Before hiring employees in New Zealand, there are a few important things you’ll need to know. Firstly, employees are entitled to 26 weeks of maternity leave. This is known as primary care leave, and must be taken in one continuous period. During this time, employees are paid up to $606.46 per week by the state.
It’s also important for employers to know that in New Zealand, notice periods may be paid out rather than observed. If the employment agreement doesn’t have a notice period, then "fair and reasonable" notice must be given before the termination of employment. This should take into account length of service, type of job, how long it might take to replace the employee, and common practice in the workplace. Severance payments are not required by law.
We know this might sound overwhelming—but it doesn’t have to be. A solution like Oyster eliminates the barriers for you. With Oyster, you can automate compliance across 180+ countries, easily managing HR and payroll—all in one, easy-to-use platform.
Get an overview of what you need to know when hiring in New Zealand below.
Full-time work is usually seven and a half to eight hours per day.
Employers are not legally required to pay more than an employee’s regular salary for overtime work. However, if previously agreed upon, overtime work can be paid at one and a half or two times the employee's salary.
If an employee has had to work on a public holiday, they are entitled to an "alternative holiday," which gives them a day off at another time. These can also be called ‘lieu days.’
The probationary period in New Zealand is three to six months.
The notice period in New Zealand is usually between two and four weeks.
If the employment agreement doesn’t have a notice period, then "fair and reasonable" notice must be given before the termination of employment. This should take into account length of service, type of job, how long it might take to replace the employee, and common practice in the workplace.
Employers should include notice period provisions in employment contracts for dismissals and resignations.
Employees who have worked for at least 12 months with their employer are entitled to four weeks’ paid annual leave a year.
Employees can "exchange" one week's leave for cash, if they want.
Unused leave is cashed out in cases of termination.
Employees in New Zealand are entitled to five days of fully paid sick leave every year, after the first six months of continuous employment. They get an additional five days of leave after each subsequent 12-month period. Sick leave is paid for by the employer.
Any sick leave owed at employment termination is not paid out.
Employees are entitled to 26 weeks of maternity leave (known as primary care leave) and are paid up to $606.46 per week by the state. This leave must be taken in one continuous period.
Employees can also take an unpaid "partner's leave" within 21 days before or after the child’s birth. The time allotted depends on an employee’s tenure. The breakdown is as follows:
An employer’s minimum social contribution in New Zealand is 3%.
In New Zealand, employees pay between 10.5% and 33% in taxes, depending on their income bracket. Employees also pay between 2% and 10% in social security.
Notice periods may be paid out rather than observed. Severance payments, however, are not required by law. These additional payments may be provided in an employment agreement or negotiated as a part of the leaving package.
Setting up a business entity everywhere you want to hire a new employee isn’t scalable—it takes too long and the legal fees are high. At the same time, understanding and adhering to the local labor laws and employee expectations can be complex and time consuming. And it’s hard to find reliable information on up-to-date employment information for all the countries where you’re considering hiring. Not to mention tracking down invoices and managing employee contracts over email and spreadsheets—that gets messy fast.
We can’t afford to take risks when it comes to compliance—we need to make sure we follow the local guidelines, especially when it comes to taxes and legalities.
With Oyster, you can manage HR and payroll, and automate compliance across 180+ countries—all in one, easy-to-use platform.