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Paying People Abroad

Paying People in New Zealand

This month’s look at International Payroll turns its focus on New Zealand. The land of the long white cloud, and home to the world’s best rugby team…

Employing people in New Zealand

Company registration is required for any company carrying out business in New Zealand. Employers need to have an Inland Revenue number, and be officially registered as an employer.

When hiring new employees, as an employer you need to ensure employee maintenance forms, Kiwisaver (a voluntary, work-based savings initiative) and Tax code declaration (IR330) forms are completed on the start of employment.

New Zealand Minimum Wage

As of 1 April 2011 the adult minimum wage rate (before tax) that applies for employees aged 16 or over is $13.00 per hour, for ‘New Entrants’ 16-17 years, $10.40 per hour. There is no statutory minimum wage for employees who are under 16 years old.

The Working Week

The average full time employment hours are 40 per week in a production environment, and 37.5 hours per week in an office environment.

Holiday Entitlement

All employees are entitled to at least four weeks’ paid holidays a year.
Employees get their annual holiday entitlements on their first and subsequent anniversaries after starting work. For an employee after completion of 12 months’ service, the calculation of annual holiday pay requires the comparison between ordinary weekly pay and average weekly earnings.

Sick Leave

For most employees, there is a minimum provision of five days’ paid sick leave a year after the first six months of continuous employment and an additional five days’ sick leave after each subsequent 12-month period. Exceptions are covered under “the effect of various work patterns”.

Employment Tax in New Zealand

The New Zealand Tax Year runs from 1 April – 31 March.

As an employer you must deduct PAYE from your employee’s earnings and pay it to the Inland Revenue. You may also be liable for fringe benefit tax (FBT) if you provide employees with benefits. This includes things like vehicles, loans and discounted goods.

Employer Monthly Schedule (IR348) forms must be sent to the Inland Revenue on a monthly basis. This monthly schedule will contain the names, IRD numbers and tax codes and gross earnings of your employees (along with PAYE, child support and student loan deductions). This means when year end occurs, the Inland Revenue readily have all employee details.

Ceridian provides New Zealand payroll services, helping international businesses stay compliant. For more information, contact our International services team on 0800 0482 737.