your active workforce
- Statutory rate and threshold tracking, covering contribution rate changes, minimum wage revisions, and tax bracket updates as they are issued by local authorities
- Employment agreement compliance checks to help confirm active agreements reflect current statutory requirements across supported markets
- Payroll compliance monitoring, covering deduction accuracy, contribution workflows, and filing obligation timelines across supported markets
- Penalty risk flagging for leave calculations, contribution obligations, and deduction errors before they result in regulatory exposure
- Change management support when local employment law is amended, covering what changes, when it takes effect, and what your workforce records may need to reflect
See how Skuad Shield supports compliance monitoring in New Zealand.
One platform to grow your global team
Hire and pay talent globally, the hassle-free way with Skuad.
Talk to an expertCost of hiring in New Zealand
The cost of hiring in New Zealand varies significantly depending on whether a company hires through an Employer of Record (EOR) or sets up a local subsidiary. The table below gives you a snapshot of how it differs.
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Parameters
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Setting up a local entity
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Partnering with Skuad (EOR/AOR)
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Set up cost
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The set-up cost is high. Companies Office registration costs approximately NZD 150 in government fees. The higher cost is the mandatory resident director, required for all foreign-owned companies under the Companies Act 1993, which typically runs NZD 1,000 to NZD 6,500 annually through a nominee director service, with higher fees for regulated industries.
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Skuad acts as the legal employer across supported markets, removing the need for Companies Office registration, a mandatory resident director, or a local registered address before the first hire.
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Compliance cost
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The compliance cost is high. Employment lawyers in New Zealand charge NZD 300 to 450 per hour, and a single personal grievance matter can cost NZD 1,500 to 3,000 at the initial response stage alone. ERA Section 235 penalties start at NZD 20,000 per breach for companies.
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Skuad Shield helps with country-specific statutory requirements, supports legal-reviewed contract generation across 160+ countries, and provides in-house legal team guidance on employment regulations.
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Administrative cost
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The administrative costs are high. Monthly PAYE payday filing with Inland Revenue, KiwiSaver contribution administration at the minimum 3.5% employer rate, ACC levy reporting, Holidays Act 2003 leave calculations using the greater of ordinary weekly pay or average weekly earnings, and annual IR reconciliations all require dedicated local payroll infrastructure. Termination also requires accurate final pay calculations, covering outstanding annual leave entitlements and applicable notice period obligations
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Skuad facilitates payroll processing in 70+ currencies with tax withholding and statutory deductions, consolidated across all supported markets from a single dashboard. This covers tax deduction workflows, statutory contribution processing, leave balance administration aligned with local entitlement rules, year-end payroll reconciliation, and termination pay calculations, without requiring a local payroll provider, separate compliance filings, or dedicated in-house payroll infrastructure for each market.
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The total cost of a New Zealand hire depends on the employee's salary, KiwiSaver contribution tier, ACC levy rates, and which statutory benefits apply. None of these is straightforward to estimate without running the numbers against current rates.
Skuad's employee cost calculator helps you estimate what it really costs to hire employees in New Zealand based on current local data.
Customer story: how OpenSolar supported international expansion with Skuad
OpenSolar is a cleantech company working to accelerate the global shift to solar energy. As the company grew into multiple markets, it needed to onboard international employees quickly without setting up local entities in each country. OpenSolar used Skuad's EOR platform to support employment contracts, cross-border payroll, and compliance across APAC and EMEA markets.
"Skuad, a Payoneer company, has been a key partner in our international expansion. Their seamless onboarding process and compliance expertise have allowed us to focus on our core mission, which is to accelerate the world's transition from fossil fuels to solar energy."
- Lavinia Davison, Global Head of Talent & Operations, OpenSolar
Read the full case study
Build your team in New Zealand without entity setup
At this stage, you have a clear understanding of how to hire remote teams in New Zealand, including employment laws, payroll obligations, KiwiSaver contributions, ACC levies, leave entitlements, and compliance requirements.
Hiring in New Zealand involves multiple regulatory steps, including employment agreements, PAYE payday filing, statutory contributions, leave calculations, and recordkeeping. Managing these processes manually can increase administrative effort and the risk of compliance errors.
To help businesses manage hiring more efficiently, Skuad supports employment contracts, payroll processing in 70+ currencies, statutory deductions, compliance reporting, and unified employee and contractor management.
Book a demo to see how New Zealand handles Spanish payroll and helps you stay compliant with the local laws.
FAQs
1. What is an employer of record in New Zealand?
An employer of record in New Zealand is a third-party organization that legally employs workers on behalf of a foreign company. The EOR handles employment contracts under the Employment Relations Act 2000, PAYE filings with Inland Revenue, KiwiSaver contributions, and ACC levies without requiring the client to register a local entity.
2. How much does an EOR in New Zealand cost?
EOR service fees in New Zealand typically range from USD 400 to USD 700 per employee per month, depending on the provider. On top of that, statutory employer contributions add roughly 5 to 7% of gross salary, covering the minimum KiwiSaver contribution and ACC levies.
3. Can a foreign company hire in New Zealand without setting up a local entity?
Foreign companies can typically hire in New Zealand through an EOR without registering a company through the Companies Office or appointing a resident director. The EOR acts as the legal employer under the Employment Relations Act 2000 and manages PAYE, KiwiSaver, and ACC on the company's behalf.
4. What compliance risks do employers face when hiring in New Zealand without proper support?
New Zealand employers who get compliance wrong risk penalties under the Employment Relations Act 2000. Section 235 sets fines starting at NZD 20,000 for companies that fail to retain employment agreements. Non-compliance with Holidays Act 2003 leave calculations can also trigger Labour Inspectorate investigations and back-payment obligations.
5. What is the difference between an EOR and a PEO in New Zealand?
An EOR in New Zealand acts as the sole legal employer, so the client company does not need a local entity. A Professional Employer Organization (PEO) co-employs workers alongside the client, which generally requires the client to already have a registered business presence in New Zealand.
6. How long does it take to onboard an employee in New Zealand through an EOR?
Onboarding through an EOR in New Zealand typically takes one to two weeks. If the employee lacks an IRD number, Inland Revenue processing adds around 8 to 10 business days. KiwiSaver enrolment and ACC registration generally run in parallel and do not push back the start date.
About the author
Lead, Global HR Operations
Linh Pham is the Lead for Global HR Operations at Payoneer Workforce Management (Formerly Skuad), based in Ho Chi Minh City, Vietnam. With over 10 years of HR experience in the Asia-Pacific region, she specialises in international talent acquisition, employee relations, and employment compliance. Linh leads the HR Operations team across 50+ countries, ensuring efficient onboarding, payroll management, and adherence to local laws for distributed teams.
