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Minimum wage in New Zealand

New Zealand payroll

Social security benefits in New Zealand

Other employee benefits in New Zealand

Simplify your global payroll with CXC

Payroll in New Zealand

Managing payroll in New Zealand can be quite a challenge, especially for international companies. Not only is there a need to navigate through wage calculations and pay disbursements, but you must also keep up with the intricacies of local tax laws and regulations, including PAYE (Pay As You Earn) and other statutory requirements. Mishaps in payroll management can result in fines, audits, or legal complications, which may lead to dissatisfied employees.

Payroll outsourcing in New Zealand

To navigate these complexities, modern companies are increasingly turning to payroll outsourcing. This strategic approach relieves the burden of understanding and staying updated with the local compliance landscape. Established payroll providers, such as CXC, are experts in the field, well-versed in the nuances of local laws, regulations, and compliance obligations.

This ensures payroll is managed efficiently and accurately, reducing the risk of payroll errors and associated penalties. Most importantly, outsourcing allows businesses like yours to focus on their core operations without being sidetracked by the administrative payroll process and compliance, saving you time and resources in the long run.

In this detailed guide, we delve into all the aspects you need to manage payroll effectively in New Zealand. We cover essential topics such as the minimum wage, social security contributions, employee benefits, and other critical factors to ensure that your payroll operations are fair, compliant, and conducted with the utmost integrity. Moreover, you’ll gain the knowledge necessary to execute payroll with confidence, supporting your company’s growth and employee satisfaction in this dynamic market landscape.

Minimum wage in New Zealand

As of 2026, New Zealand’s adult minimum wage is NZD 23.95 per hour for employees aged 16 years and over. This rate applies nationwide and represents the statutory wage floor—employers are free to pay more, but not less.

For a standard 40-hour workweek, the adult minimum wage equates to approximately:

NZD 958.00 per week (gross).
NZD 49,816 per year (gross).

There is no maximum wage limit in New Zealand. Many employers, particularly in competitive or specialised sectors, pay above the minimum wage to attract and retain skilled talent.

New Zealand also maintains other minimum wage categories, including:

Starting-out wage (for certain young workers).
Training wage (for employees undertaking recognised training).

These rates apply only under specific statutory conditions.

For employees working under certain work visas, employers must also ensure wages meet immigration-related minimum pay thresholds, which may be higher than the statutory minimum wage.

Minimum wage in New Zealand after tax

The minimum wage is stated as a gross amount, before income tax and other deductions.

An employee earning the adult minimum wage and working 40 hours per week can expect an approximate net income of:

NZD 41,000–42,000 per year, depending on individual tax circumstances.
NZD 790–810 per week.
NZD 3,400–3,500 per month.

Actual take-home pay varies based on tax brackets, KiwiSaver contributions, student loan repayments, and eligibility for tax credits.

New Zealand payroll

Payroll laws in New Zealand

There are several laws and regulations governing payroll operations in New Zealand to ensure employees are paid fairly and in compliance with the country’s labour standards. The major laws covering payroll include:

Employment Relations Act 2000 (ERA 2000): This act provides the foundation for employment relationships, including good faith obligations, collective bargaining, and the resolution of employment disputes.
Holidays Act 2003: Governs employee entitlements to public holidays, annual holidays, sick leave, and bereavement leave, ensuring workers are compensated correctly for time off.
Minimum Wage Act 1983: Sets out the minimum wages that must be paid to employees, including special rates for training and starting-out workers, ensuring all workers receive a fair minimum wage.
Wages Protection Act 1983: Regulates the payment of wages, ensuring that employees receive their correct wages and deductions are made legally.
Parental Leave and Employment Protection Act 1987: Outlines employees’ entitlements relating to parental leave, including maternity, paternity, and adoption leave, supporting workers’ rights to take leave associated with childbirth or adoption.
KiwiSaver Act 2006: Establishes a voluntary, work-based savings initiative to encourage long-term saving for retirement, including employer contributions to employees’ KiwiSaver accounts, which impacts payroll operations.
Income Tax Act 2007: Details the requirements for deducting Pay As You Earn (PAYE) tax from employees’ wages, along with other payroll-related deductions like student loans and child support payments.

These laws collectively ensure that the payroll process in New Zealand is fair, transparent, and upholds the rights and obligations of both employers and employees. Employers must stay informed and comply with these regulations to avoid any legal repercussions.

