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Global Payroll Team
Written by Global Payroll Team
Last updated May 7, 2026
Expert Reviewed
Payroll in New Zealand
Tax in New Zealand
Immigration in New Zealand

New Zealand map

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Mercans offers complete payroll, PEO and HR services in New Zealand

New Zealand offers a stable business environment, transparent institutions, and a skilled workforce. Combined with strong sectors such as food and beverage, renewable energy, technology, advanced manufacturing and tourism, the country remains an attractive location for international business expansion.

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Doing Business in New Zealand

New Zealand offers a well-established regulatory system that supports business growth and international trade. It is part of a broad network of free trade agreements and continues to be regarded as a straightforward place to establish and operate a business.

Entity Registration and Incorporation Requirements

Setting up a new business or expanding an existing one in New Zealand is straightforward. Choose how your company operates from a range of entity types that suit your individual circumstance.

Banking

Banking hours commonly run during standard business hours from Monday to Friday, although digital banking is widely used for business transactions.

Working Week

The standard working week is generally Monday to Friday, with employment agreements typically setting ordinary hours at up to 40 hours per week, excluding overtime.

Labor Law

The law protects employees by setting minimum employment rights, health and safety standards, and good faith obligations between employers and employees. These minimum rights can be improved through negotiated employment agreement terms.

Main Industries

Food processing, tourism, machinery and transportation equipment, financial services, technology and renewable energy.

GDP Growth

0.2%

Dates & Numbers

dd/mm/yyyy

Official State Name

New Zealand

Population

5.342 million

Capital

Wellington

Major Languages

English, Māori

Currency

New Zealand dollar

Internet Domain

.nz

International Dialing Code

+64

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New Zealand
Wellington, NZ
10:08 pm, May 15, 2026
10°C
overcast clouds
83 %
Wind Gust: 0 mph
Clouds: 100%
Sunrise: 7:21 am
Sunset: 5:12 pm

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Payroll

There are different minimum wage rates in New Zealand, including adult, starting-out and training rates. From 1 April 2026, the adult minimum wage is NZD 23.95 per hour and the starting-out and training minimum wage is NZD 19.16 per hour. Minimum wage rules do not apply to employees under 16 years of age, and limited exemptions may apply in specific cases.

It is acceptable to provide employees with online payslips

Payslip

Wages, time, holiday and leave records must generally be kept for 6 years

Reports

Employees receive 4 weeks of paid annual leave after 12 months of continuous employment

Annual Leave

Eligible employees receive 10 days of paid sick leave each year

Sick Leave

Eligible employees can receive up to 26 weeks of parental leave payments, while partner’s leave is generally unpaid

Maternity & Paternity Leave

There is no fixed statutory notice period, so notice is usually set by the employment agreement or must be reasonable

Employee Termination

There are no provisions mandated by law regarding the 13th month salary

13th month salary

NZD 23.95 per hour

Minimum Wage

There is no statutory overtime premium, so overtime rates must be agreed in the employment agreement

Overtime

Severance or redundancy compensation is not generally required by law unless agreed in the employment agreement or policy

Severance Pay

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Tax and Social Security

A resident of New Zealand is generally taxed on worldwide income. Payroll in New Zealand mainly involves PAYE withholding, ACC-related obligations, and KiwiSaver where applicable. Income support and other public assistance services are administered by government agencies rather than through a broad social security contribution system like those used in many other countries.

Tax

The majority of an individual’s income is taxable. Employers must register with Inland Revenue, operate PAYE correctly, and comply with applicable tax and payroll reporting requirements.

28%

Corporate Income Tax

39%

Personal Income Tax

15%

Sales Tax

15%

VAT

Social Security

New Zealand does not generally operate a standard employee and employer social security tax model. Instead, retirement savings contributions may apply through KiwiSaver, and ACC-related levies may also apply depending on the employer and worker category.

