Employer of Record (EOR) in New Zealand - Employment Laws, Payroll, Hiring

Employer of Record in New Zealand‍

Skuad’s New Zealand EOR (Employer of Record) solution can help you expand your business in New Zealand without setting up any subsidiary in the country. Skuad’s automated global HR platform can seamlessly manage end-to-end hiring, employment contracts in New Zealand, payroll, benefits, and compliances for you. Skuad aims to give its clients a stress-free business diversification experience in New Zealand. Make the best use of business opportunities in New Zealand with Skuad’s EOR solutions. Connect with Skuad experts to know more about it.

New Zealand at a Glance

Population: 5.3 million

Currency: New Zealand Dollar (NZD)

Capital city: Wellington

Languages spoken: English and Maori

GDP: USD 248.1 billion

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Employment in New Zealand

New Zealand has a comprehensive social security system. It is a non-contributory system wherein, neither the employees nor the employers contribute to the majority of the social security funds. However, self-employed individuals and employees must contribute to the ACC – Accident Compensation Corporation Scheme. It offers financial benefits to the workers who have met with an accident during working hours.

Permanent residents, foreign workers, and New Zealand nationals who are temporarily employed in the nation are also covered under social security schemes. WINZ – Work and Income New Zealand oversees all the social security benefits in New Zealand.

Entitlements

Explanation

Statutory Working Hours

According to the New Zealand labor laws, statutory working hours can range between 7.5 hours to 8 hours per day. However, there is no minimum limit to working hours.

Overtime

Employees generally receive overtime payment if their companies ask them to work beyond statutory working hours. According to the New Zealand employment laws, it is a mandate to include an overtime clause in the employment agreement.

Furthermore, employees working on a public holiday are entitled to get 150% of their pay on that day. That’s not all, they also get one working day off instead of it.

Paid Public Holidays

New Year’s Day – 1st January
Day After New Year’s Day – 2nd January Saturday or 4 January Monday
Waitangi Day – 6th February Saturday or 8th February Monday
Good Friday – 2nd April
Easter Monday – 5th April
Anzac Day – 25th April Saturday or 26th April Monday
Queen’s Birthday – 7th June
Labor Day – 25th October
Christmas Day – 25th December Saturday or 27th December Monday
Boxing Day – 26th December Sunday or 28th December Tuesday

Pension / Superannuation

There is a 3-pillar pension system in New Zealand that comprises Public Pensions, Occupational Pensions, and the Kiwi Saver Scheme. Employees above 65 years are eligible to get superannuation benefits. The current pension rates in New Zealand are:

Qualifying As	Weekly Rate	Annual Rate
Single and living alone	$437	$22,721
Single and Sharing	$403	$20,973
Civil union, married or De Facto couple in which only one partner qualifies and the other is not included.	$336	$17,478
Civil union, married or De Facto couple in which both partners qualify	$672	$34,955
Civil union, married or De Facto couple in which one partner is eligible and the other is included	$639	$33,225

Legislative Leaves

Paid Annual Leave – Employees get a paid annual leave of 4 calendar weeks in New Zealand. However, casual employees get an 8% holiday pay instead of these annual leaves. Cash compensation for unused annual leaves is only possible in the cases of termination of the employment agreement in New Zealand.
Maternity Leave – Women employees are entitled to get 26 weeks of paid maternity or primary child care leave during their employment. That’s not all, they also get a sum of $177 to $585.80 per week from the government. Please note that this amount is taxable. Apart from this, women who suffer from stillbirth or miscarriage also get a paid leave of three days from the employer.
Paternity Leave – It is also known as partner leave. The employees are entitled to get a 1-week of unpaid paternity leave after working for 6 months in the company. However, employees who have completed 12 months of service are eligible to get 2 weeks of unpaid paternity leave. Please note that employees can take this leave within 21 days before or after the delivery. In case of stillbirth or miscarriage, fathers also get a paid leave of 3 days.
Parental Leave – It covers both maternity and paternity leaves. It comprises special leave, primary care leave, extended leave, partner leave, and negotiated carer leave in New Zealand. Parents who go through stillbirth or miscarriage also get 3-days of paid leave.
Sick Pay Leave – Employees who have completed 6 months of employment are eligible for 5-day paid sick leaves. Moreover, the employees who have completed 12 months of employment get 10 days of paid sick leave. The employers are liable to pay for the sick leaves of their employees. Please note that any outstanding sick leave during employment termination is also eligible for payment. Learn more about employee health benefits in New Zealand.

