7 MIN READ
UPDATED JUL 6, 2026💡 Everything you need to know to hire and manage employees in New Zealand through Toku. Toku handles payroll processing, tax withholding, social contributions, and statutory compliance. This guide covers what you need to plan costs and manage your team.
At a Glance
| Item | Detail |
|---|---|
| Currency | New Zealand Dollar (NZD) |
| Payroll cycle | Monthly. Toku runs one payroll per month in New Zealand. |
| Estimated employer costs on top of salary | Approximately 4-6% |
| Onboarding lead time | 5-7 business days |
| Standard working week | 40 hours |
| Probation period | Set in the employment agreement, typically up to 6 months |
| Annual leave | 4 weeks after 12 months of employment |
| 13th month salary | Not required |
| Minimum notice on termination | No statutory minimum; set in the employment agreement (commonly 2-4 weeks) |
| Fiscal year | 1 April - 31 March |
Onboarding a New Hire
Plan for 5-7 business days between submitting a new hire and their start date. Before day one, Toku completes KiwiSaver enrollment and Inland Revenue registration, and the employment agreement must be signed before work begins. Your new hire just needs to provide their IRD number.
Submit your new hire through the Toku platform and we take it from there: local employment agreement, statutory registrations, and payroll setup. See Onboard Contributors as a Client Admin in Toku for the step-by-step process, and the Country Readiness Live Tracker for lead times across all countries.
Employer Costs
On top of gross salary, employers in New Zealand pay the following:
| Cost | Rate | Notes |
|---|---|---|
| KiwiSaver employer contribution | 3.5% of gross pay (from 1 April 2026) | Applies to employees enrolled in KiwiSaver |
| Employer Superannuation Contribution Tax (ESCT) | 10.5-39% of the KiwiSaver contribution | Rate depends on the employee's income band; a real employer cost on top of the contribution |
| ACC Work Levy | Approximately 0.69% on average | Varies by industry risk classification |
| ACC Working Safer Levy | NZD 0.08 per NZD 100 of liable earnings | Flat rate (0.08%) |
As a rule of thumb, total cost of employment is roughly 104-106% of gross salary. There is no 13th or 14th month salary requirement in New Zealand.
Employees pay their own income tax through PAYE (10.5-39% across income bands), their KiwiSaver contribution (3.5% minimum if enrolled, with higher rates available by election), and the ACC earners' levy (1.75% from 1 April 2026, capped). These are withheld from gross salary, not charged on top. Toku calculates and remits all of the above.
Compensation & Payroll
Toku runs one payroll per month in New Zealand, and employees receive a payslip each cycle. The adult minimum wage is NZD 23.95 per hour from 1 April 2026 (the starting-out and training rate is NZD 19.16 per hour). There is no mandatory 13th month payment or statutory bonus. Salaries are paid in NZD by bank transfer.
Employment Contracts & Probation
- Toku issues a compliant local employment agreement for every hire, signed before the start date as New Zealand law requires.
- Employment types are permanent (full-time and part-time), fixed-term, and casual. Permanent is the default.
- Fixed-term agreements are only permitted where there is a genuine reason (for example, parental leave cover, a specific project, or a seasonal peak), and that reason must be stated in the agreement.
- Probation is set in the employment agreement, typically up to 6 months. New Zealand also allows a 90-day trial period at the start of employment; during probation, employees keep the right to challenge an unjustified dismissal, so a fair process still applies.
Working Hours
The standard full-time week is 40 hours (eight hours per day, five days per week). New Zealand has no single statutory maximum on weekly hours, but hours must be set in the employment agreement and be reasonable. There is no statutory overtime premium; any overtime pay is whatever the employment agreement provides. Employees are entitled to paid 10-minute rest breaks and an unpaid 30-minute meal break, scaled to the length of their shift.
Leave Entitlements
| Leave | Entitlement | Who pays |
|---|---|---|
| Annual leave | 4 weeks after 12 months of continuous employment | Employer |
| Sick leave | 10 days per year after 6 months of service | Employer |
| Bereavement leave | 3 days per bereavement (close family), 1 day (other) | Employer |
| Parental leave (primary carer) | Up to 26 weeks paid, plus up to 26 weeks unpaid | Government (capped at NZD 811.05 gross per week from 1 July 2026) |
| Parental leave (partner) | 1-2 weeks depending on length of service | Unpaid |
| Family violence leave | 10 days per year | Employer |
Unused sick leave accumulates year to year up to a cap of 20 days. Paid parental leave is government-funded and administered through Inland Revenue, so it is not an employer cost.
Public Holidays (2026)
New Zealand observes 11 national public holidays in 2026. Each region also has its own anniversary day as an additional public holiday.
| Date | Holiday |
|---|---|
| 1 January | New Year's Day |
| 2 January | Day After New Year's Day |
| 6 February | Waitangi Day |
| 3 April | Good Friday |
| 6 April | Easter Monday |
| 27 April | Anzac Day (observed; actual date 25 April) |
| 1 June | King's Birthday |
| 10 July | Matariki |
| 26 October | Labour Day |
| 25 December | Christmas Day |
| 28 December | Boxing Day (observed; actual date 26 December) |
Employees who work on a public holiday are entitled to time-and-a-half pay plus an alternative day off.
Benefits: Required vs. Common Extras
Statutory (included in employer costs above): KiwiSaver retirement contributions, ACC no-fault accident coverage (workplace and non-workplace injuries), publicly funded healthcare, and the statutory leave entitlements listed above.
Toku offers fully sponsored international health coverage through Remote Health. See Remote Health, Your Global Insurance Plan for coverage details and enrollment.
Common extras in the New Zealand market include additional employer KiwiSaver contributions above the minimum, private health and life insurance, income protection insurance, professional development budgets, flexible working, and wellness programs. Note that some non-cash benefits attract Fringe Benefit Tax; Toku can advise on the cost impact of any benefits you want to add.
Ending Employment
Any dismissal in New Zealand must be justified: a substantive reason plus a fair process, including giving the employee a chance to respond before a decision is made. Involve Toku early so the process is handled correctly from the start. For the process, see How to Terminate an Employee or Contractor.
| Service | Notice |
|---|---|
| Trial period | As specified in the agreement (commonly 1-2 weeks) |
| Standard employment | 2-4 weeks (contractual) |
| Senior or management roles | 1-3 months (contractual) |
| Serious misconduct | No notice required (fair process still applies) |
There is no statutory redundancy or severance pay in New Zealand; any redundancy compensation is only what the employment agreement provides. Redundancies must be genuine, follow a fair consultation process, and consider redeployment before being confirmed.
Hiring Someone from Overseas?
The main route is the Accredited Employer Work Visa (AEWV), which requires an accredited employer, labor market testing, and pay at least at the New Zealand market rate for the role. Applications typically take 4-8 weeks. Australian citizens and permanent residents have automatic work rights and need no visa. Talk to Toku before extending an offer to a candidate who needs sponsorship.
Last verified July 2026. This guide is for general information and doesn't constitute legal or tax advice. Your Toku account manager can confirm specifics for your situation.