Payroll rules to keep in mind in New Zealand

To ensure that employees are paid fairly and on time, there are payroll rules set in place that employers should keep in mind, including:

Keeping accurate and detailed employee records: Employers must keep this record for a period of seven years. These records include information about wages, time worked, holiday, and leave entitlements. Failing to keep these records correctly can result in penalties of up to 100,000 NZD for employers.

In addition, employers must guarantee the full and timely payment of wages, as well as the lawfulness of any deductions, including taxes and KiwiSaver contributions. To remain compliant, employers should stay updated with the latest changes in local laws and regulations.

Employer payroll tax in New Zealand

There are several payroll-related taxes and deductions that employers must withhold from their employees’ earnings and remit to the Inland Revenue Department (IRD). Here is a list of the main payroll taxes for which employers are responsible:

PAYE (Pay As You Earn): This is the income tax that employers need to deduct from employees’ or contractors’ salary, wages, or schedular payments.
Accident Compensation Corporation (ACC) Levies: Employers pay ACC levies, which provide coverage for work-related injuries.
KiwiSaver contributions: If the employee is a member of the KiwiSaver retirement scheme, the employer must deduct the employee’s chosen contribution rate from their pay and submit this to IRD. Employers are also required to contribute a minimum amount towards the employee’s KiwiSaver.
ESCT (Employer Superannuation Contribution Tax): This tax is applied to the employer’s contributions to their employees’ KiwiSaver or other registered superannuation schemes.
Student loan repayments: If the employee has a student loan, the employer has to deduct repayments from their salary or wages once their income is above a certain threshold.
Child support: If instructed by the IRD, employers may be required to deduct child support payments if instructed by the IRD.

Payroll tax rate in New Zealand

Payroll taxes for businesses vary depending on the type of entity. Most companies are taxed at 28%, while Māori authorities are taxed at 17.5%.

For individuals, the tax rate is determined based on their income bracket, and specific rates apply for different types of income and benefits. An essential part of payroll in New Zealand is the Pay As You Earn (PAYE) system, which includes deductions for income tax and accords with the KiwiSaver scheme, where employees can choose a contribution rate of either 3%, 4%, 6%, 8%, or 10% of their before-tax pay, with 3% being the default rate.

Payroll cycle in New Zealand

The payroll cycle frequency is largely at the employer’s discretion; however, the most common payroll frequencies are monthly or biweekly. This flexibility allows businesses to choose a payroll schedule that best fits their operational requirements and cash flow considerations.

13th month salary in New Zealand

The concept of a 13th month salary is not a standard or legally required practice in New Zealand.

The social security system in the country provides support to individuals and families in a variety of situations, including unemployment, disability, and retirement. One of the key components is the New Zealand Superannuation, a universal pension scheme for people aged 65 and above.

These benefits are administered by Work and Income and can include support for living expenses, assistance for health and disability-related costs, help with urgent costs, and payments for carers of individuals with health conditions, injuries, or disabilities.

For example, living expenses benefits might cover heating and power bills, and urgent costs benefits could assist with house maintenance or bereavement-related expenses. Support services include pension schemes such as New Zealand Superannuation or Veteran’s Pension, and social security agreements that New Zealand has with other countries to support people who have lived or worked overseas.

There are also social security benefits relating to relationships, such as support for those in violent relationships or experiencing a family breakdown.

The system also includes contributions towards the KiwiSaver scheme, which is a voluntary, work-based savings initiative to help with long-term savings for retirement, with employers matching the contribution of their employees to the scheme.

Social security contributions in New Zealand

In New Zealand, the social security contributions primarily consist of the compulsory employer contributions to the KiwiSaver scheme and the Accident Compensation Corporation (ACC) levy.

Employers are required to match their employees’ contributions to KiwiSaver, which is a long-term savings initiative to help with retirement. The minimum contribution for KiwiSaver is set at 3% of an employee’s gross salary but can be chosen by employees to be higher, up to 10%.

Moreover, all businesses in New Zealand contribute to the ACC, a no-fault scheme that covers the cost of treatment and recovery for all citizens, residents, and temporary visitors who suffer personal injuries.