Contractors vs Full-Time Employees

One of the most crucial decisions that employers have to make while diversifying business in New Zealand is to decide between choosing contractors or full-time employees. Please note that New Zealand’s Employment Laws treat independent contractors differently from full-time employees. Therefore, it is essential to select the right kind of workforce for your business augmentation project.

Companies that are going to have a short-term expansion project in New Zealand should consider hiring contractors. The best part is, that you do not need to bear any overhead costs like employee benefits, payroll taxes, and statutory payments. However, you might attract penalties and legal actions if you fail to fulfill the mandatory requirements.

On the other hand, hiring full-time employees will prove to be a wise decision if you are planning for a long-term business expansion project. Although it multiplies your responsibilities and liabilities, it will also create a loyal employee base for you.

Skuad is an expert on employment contract law in New Zealand. Our experienced in-house team can hire employees in New Zealand, and handle their payroll, taxation, and other statutory compliances for you. Book a demo to know more.

Hiring in New Zealand

New Zealand has a moderately open and deregulated economy. It is one of the safest countries for business diversification. New Zealand is a small economy and therefore welcomes investors to set up their businesses here. There are two options when it comes to setting up a remote working team there; using the top job boards or partnering with hiring companies in New Zealand. Let us have a look at both the options:

Job Monster, New Kiwis, Careers, and Student Job Search are the highest-rated and free job boards in New Zealand. Indeed, SEEK, Jora, Adzuna, and Jobster NZ offer both free and paid services. However, there are certain pros and cons of relying on this mode of hiring. There is no second thought that you can find exceptional talent on these portals. But, at the same time, some employers have also encountered misleading and fake profiles here.

To avoid such unfortunate incidents, companies should collaborate with the employers of record companies in New Zealand like Skuad. It takes care of all the employee background screenings ensuring the best employee base for you. Click here to know more about Skuad’s employers of record EOR solutions.

Probation & Termination: What You Should Know About Probation & Termination In New Zealand?

Probation

The standard probation period in New Zealand is 90 days. However, it can be extended to even 6 months, as per the mutual understanding between both parties. Interestingly, probation laws in New Zealand apply to companies that have 19 or fewer employees.

The final probationary period in New Zealand must be agreed upon by both the employee and employer during hiring only. It is the best time for the employer to test the skills and traits of the employee. And the best time for an employee to determine the quality of work in the company.

Termination

Companies cannot right away dismiss employees unless it is for some serious misconduct. They must have a valid reason to terminate the services of an employee. Moreover, the employer also has to inform the employee in advance about the termination of the employment agreement in New Zealand. The notice period, in this case, ranges between 2-4 weeks.

At times, the employees qualify to receive severance pay from their employers. The total working hours and unused paid leaves form a major part of severance pay. Is there any scope for additional payments? Yes, only if it is explicitly mentioned in the agreement or negotiated in the leaving package. Employees also have a right to sue the employer, in case they do not receive their promised severance amount.

Understanding all the probation and termination laws can prove to be a daunting task for you. It can also distract you from focusing on your business augmentation goals. To alleviate such challenges, you should consider partnering with Skuad. With operations in over 150 countries, we will handle all your probation and termination requirements and offer you a hassle-free business expansion experience in New Zealand. Click here to know more about it.

EOR Solution

The employer is responsible for handling all the employment liabilities, tasks, and legal processes of setting up a remote team.

Skuad’s unified and automated HR platform handles onboarding, timesheets, taxes, compliances, employee benefits, and payroll for your remote team. Utilizing Skuad’s unified employment platform sets you free from the hassles of complex work permit formalities, visa processing, and government statutory management. It will give you ample time and resources to refine your business diversification strategies in New Zealand.

Book a demo today to know more.

