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SALARY PAYMENT IN New Zealand Dollar (NZD, $)
CONTRACT LANGUAGES English
PAYROLL TAX 4.39%
PAYROLL CYCLE Monthly
TIME TO HIRE 24 hours
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New Zealand is an innovative and progressive South Pacific nation with a business-friendly regulatory environment. Ranked 1st in the world for Ease of Business (2020), New Zealand is a straightforward location for international businesses to set up shop.
Furthermore, New Zealand’s excellent handling of the pandemic and general independence from international economic woes mean it is likely to continue to thrive economically while other countries struggle.
Read on for our comprehensive guide to hiring in New Zealand.
| Population 5,053,004 (labor force: 2,820,000) | Capital City Wellington | Languages Spoken English, Maori |
| Currency New Zealand Dollar (NZD) | GDP per capita $48,424 | Ease of Doing Business 1st in the World (2020) |
| Minimum Wage NZD$21.20/hour | Average Wage NZD$1189 | Paid Leave 4 weeks |
The World Bank consistently ranks New Zealand among the best countries in the world to do business in. The factors contributing to the pacific island nation’s top ranking are many. Perhaps most crucial to the success of New Zealand’s business environment, is the fact that New Zealand is recognized as one of the least corrupt nations in the world.
The business environment is maintained by a strong legal system that’s rooted in English common law and the concept of egalitarianism. New Zealand’s business environment is also supported by politically independent institutions, including; the Overseas Investment Office, the Reserve Bank of New Zealand, and the Financial Markets Authority.
Entrepreneurs and businesses also benefit from high-quality digital services, including up to date information on legislation, guidance and best practices on a range of business-related topics. For example, New Zealand’s Ministry of Business, Innovation and Employment maintain a website which provides information on employment law and hiring in New Zealand.
After a sharp downturn in 2020, New Zealand’s economy recovered strongly through 2021 thanks to highly expansionary macroeconomic policies and measures taken to protect jobs.
Having achieved a growth rate of 5% in 2021, the OECD indicates that real GDP growth will slow to 3% in 2022 and 2% in 2023. New Zealand benefits from a strong tourism industry and the continued opening up of international travel represents a boon to the economy. At over 7%, inflation reached a historic high in 2022, and is well above the Reserve Bank of New Zealand’s 1-3% target, however inflation is expected to fall within the Reserve Bank’s target band by 2023.
New Zealand has extensive employment laws. A wide range of relevant legislation exists, covering employment-related issues such as the ‘minimum standards of employment’ around pay and leave, discrimination and employee privacy.
Although New Zealand’s employment laws are similar to those in the UK and Australia, nuanced differences do exist. As an employer, it’s crucial that you have a firm grasp of your obligations before making any hiring decisions in New Zealand.
Before making any hiring decisions, it is worth having an understanding of New Zealand’s distinct work culture.
New Zealand’s business culture is most comparable to Australian and British customs of business. The country is known for its diverse population and with the largest ethnic groups being European, Maori, Chinese, Tongan and English. This diversity extends to the workplace and employers should therefore be sensitive to issues of inclusion and discrimination.
The work environment is largely egalitarian meaning humility is respected and there may be less hierarchy than you are used to. For example, senior managers expect and value input from other colleagues, regardless of title or level of seniority. Furthermore, workers are usually expected to operate with a high degree of independence and without an overly rigid structure in place.
Although New Zealanders are known for their relaxed demeanors, time keeping is important and tardiness reflects poorly in professional settings. Introductions are initiated with a handshake and, beyond the initial introduction, colleagues refer to one another using first names.
There is no legal requirement for private sector employers in New Zealand to advertise job vacancies. Although practices differ between industries, the recruitment process tends to be completed online.
Jobs portals such as SEEK, Jora, Indeed, and MyJobSpace are popular. LinkedIn is also used to advertise vacancies and many companies use the social networking site for the purposes of identifying talent and building their own candidate databases.
Employers must take care to comply with New Zealand’s laws on discrimination, as set out in The Human Rights Act (1993). The HRA applies to discrimination in all aspects of employment from job advertisements, application forms, interviews and job offers.
To expedite their expansion into New Zealand, whilst ensuring compliance with New Zealand’s employment laws, many companies decide to contract with a New Zealand PEO under the Employer of Record model. As the industry leader, Horizons offers access to local expertise and tailored recruitment strategies.
In most situations, only those candidates who make it onto a final shortlist will be invited to attend a formal interview. In certain instances, all candidates who make it through the initial screening process may be invited to interview.
The format of the interview will depend on the specifics of the job being advertised. Employers should take care to explain the format of the interview process, clearly setting out ‘next steps’ as a candidate advances. The interview process in New Zealand tends to include one or a combination of the following approaches:
The privacy of candidates is an important consideration in New Zealand. For example, interviews should be scheduled in such a way that candidates avoid meeting other candidates without prior warning.
The use of assessment tasks is another area where care must be taken. In some circumstances, there is a risk that performance of tasks may be considered as employment. Hiring companies should not stand to make financial gain from the performance of required assessment tasks and the tasks must be relevant to the job being advertised.
