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Globalpedia

PEO & Employer of Record (EOR) in NzNew Zealand.

Population

5,237,720

Languages

1.

English

2.

Māori

Country Capital

Wellington

Currency

New Zealand dollar ($) (NZD)

G-P’s Employer of Record (EOR) model allows your company to start hiring talent in minutes via our global entity infrastructure. Unlike a Professional Employer Organization (PEO), G-P allows your company to expand your global footprint without the hassle of entity setup and management.

Our global employment products, including G-P Meridian Prime™ and G-P Meridian Core™, are backed by the largest team of HR and legal experts in the industry. We handle the growing complexities of compliant global expansion — so you can focus on opportunities ahead.

As a global EOR expert, we manage payroll, employment contract best practices, statutory and market norm benefits, employee expenses, as well as severance and termination. You’ll have peace of mind knowing you have a team of dedicated employment experts assisting with every hire. G-P allows you to harness the talent of the brightest people in 180+ countries around the world, quickly and easily.

Hiring in New Zealand

When negotiating terms of an employment contract with employees in New Zealand, make sure to keep the following in mind.

Employment contracts in New Zealand

In New Zealand, employees must be provided with a written agreement that spells out the terms of the employment and the employee’s compensation, benefits, and termination requirements.

An offer letter and employment contract in New Zealand should be in English and always state the salary and any compensation amounts in New Zealand dollars, rather than another currency.

Holidays in New Zealand

The maximum number of ordinary weekly hours are 40 or less (excluding any overtime), unless both parties agree otherwise. There are 11 public holidays in New Zealand:

  • New Year’s Day
  • Day after New Year’s Day
  • Waitangi Day
  • Good Friday
  • Easter Monday
  • Anzac Day
  • King’s Birthday
  • Matariki
  • Labor Day
  • Christmas Day
  • Boxing Day

Vacation days in New Zealand

Employees are entitled to at least 4 weeks of paid annual holidays (annual leave) for each year they have worked for their employer.

Employees get annual holiday entitlement on the anniversary of the day they started working for their employer.

The work anniversary can only change if:

  • The work has an annual closedown.
  • Workers take a continuous period of leave without pay of more than 1 week.

Most employers let employees take annual holidays before the 1-year anniversary — this is called leave in advance.

New Zealand sick leave

Employees are entitled to 10 days of sick leave per year after 6 months of continuous service or if they have worked an average of 10 hours per week, including at least 1 hour every week or 40 hours per month over a 6-month period.

Unused sick leave can be carried over to allow for up to a maximum of 20 sick days in any 1 year.

Parental leave in New Zealand

There are 5 types of parental leave available: primary carer leave, special leave, partner’s leave, extended leave, and negotiated carer leave.

  • Primary carer leave: This is 26 weeks of unpaid leave for the child’s primary carer, who has been working for an employer for an average of 10 hours per week for at least 6 months at the expected date of delivery. Employees may also be eligible for paid parental leave of up to 26 weeks, which is funded by the government and can be requested at the government agency after the employee has applied for primary carer leave. This is paid at the employee’s usual rate up to a capped amount.
  • Special leave: This is up to 10 days of unpaid leave for a pregnant employee for reasons related to the pregnancy.
  • Partner’s leave: The partner of the child’s primary carer will be entitled to 1 week of unpaid leave if they have been working for the employer for an average of 10 hours per week for the preceding 6 months, or 2 weeks of unpaid leave if they have been working an average of 10 hours per week for the preceding 12 months.
  • Extended leave: The primary carer will be entitled to 52 weeks of unpaid leave (minus any primary carer leave or partner’s leave taken) if the employee has been working for the employer for an average of 10 hours per week for the preceding 12 months.
  • Negotiated carer leave: This is unpaid leave for otherwise ineligible employees by agreement with their employer. This allows the employee to take leave to care for their child and receive a government-funded parental leave payment.

Health insurance in New Zealand

New Zealand has a universal public healthcare system. This means that citizens, permanent residents, and workers on a valid work visa for 2 years or more will be covered by subsidized healthcare services. Individuals that fall outside of these categories may utilize these healthcare services but at an additional cost, or they may obtain private health insurance.

New Zealand supplementary benefits

There are 61 types of support services available to New Zealand employees for varying situations. However, there are a few supplementary benefits that are most common among employers in the country.

Main benefits: Jobseeker support, sole parent support, supported living payment, youth payment and young parent payment, emergency benefit, NZ superannuation/veteran’s pension, Working for Families tax credit payments.

Supplementary benefits: Housing assistance, childcare assistance, winter energy payment, disability allowance, orphan’s benefit and unsupported child benefits, and hardship assistance.

Bonuses

Performance bonuses or incentives are paid in addition to employees’ base wages. They’re usually linked to agreed performance measures, so the amount of the bonus paid depends on how well the employee has performed during the year. For example, bonuses and incentives can be paid for meeting sales targets or project milestones.

Bonuses are taxed depending on their type and frequency.

Frequent and regular bonuses are treated as part of an employee’s earnings and have pay-as-you-earn (PAYE) deducted. A one-off bonus (such as an annual bonus) or a redundancy or retirement payment is treated as a lump sum payment.

Termination and severance in New Zealand

All employment agreements must include a plain language explanation of the services available for the resolution of employment relationship problems, including a reference to the period of 90 days (or 12 months in cases of sexual harassment) within which a personal grievance must be raised.

There is no statutory entitlement to severance pay (i.e. redundancy compensation) in New Zealand. However, both parties may negotiate severance payment terms, which are then usually set out in the agreement.

Paying taxes in New Zealand

Income tax rates in New Zealand vary based on the employee’s income. It ranges from 10.5% to more than 39%. The PAYE system means employers do not have to worry about income taxes because they get deducted from employees’ incomes automatically.

However, New Zealand employers must offer KiwiSaver — the country’s retirement savings program — to all employees.

Why G-P?

At G-P, we help companies unlock the power of the everywhere workforce through our industry-leading Global Growth Platform™. Let us handle the complex and costly tasks involved in finding, hiring, onboarding, and paying your team members, anywhere in the world, with the speed and guaranteed global compliance your business needs.

Contact us today to learn more.

Disclaimer

THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). G-P does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect G-P’s product delivery in any given jurisdiction. G-P makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.

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