Types of Visas

There are different types of visas in New Zealand that allow immigrants to start a new life in New Zealand. Many people prefer this country for a relocation because there is a high demand for new talent here. However, only a handful of visa applications are approved per country. Apart from that, the visa application timeframe is also stringent here. Let us have a look at the different types of work visas in New Zealand.

Type of Visa	Explanation
Working Holiday Visa	A Working Holiday Visa allows people to work in New Zealand for 12 months. However, people from Canada and the UK can stay in New Zealand for 23 months through this visa. People are free to work for any company temporarily. But they need to apply for another visa if they want to extend their employment contract. Age Limit – 18 to 30 or 18 to 35 as per the Working Holiday Scheme Cost - $280 Processing Time – Up to 31 days
An Essential Skills Visa	People who move to New Zealand for full-time employment need to take this visa. It is a temporary visa that has a validity of up to 5 years. However, employees do not get a residence permit with an Essential Skills Visa. Age Limit - There is no age limit to apply for this visa. Cost - $495 Processing Time – 64 days
Work to Residence Visa	It is a work visa that offers you the right to residence after 24 months. It is an ideal visa for people who have full-time employment in New Zealand and will eventually settle there permanently. However, people who have worked for more than 2 years for the same employer can apply for residence in New Zealand. Age Limit – Below 55 years Visa Duration – 30 months Cost - $635 Processing Time – 76 days to 4 months
Skilled Migrant Visa	It is a type of visa that offers indefinite stay in New Zealand. It is given to the employees who have skills, experience, and qualifications that will have a long-term requirement in the country. Applicants need to send an EOI – Expression of Interest, wherein, you can claim a score for your skills. The New Zealand Work Permit Authority will use a point-based system to examine your EOIs. Applicants who are successful in getting the minimum score are eligible to get a Skilled Migrant Visa. Age Limit – Below 55 years Visa Duration – Indefinite Cost – $530 for EOI and $2,710 for Application Processing Time – Up to 15 months
Visa for Investing in New Zealand	Investor 1 Resident Visa – Employers who are planning to invest 10 million NZD in the country in the next 3 years can stay here indefinitely. Investor 2 Resident Visa – Investors who are below 65 years of age and intend to invest 3 million NZD in the next 4 years can also reside in New Zealand indefinitely. Please note that only 400 investors can get this type of visa.

Here is a list of mandatory documents for getting a work visa In New Zealand:

Original passport with a validity duration of 6 months.
Recent photographs with white background.
Proof of good health and good character.
Copy of visa application along with a cover letter describing the purpose of visit to the country.
At least 6 months bank statement to prove your financial viability to survive in New Zealand.
Copies of valid credit cards with their detailed statement.
Round trip air tickets with the itinerary.
Employees have to submit their job confirmation letter, salary slips of the past 3 months, and original relieving letter from the past employer.
Pick the appropriate visa category that clearly explains your purpose of visiting New Zealand.
If your family members are accompanying you, make sure all their documents are complete and their expenses are met.

The process to apply for a work visa in New Zealand is as follows:

Submit all the relevant documents at the New Zealand Visa Application Centre
Deposit visa fee
Please note that no Embassy interviews will be held to check and verify your documents.
The New Zealand Immigration officials will approve all the documents and forward them for processing.

Work Permits

INZ - Immigration New Zealand, formerly known as NZIS – New Zealand Immigration Services, is responsible for administering all visa applications, immigration requests, and border control in the nation. INZ is an agency that works under MBIE – Ministry of Business, Innovation, and Employment.

Understanding New Zealand’s work visa requirements and work permit formalities can prove to be an overwhelming task for companies. If you plan to expand your operations in New Zealand and want to obtain a New Zealand work permit for foreigners, collaborate with Skuad. Skuad's EOR solution can streamline government approvals and document collection processes for New Zealand work visas. Connect with Skuad experts today to know more about getting work permits in New Zealand.

Payroll & Taxes

Standard payroll frequency in New Zealand is either monthly or bi-weekly. However, employers have the ultimate authority to decide the payroll frequency for their employees. Moreover, The provision of the 13th salary does not exist in this nation. Let us have a look at Payroll & Taxes in New Zealand.