Yes. There are currently no laws that forbid employers from asking about a candidate’s salary history in New Zealand.
In New Zealand, interviews tend to focus on the candidate’s ability to do the job. Under the Human Rights Act (1993) it’s illegal for employers to discriminate on the basis of; age, religious belief, relationship status, sexual orientation, nationality or ethnic origin, political views, or health.
According to the job marketplace Seek, salaries increased across all sectors of New Zealand’s economy in 2022. The typical salary increase was around 6%, and is largely driven by inflation
It’s important to note that, in New Zealand, employers don’t have a legal obligation to offer a salary increase or pay rise unless stated in the employment agreement. The exception to this rule would be an employee who is earning the current minimum wage rate, and this rate is increased.
Regardless of legal obligations, across New Zealand, particularly in professional settings, it is common practice to regularly review employee performance and pay.
The onboarding of new employees is a crucial part of the recruitment process. Effective onboarding ensures new employees feel comfortable and are able to get to work without delay. There are also certain legal obligations employers must meet when taking on new employees.
Get ahead and ensure a smooth start by setting up the digital systems such as accounts and devices that the new start will use on a day-to-day basis.
In order to comply with the requirements of the Employment Relations Act (2000) and the Holidays Act (2003), all employers in New Zealand are required to keep and maintain accurate employee records.
New employee details need to be added to the employee payroll and insurance providers must be informed. As part of this, employers are required to collect certain information such as the employee’s tax code and KiwiSaver (mandatory pension scheme) details. Other social insurance schemes, such as the Accident Compensation Corporation Levy (ACC) require employers to update their payroll details with the Inland Revenue Department.
Remote working is increasingly popular in New Zealand. Employees have the right to request to work from home and do not need to provide a specific reason. Employers that decline such requests must provide a justifiable business reason.
It should be noted that, if a hybrid or work-from-home agreement is established, the employees’ home is considered a workplace. Under New Zealand’s Health and Safety at Work Act (2015) there is a shared responsibility to minimize any health and safety risks.
Employers in New Zealand are adjusting to work from home and hybrid working models and best practices for managing remote teams. In terms of tools that facilitate remote working, the first consideration tends to be in regards to cyber security.
VPNs and Cloud Computing solutions ensure a secure online environment but training may also need to be provided on cyber security best practices.
Other remote working tools that are popular in New Zealand include:
Slack – a workplace communication tool built around instant messaging and project management features. “Slack” is an acronym that stands for ‘Searchable Log of All Conversation & Knowledge’.
Microsoft Teams – the primary alternative to Slack, Microsoft Teams is a collaboration tool that syncs with the full suite of Microsoft Office 365 applications.
| Date | Holiday name |
|---|---|
| 1 Jan Sunday | New Year’s Day |
| 2 Jan Monday | Day after New Year’s Day |
| 3 Jan Tuesday | Day off for New Year’s Day |
| 6 Feb Monday | Waitangi Day |
| 7 Apr Friday | Good Friday |
| 10 Apr Monday | Easter Monday |
| 25 Apr Tuesday | ANZAC Day |
| 5 Jun Monday | King’s Birthday |
| 14 Jul Friday | Matariki |
| 23 Oct Monday | Labour Day |
| 25 Dec Monday | Christmas Day |
| 26 Dec Tuesday | Boxing Day |
In the event that an employee is required to work on the day of a public holiday, the employer usually grants them an alternative holiday to be taken at another date. Other practices include paying the employee at a rate of time and a half.
Employees typically expect a salary increase that matches the rate of inflation, as measured by the LPI. Research has found that skilled employees in New Zealand typically expect a salary increase of 3%.
The rights and responsibilities of the organization and the employee differ based on the status of the employee. Aside from economic considerations, the decision essentially comes down to locus of control, i.e. where there is a need for greater control over the worker’s work content, hours and methods, it makes sense to hire an employee.
Yes. Provided the foreign worker is entitled to work in New Zealand. Migrant workers have the same minimum employment rights as native workers. Migrant workers who are entitled to work in New Zealand include;
To ensure compliance with New Zealand law, we advise seeking expert legal advice. Overseas companies “carrying on business” in New Zealand must register as a branch of an overseas company with the New Zealand Companies Office.
It is possible for international enterprises to open a foreign subsidiary in New Zealand by incorporating there.
Although New Zealand’s legal system offers predictable outcomes and the transparency of New Zealand’s institutions is renowned, maintaining an overseas entity can become costly and time-consuming. An alternate option is to contract with a New Zealand PEO that can manage payroll, HR, recruitment, and employee onboarding.
There are multiple ways to go about hiring employees in New Zealand. One of the most effective ways to hire the most qualified, high-level talent is to partner with a global recruiter that has local, in-country experts.
Your business can easily hire employees in New Zealand without opening a local entity. We handle local employment law, complex tax regulations, and international payroll in 180+ countries worldwide. All you need to do is focus on your business.
Holiday season in New Zealand — 2023
