Our lawyers in New Zealand can help you meet the requirements for payroll in New Zealand.
Employers in New Zealand have several duties towards their employees, such as timely salary payments, making deductions, and contributions.
| Quick Facts | |
|---|---|
| Assistance for handling payroll matters | Our team supports employers with a wide range of services, including those for handling payroll. |
| Minimum wage calculation in New Zealand | Varies each year, as established by the Government. |
| Types of allowances | For work travel, trainings, conference, others |
| Employee contributions | 3% of the received gross pay, to increase to 3.5% in April 2026 |
| Employer contributions | 3% of the employee’s gross pay, to increase to 3.5% in April 2026 |
| Other deductions | On behalf of a union, in some cases |
| Prohibited deductions from salary | As punishment for poor performance |
| Deduction for overpayments | The employer can deduct money from the employee’s pay without their consent only in limited and justified cases. |
| Premiums | Charging premiums or fees from the employee is illegal. |
| Final pay value included in payroll upon dismissal | The final wage, all holiday pay, and other owed payments (if applicable) |
| The payslip in New Zealand | Issued by the employer to the employee only if expressly provided for in the employment agreement. |
| Public holidays | Paid if they fall in a day in which the employee would usually work |
| Sick leave | Payment for sick leave is mandatory. |
| Other types of paid leave | Bereavement or family violence leave |
| Paid annual holiday in New Zealand | 4 weeks of paid annual holidays after 12 months of uninterrupted employment. |
Table of Contents
What does payroll in New Zealand entail?
Payroll is the process of managing all of the due payments in relation to the company’s employees, both to the employees and to the authorities in New Zealand.
Implementing a payroll process (via a dedicated software in most cases) is a key step in effectively managing this essential business aspect.
Outsourcing payroll services in NZ can be common for all companies, especially for medium and large ones. The practice also has clear advantages in terms of compliance for small companies.
What obligations do employers have in terms of payroll processing in New Zealand?
Below, our lawyers in New Zealand list the main aspects that are mandatory for employers:
- Minimum employment rights: signing an employment agreement with all of the employees and meeting the minimum wage requirements;
- Mandatory filings: these are made with the Internal Revenue Department and include information about the social security contributions and deductions, as well as other details about the pay;
- Social security contributions: these include the KiwiSaver superannuation scheme (for employees that have opted into it) and the PAYE tax;
- Record keeping: the employer is required to keep the payroll records for at least 7 years; this also includes information about the employees who are no longer employed with the company.
Information about payroll is also summarized in the infographic below:
Do I have to issue a payslip in New Zealand?
No, employees are not issued a payslip unless this is stipulated in their employment agreement.
While individual payslips are not issued, the employer has the obligation to keep certain records.
Upon request, an employee in New Zealand can ask for information regarding:
- Their wages and time records;
- Holiday and leave records.
The information included therein will provide details on the number of worked hours, how much holiday leave they have taken, or the pay rate.
How are gross earnings calculated in New Zealand?
In New Zealand, gross earnings refer to the entire amount payable to the employee, before deductions.
Gross earnings include:
- The salary, as stipulated in the employment agreement;
- Allowances, excluding reimbursing allowances;
- Overtime hours;
- Bonuses or other performance payments;
- Annual holiday and public holiday payment;
- Payment for sick leave or other types of leave;
- Compensation payable under the Accident Compensation Act 2001;
- Any other payments, as may be included in the individual employment agreement.
Are there cases in which employees are entitled to additional pay?
Employees must be paid for public holidays in New Zealand. Working on a public holiday entitles an individual to at least one-and-a-half times the regular pay rate.
Overtime is not necessarily paid at a higher rate; however, the extra hours are included in the gross earnings (the hours are included in the worked time).
Is there a minimum wage in New Zealand?
Yes, minimum wage rates apply to every employee in New Zealand. Our team presents the current minimum rates, before tax, effective starting on April 1st, 2026:
- Adult employee: $23.95 per hour; $191.60 per 8-hour workday or $958 for a 40-hour work-week;
- An individual who is starting out in a certain job: $19.16 per hour; $153.28 for an 8-hour workday; $766.40 for a 40-hour work-week;
- A person who is in training for a specific job: the same as for the starting-out case, with $19.16 per hour.
What services do you offer for payroll-related matters in New Zealand?
Payroll processing and management, as well as social security contributions management, are all part of the services offered by our local team of New Zealand accountants.
We tailor our services to fit the needs, the size, and the number of employees of the business.
Some common payroll services include:
- Paying employees: setting up payroll in New Zealand means making the due payments to your employees according to a schedule; this also includes calculating the pay according to the types of leave the employee is entitled to;
- Employee deductions: KiwiSaver deductions, as well as the PAYE tax (pay as you earn); other payments apply according to the type of employees;
- Issuing payslips: providing the documents that prove the payment (only mandatory if stipulated in the employment agreement);
- Payroll records: dedicated services for storing the legal information that needs to be kept for a minimum amount of time.
Are payroll services included in accounting in New Zealand?
Payroll is a distinctive part of accounting, and it is included in most packages. It should not be confused with general accounting.
Our accountants in New Zealand offer complete payroll services for companies, irrespective of their size and total number of employees.
We assist with the calculations for annual leave, PAYE calculations, as well as IRD filing and payments, as needed.
Most payroll providers in New Zealand will offer standard packages that focus on the payment of the employees and the required deductions and submissions.
If you would like to know more about the packages and options offered by payroll providers in NZ, please reach out to our team.