KiwiSaver in New Zealand

KiwiSaver is a voluntary, work-based savings initiative in New Zealand aimed at helping residents save for their retirement. Managed by independent KiwiSaver providers, members can choose a scheme to manage their savings, and it is designed for all New Zealand citizens and permanent residents living in the country. Membership does not affect eligibility in New Zealand. KiwiSaver allows for regular contributions to be made directly from an individual’s pay or via direct payments to their scheme provider.

Other employee benefits in New Zealand

Businesses often offer non-statutory employee benefits to attract, retain, and motivate top-tier talent. These benefits, not mandated by law but offered voluntarily, play a crucial role in creating a competitive workplace and can significantly enhance employee satisfaction and loyalty.

Here are some commonly provided non-statutory employee benefits in the New Zealand market:

Health insurance in New Zealand

Coverage for medical, dental, or optical treatments can distinguish your company as an employer who genuinely cares about the wellbeing of its staff.

Retirement savings plans in New Zealand

Contributions to KiwiSaver that exceed the required employer contribution rate or other retirement fund options can help employees feel secure about their future.

Professional development in New Zealand

Investing in your employees’ growth through training, courses, and certifications not only helps their professional development but also benefits your organisation by enhancing their skills and knowledge.

Flexible working arrangements in New Zealand

Offering flexibility in work hours or the opportunity for remote work can significantly enhance work-life balance for your employees, which can lead to increased job satisfaction and productivity.

Wellness programs in New Zealand

Initiatives such as gym memberships, wellness apps, or on-site wellness facilities support employees’ health and fitness, which can reduce healthcare costs and absenteeism.

Employee Assistance Programs (EAP) in New Zealand

Providing confidential counselling services for personal or work-related issues shows a commitment to employees’ mental health and overall wellbeing.

Performance bonuses and incentives in New Zealand

These can motivate employees to excel and align their goals with the strategic objectives of your business.

Additional leave in New Zealand

Offering additional leave beyond statutory requirements—like study leave, volunteer days, or enhanced maternity and paternity leave—can make your company more attractive to employees.

Implementing these benefits can set your business apart in a competitive market. It’s essential to communicate these benefits effectively to your workforce to ensure they are fully utilised and appreciated. Always consider the specific needs and preferences of your workforce when choosing which benefits to offer.

Simplify your global payroll with CXC

At CXC, we understand the challenges involved in managing global payroll. That’s why we’re committed to making international payroll as smooth and seamless as possible. Whether you need to manage your entire workforce across several countries or just a handful of international remote workers, we provide payroll services tailored to meet your specific business needs and requirements.

Read about EoR services

FAQ's

How does payroll work in New Zealand?

Payroll in New Zealand requires employers to calculate gross pay, deduct employee taxes and other required deductions, make applicable employer contributions, pay employees and report payroll information to Inland Revenue (IRD).

The main deduction is Pay As You Earn (PAYE) income tax, which the employer withholds from the employee’s salary or wages and pays to IRD. Payroll may also include KiwiSaver retirement contributions, student loan repayments and child support deductions where applicable.

Employers must report employee pay and deductions through payday filing, generally within two working days of each payday when filing electronically. Payday filing and payment of the deductions are separate obligations. Small and medium employers generally pay PAYE and other deductions monthly by the 20th of the following month, while employers with combined annual PAYE and ESCT above NZD 500,000 generally pay twice monthly.

New Zealand payroll must also calculate holiday and leave pay correctly under the Holidays Act 2003. This can require different calculations depending on the employee’s normal pay and working pattern.

In summary, payroll in New Zealand combines salary payments with PAYE, KiwiSaver, leave calculations and mandatory payday reporting.

What is payday filing in New Zealand and how does it work?

Payday filing means employers must report employee pay and payroll deductions to Inland Revenue every time employees are paid.

The information reported includes the payday, pay period, employee earnings, PAYE deductions and other applicable payroll deductions and contributions.

If payroll information is filed electronically, it must generally reach IRD within two working days of payday. Employers can file through their myIR account or directly through compatible payroll software. Employers with combined annual PAYE and Employer Superannuation Contribution Tax (ESCT) of NZD 50,000 or more must file electronically. Eligible paper filers generally have 10 working days after payday, with an alternative twice-monthly paper-filing option.

This means an employer paying employees weekly normally has a payday filing obligation every week. A fortnightly payroll generally creates a filing obligation every fortnight.

Employers must also add new employees to their payroll reporting and provide the required employee and KiwiSaver information.

How do you set up payroll in New Zealand?

