Employer Payroll Tax
Employee Payroll Taxes
Employee Income Tax
New Zealand’s minimum wage is 20.oo NZD per hour.
Payroll frequency is the Employers choice; however, common frequencies are monthly or bi-weekly (every two weeks).
New Zealand does not have a minimum requirement. Common full-time hours are 7.5 hours to 8.0 hours per day.
The hours that are agreed to in an employment agreement are generally the only hours that an employee needs to be present at work. Overtime hours and pay should be included in the employment agreement.
Many employees receive a payment if their employer asks them to work more than their normal hours. However, there is no legal requirement to pay more than the regular salary for overtime.
Almost all employees are entitled to at least 4 weeks’ paid annual leave a year. Casual employees however get 8% holiday pay each pay instead of 4 weeks annual leave.
Unused leave is cashed out in cases of termination.
10 public holidays.
Employees are entitled to a minimum of five days paid sick leave a year after the first six months of continuous employment and an additional five days paid sick leave after each subsequent 12-month period. This is paid by the employer.
Sick leave entitlements are not pro-rated in any way. Any employee including part-time employees is entitled to five days’ sick leave a year.
Any sick leave owed at employment termination is not paid out.
Known as primary care leave, mothers are entitled to 26 weeks of maternity leave and are paid between $177.00 to $585.80 by the government per week before tax.
Mothers who suffer from a miscarriage or a stillbirth are also entitled to three days of paid leave.
Known as partners leave, a spouse or partner is given one-week unpaid leave after six months of employment and two weeks of unpaid leave after 12 months of employment. Leave can be taken any time within the period of 21 days before or after the birth.
Fathers who suffer from a miscarriage or a stillbirth are also entitled to three days of paid leave.
Parental leave in New Zealand covers maternity and paternity leave and is comprised of primary care leave, special leave, partners leave, extended leave, and negotiated career leave.
Parents who suffer from a miscarriage or a stillbirth are also entitled to three days of paid leave.
- Special Leave-10 days of unpaid leave are given for pregnancy-related appointments.
- Extended Leave – This is extended unpaid leave given to parents and depends on the amount of time an employee has worked. 52 extra weeks can be taken for a parent who has been employed for at least 12 months, and 26 weeks is given to a parent who has been employed for at least 6 months.
An employer must tell their employee in advance when the employer is going to end the employee’s employment (unless the employer is going to dismiss the employee without notice for serious misconduct).
Just because an employment agreement contains a notice period doesn’t mean that the employer can dismiss the employee for any reason as long as they give the appropriate notice. The employer must still have a good reason and must follow a fair process. This also includes fixed-term agreements.
An employee must tell their employer in advance when they want to leave employment (generally outlined in the employment agreement).
Depending on the role 2 to 4 weeks’ notice is often seen as fair.
Notice of redundancy
If there is no specific clause in an employment agreement giving a period of notice in a redundancy situation, ‘reasonable notice’ must be given. The length of ‘reasonable notice’ depends on a variety of factors, such as:
- the reason for the redundancy
- the employee’s length of service
- the employee’s seniority and/or remuneration package
- custom, practice and industry norms
- the employee’s ability to find alternative employment
the amount of compensation being paid (if any).
Severance payments include the hours worked until the final day and any unused annual leave or days in lieu payments. Additional payments are either specified in the employment agreement or negotiated as a part of the leaving package. If employees do not receive all components of their payments, they may file a claim for unpaid salary or other breaches of the employment agreement.
Only an employer with 19 or fewer employees (at the beginning of the day on which the employment agreement is entered into) may employ a new employee on a trial period for the first 90 calendar days of their employment.
A valid trial period must be agreed to in the employment agreement before the employee starts work, or the trial period is invalid.
A trial period must have a valid notice period in the employment contract, can be used in any industry and for any job and must be agreed by the employer and employee in good faith – an employee can’t be forced into being employed on a trial period.
Employers can test the skills of a new employee or a current employee moving to a new position through using a probation period. Probation periods can last for any amount of time (the standard length is around three to six months) but the length of time must be recorded in the employment agreement.
GST is 15% standard rate.