Incorporation

Foreign companies can establish their subsidiary units in New Zealand, provided they satisfy all the work permit requirements. Different regions and cities have different costs, rules, and resource availability in New Zealand. Connecting with an industry expert to identify the best location for your business will prove to be a wise move here. Let us have a look at the basic steps of incorporating a holding company in New Zealand.

Setting up an online service account
Selecting a unique name for your subsidiary
Gather information about company details, tax registration, directors, and shareholders
Complete the online company registration form
Submit shareholders and directors consent forms
Get a certificate of incorporation

Do you want to expand your business in New Zealand without setting up a physical entity there? Skuad’s New Zealand EOR solution can simplify this process for you. We can help you set up a remote team there and handle all employment compliances and regulations. Talk to a Skuad expert today to know more about it.

What Is PEO? Understanding The Basic Difference Between PEO And EOR

Professional Employer Organization (PEO) acts as your co-employer. It manages the end-to-end HR and administration functions of your remote team. The professional employer organization in New Zealand will be an administrative employer, whereas you will play the role of a work-site employer. However, all the major employee-related decisions will exclusively lie with you and not the PEO.

An EOR, on the other hand, acts as the legal employer of your remote team and will make all employee-oriented decisions relieving you from getting involved in the day-to-day HR decisions.

Employers who want to focus on their business scale-up should opt for an EOR solution. Right from hiring, onboarding, payroll, taxes, and termination, Skuad’s New Zealand EOR solution will handle everything for you. Skuad’s unified employment platform offers a hassle-free business expansion process. Find out more about Skuad here.

Conclusion

Do you know that New Zealand rules at the number one position when it comes to ease of doing business? Moreover, its stable and thriving political system, economic freedom, innovation and creativity, unmatched quality of life, and transparent business policies, make it a promising place to invest. Its low-rate broad-based tax system and evidence-based and streamlined regulations offer strong financial protection to employers.

Still, New Zealand’s business market has its share of complexities. Are you also planning to step into the business domain of New Zealand? If yes, collaborate with Skuad’s New Zealand EOR to sail through smoothly. Our unified employment platform will handle all your cross-border payments, payroll, compliances, benefits, taxes, and work permits in New Zealand ensuring your complete focus on your business scale-up.

Apart from this, Skuad experts can also help you in exploring the best talent on a global scale. So what are you waiting for? Contact Skuad to know more.

FAQs

1) What is an employer of record in New Zealand?

In New Zealand, an employer of record is a service provider that employs staff on behalf of foreign companies, ensuring compliance with New Zealand’s employment regulations, managing payroll, and handling tax submissions without the need for the foreign company to establish a local entity.

2) What is the employer of record for international employees?

An employer of record (EOR) is a service companies use to employ and pay workers on their behalf in foreign countries. The EOR handles all compliance, payroll, and HR responsibilities, allowing the company to focus on its core operations without setting up a legal entity abroad.

3) What is an employer of record vs PEO?

An employer of record (EOR) legally employs individuals on behalf of another company and handles all compliance, payroll, and HR tasks. A Professional Employer Organization (PEO) co-employs staff, sharing responsibilities with the client company but typically requires the client to have an established business entity in the country.

4) What are the requirements for employers in New Zealand?

Employers in New Zealand are required to comply with local employment laws which include providing fair working conditions, adhering to minimum wage laws, ensuring workplace safety, and registering with relevant tax authorities for employee contributions. Click here to learn more about employer contributions in New Zealand.

5) What is the Employment Standards Act, NZ?

The Employment Standards Act in New Zealand sets out the minimum employment rights and obligations, including minimum wage rates, leave entitlements, working hours, and the resolution of employment disputes. It ensures fair treatment in the workplace for all employees.

6) What are the responsibilities of employers in New Zealand?

Employers in New Zealand are responsible for ensuring a safe working environment, adhering to employment contracts and laws, paying employees correctly and on time, providing paid leave, and maintaining accurate employment records. They must also engage in good faith employment practices.

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Employer of Record in New Zealand‍