To set up payroll in New Zealand, a business must register as an employer with Inland Revenue, collect employee tax information, set up KiwiSaver and ACC requirements, and establish payday filing.

The main steps are:

Register as an employer with Inland Revenue (IRD) through myIR.
Collect each employee’s IRD number and tax code so PAYE can be calculated correctly.
Complete new employee reporting using the required IRD employee information.
Set up KiwiSaver, including automatic enrolment for eligible new employees and employer contributions where required.
Confirm the correct ACC classification, as employers pay an ACC Work levy based on their business activity and liable payroll.
Set up payday filing so employment information is reported to IRD after each payday.
Configure holiday and leave pay to meet Holidays Act requirements.

When should companies outsource payroll in New Zealand?

Companies should consider outsourcing payroll in New Zealand when local tax reporting, KiwiSaver, ACC or holiday-pay calculations become difficult to manage accurately in-house.

The Holidays Act 2003 is a particularly important New Zealand payroll issue. Annual holiday pay can require comparisons between ordinary weekly pay and average weekly earnings, while other leave payments can use relevant daily pay or average daily pay. Although the Employment Leave Act 2026 has passed into law, the current Holidays Act remains in force until 6 August 2028. Employers cannot apply the new rules early and should plan payroll-system changes well before the 2028 commencement date.

Payroll teams must also submit electronic payday filings within two working days of each payday.

The compliance workload increased again from 1 April 2026, when the adult minimum wage increased to NZD 23.95, default KiwiSaver contributions increased to 3.5%, and ACC levy rates changed. Employers must distinguish the new 3.5% default KiwiSaver contribution rate from the temporary 3% rate available to eligible members who obtain a temporary rate reduction. Payroll must also apply the correct ESCT treatment to employer contributions.

Outsourcing can therefore be useful for international companies without dedicated New Zealand payroll expertise or businesses managing changing hours, variable pay or complex leave calculations.

In summary, outsourcing can reduce risk where New Zealand-specific payroll calculations and reporting are difficult to manage internally.

How much does payroll administration cost in New Zealand?

Payroll administration in New Zealand can cost around NZD 4–NZD 7 per employee per month for payroll software, while fully managed payroll services can start from around NZD365 per month.

For example, current New Zealand providers advertise payroll software at around NZD 4–NZD 6.50 per employee per month, usually with an additional monthly platform fee.

For businesses that want the provider to actually run payroll, costs are higher. One New Zealand provider currently charges NZD 6.20 per employee per pay run, with a minimum fee of NZD 365 per month for managed payroll.

International payroll services can also use per-employee pricing. For example, global payroll services are currently advertised at around NZD 47 per employee per month.

Actual costs depend on headcount, pay frequency, leave calculations, KiwiSaver administration and the level of payroll support required. Other price factors can include onboarding, payroll migration, multiple pay groups, off-cycle payments, integrations, year-end support, employee self-service, foreign exchange and correction of historical Holidays Act errors.

In summary, basic payroll software can cost only a few dollars per employee each month, while outsourced or managed payroll in New Zealand typically costs more because the provider handles payroll processing and compliance.

What payroll taxes must employers pay in New Zealand?

New Zealand payroll includes PAYE income tax, KiwiSaver contributions, Employer Superannuation Contribution Tax (ESCT) and ACC levies. Some amounts are deducted from employees, while others are employer costs.

For the tax year from 1 April 2026 to 31 March 2027, the underlying individual income-tax brackets remain:

Annual income	Tax rate
NZD 0–15,600	10.5%
NZD 15,601–53,500	17.5%
NZD 53,501–78,100	30%
NZD 78,101–180,000	33%
Over NZD 180,000	39%

Employers withhold PAYE rather than paying the employee’s income tax themselves.

From 1 April 2026, the default employee KiwiSaver contribution is 3.5%, with employers generally needed to contribute at least 3.5% of gross earnings for eligible contributing employees. Employer contributions are subject to ESCT, with rates ranging from 10.5% to 39% according to the applicable income threshold.

Employers also pay the ACC Work levy. For 2026/27, the average rate is NZD 0.69 per NZD 100 of liable earnings, although the actual rate varies by industry risk classification. The average Work levy figure of NZD 0.69 is stated excluding GST. The underlying 2026/27 Earners’ levy is NZD 1.52 per NZD 100 excluding GST, but the amount incorporated into employee PAYE deductions is NZD 1.75 per NZD 100 including GST. It applies up to maximum liable earnings of NZD 156,641, producing a maximum employee levy of NZD 2,741.22 for 2026/27.