N/A

Social Security Rate

3.5%

KiwiSaver Employer Minimum

3.5%

KiwiSaver Employee Default

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Employment Law

New Zealand employment law includes the Employment Relations Act 2000, Holidays Act 2003, Minimum Wage Act 1983, Wages Protection Act 1983 and health and safety legislation. These laws establish minimum rights and obligations for employers and employees.

Employment Agreement

An employee’s hours of work must be agreed between employer and employee in a written employment agreement. Accurate records of wages, time, holidays and leave must be maintained by the employer.

Working condition

Employees must be provided with paid rest breaks and unpaid meal breaks in line with legal requirements. Employment agreements must generally specify hours of work, with ordinary hours usually capped at 40 hours per week excluding overtime unless the employer and employee agree otherwise.

Leaves

Employees are entitled to a range of leave types including annual holidays, public holidays, sick leave, bereavement leave, parental leave and more. Employees generally become entitled to four weeks of annual leave after 12 months of continuous employment.

Employment termination

The employment relationship may end in several ways including resignation, retirement, dismissal or redundancy. Any dismissal must follow a valid reason and a fair process, and notice requirements are usually determined by the employment agreement or what is reasonable in the circumstances.

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Reasonable notice

Notice period for terminating an employee if not stated in the agreement

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12 days

Total number of public holidays

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40

Working hours per week

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3 days

Total number of days for Compassionate & Bereavement Leave

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Immigration

Individuals who intend to work in New Zealand and are not citizens or permanent residents of New Zealand or Australia generally require a valid visa. A common route for sponsored employment is the Accredited Employer Work Visa, although visa options vary depending on the role, skill level and immigration pathway.

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Residency permits

Work visas vary depending on the type of job, the worker’s background and the proposed length of stay. Some work visas can lead to residence, allowing an individual to live, study and work in New Zealand indefinitely once residence is granted.

Work Permit Validity

Up to 5 years for many AEWV holders, or 3 years for some lower-skilled roles

Required Documents

Valid passport

Completed visa application and identity documents

Evidence of good health where required

Evidence of good character where required

Employment and sponsorship documents where applicable

Compliant, reliable, error-free and touchless payroll in New Zealand

Build the best team and hire top talent compliantly in New Zealand. Get in touch with New Zealand payroll outsourcing & PEO specialists for a free consultation!

This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.
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    FAQs

    What is an Employer of Record (EOR) in New Zealand and how does it support foreign companies?

    An Employer of Record in New Zealand, provided by Mercans, acts as the legal employer of your workforce in New Zealand. Mercans handles employment contracts, payroll processing, tax withholdings, social contributions, and full compliance with New Zealand employment law, enabling your international company to hire locally without setting up a legal entity.

    Why should businesses use an EOR instead of establishing a legal entity in New Zealand?

    Using Mercans as your EOR in New Zealand eliminates the time and cost of forming a local entity. This approach enables immediate hiring, ensures full compliance with local employment and tax regulations, and allows your business to focus on core operations while Mercans manages employment and payroll responsibilities.

    How does payroll outsourcing in New Zealand ensure compliance with tax and labor regulations?

    Mercans delivers payroll outsourcing in New Zealand by managing salary payments, tax deductions, social contributions, and statutory reporting in full alignment with New Zealand laws. All payroll processes are kept up to date with changing regulations, reducing risk and ensuring accuracy.

    Can an Employer of Record in New Zealand hire employees and manage work visas for international companies?

    Yes. Mercans as EOR in New Zealand can hire employees on behalf of your company and manage visa and work authorization procedures for foreign nationals. This enables your company to engage both local and expatriate talent in New Zealand with full legal compliance.

    What are the main benefits of using EOR and payroll services in New Zealand for global expansion?

    Key benefits include rapid access to the New Zealand talent market without local entity setup, full compliance with employment and tax laws, reduced administrative workload and legal exposure, access to local HR and payroll expertise via Mercans, and the flexibility to scale your workforce efficiently as your business expands globally.

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