What employee benefits are legally required in New Zealand?

Employees in New Zealand are legally entitled to minimum benefits including paid annual holidays, sick leave, public-holiday entitlements and other forms of statutory leave. Eligible employees also receive KiwiSaver employer contributions.

After 12 months of continuous employment, employees receive at least four weeks of paid annual holidays. Eligible employees receive 10 days of paid sick leave each year, which can accumulate up to 20 days. Sick leave generally becomes available after six months of continuous employment or after satisfying the statutory hours-of-work test over six months. The 10-day entitlement is not proportionally reduced for eligible part-time employees under the current Holidays Act.

New Zealand also has 12 public holidays. This comprises 11 nationwide public holidays plus the employee’s relevant provincial anniversary day. Employees who work on a public holiday must receive at least time-and-a-half and, where it would otherwise be a working day, a paid alternative holiday.

Other statutory employee benefits in New Zealand include bereavement leave and up to 10 days of paid family violence leave for eligible employees. Government-funded parental leave payments can be paid for up to 26 weeks to eligible primary carers. Parental leave from employment and government-funded parental leave payments are separate entitlements with different eligibility tests. Depending on service, an employee may qualify for up to 26 weeks of primary carer leave or a total of up to 52 weeks when extended leave applies.

Eligible KiwiSaver members also generally receive a minimum 3.5% employer contribution from 1 April 2026.

What is the minimum wage in New Zealand?

From 1 April 2026, the adult minimum wage in New Zealand is NZD 23.95 per hour before tax.

The starting-out and training minimum wages are NZD 19.16 per hour, where the employee meets the specific eligibility requirements for those rates.

For an employee working 40 hours a week, the adult minimum wage in New Zealand is equivalent to NZD 958 per week before tax. For an eight-hour day, it is equivalent to NZD 191.60 before tax.

The minimum wage applies to employees aged 16 and over unless a specific minimum-wage category or exemption applies. Migrant workers have the same minimum employment rights as New Zealand workers, including the right to receive at least the applicable minimum wage.

There is no separate statutory basic salary in New Zealand for professional employees. Employers must meet the hourly minimum wage requirements, while actual salaries are normally set according to the role, experience, location and labour market.

Does New Zealand have a 13th month salary or mandatory bonus?

No. New Zealand does not require employers to pay a 13th month salary or an annual bonus. Employees are entitled to their agreed salary or wages and statutory employment benefits, but there is no general legal requirement for employers to make an additional month’s salary payment at the end of the year.

Bonuses can still form part of an employee’s compensation package. An employer may offer a performance bonus, sales incentive or other additional payment through the employment agreement or company policy.

Where a bonus is promised under the employee’s employment terms, the employer must follow the agreed conditions. Bonus payments can also affect payroll calculations, including PAYE and, depending on the payment and circumstances, holiday-pay calculations.

Bonus and incentive payments may also require PAYE, KiwiSaver deductions and employer contributions depending on the nature of the payment and the employee’s circumstances. Employers should clearly document whether a bonus is guaranteed, conditional or genuinely discretionary. This differs from countries where a 13th month payment is a statutory employment entitlement.

In summary, a 13th month salary is not mandatory in New Zealand. Bonuses are generally contractual or discretionary benefits rather than statutory employee benefits.

How can CXC reduce payroll risks for global companies in New Zealand?

CXC reduces New Zealand payroll risk by managing local payroll calculations, tax reporting, statutory contributions and employee payments through established payroll and Employer of Record capabilities.

CXC can coordinate PAYE withholding, payday filing, KiwiSaver deductions and employer contributions, leave and holiday pay, and other payroll requirements as part of the employee lifecycle.

This is particularly valuable in New Zealand because payroll involves country-specific rules that global systems can easily mishandle. Holiday pay calculations under the Holidays Act, two-working-day payday filing deadlines and changes to KiwiSaver, minimum wage and ACC rates all require payroll processes to stay current.

For international companies, CXC can also connect New Zealand payroll with onboarding, employment contracts, benefits administration, HR support and compliant offboarding. CXC’s approach combines local payroll requirements with standardised global workflows, approvals and audit trails.

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