Employer of Record in New Zealand

Hire, Onboard and Pay Employees in New Zealand Quickly and Efficiently
Abhirup Nath

New Zealand at a glance

CURRENCY
New Zealand Dollar (NZD)
public/bank holidays
10 days
capital
Wellington
Language
English; Maori; New Zealand Sign Language
date format
dd/mm/yyyy
tax year
1 April - 31 March
Payroll frequency
Bi-Monthly/Monthly
gdp
$247.23B (2022)
Working Hours
7.5 hours to 8.0 hours per day.

New Zealand is globally recognized for its high quality of life, transparent regulatory environment, and skilled workforce. Known for its innovation in agriculture, clean energy, film production, ICT, and healthcare, the country attracts global businesses seeking talent in both traditional industries and emerging technology sectors.

The government actively promotes a business-friendly climate with straightforward tax structures, strong legal protections, and a focus on sustainability. Cities like Auckland, Wellington, and Christchurch serve as thriving hubs for finance, digital innovation, and research, while regional areas contribute to agribusiness and renewable energy.

However, hiring in New Zealand comes with compliance challenges. Employers must navigate the Employment Relations Act, Holidays Act, and Health and Safety at Work Act, each of which sets strict obligations for employment contracts, wages, benefits, and workplace protections. Setting up a local entity can take time and add administrative overhead.

By working with an Employer of Record (EOR) like Gloroots, businesses can hire in New Zealand quickly and compliantly, without needing a legal entity. Gloroots manages payroll, benefits, and compliance while ensuring global compliance, enabling you to focus on business growth.

What are the key facts about New Zealand’s economy and workforce?

New Zealand has a highly developed, open economy, consistently ranked among the most business-friendly worldwide. With a GDP per capita of over USD 48,000, it combines traditional strengths in agriculture and tourism with emerging growth in ICT, film, biotechnology, renewable energy, and financial services.

Economic Highlights

  • Innovation Hubs: Auckland (finance, ICT, professional services), Wellington (government, ICT, creative industries), and Christchurch (engineering, agritech, R&D).
  • Leading Industries: Agribusiness, renewable energy, tourism, healthcare, software development, and creative industries (e.g., Weta Digital in film production).
  • Education System: Universities like University of Auckland and Victoria University of Wellington produce skilled graduates in technology, science, and business.
  • Global Companies: Xero (fintech), Fonterra (agribusiness), and Fisher & Paykel Healthcare (medtech) showcase New Zealand’s innovation and export capacity.

The workforce is highly educated, English-speaking, and diverse, with strong participation in STEM, finance, healthcare, and creative industries. However, New Zealand faces talent shortages in IT, engineering, and healthcare, making compliance-driven hiring critical for foreign employers.

With Gloroots EOR, companies can access New Zealand’s skilled workforce without entity setup delays, ensuring compliant contracts, payroll, and benefits.

Contact us to hire in New Zealand compliantly with Gloroots.

What is the work culture and talent pool like in New Zealand?

New Zealand’s work culture is shaped by its egalitarian values, collaborative environment, and emphasis on work-life balance. The country consistently ranks among the best for employee well-being, with workplaces promoting flexibility, diversity, and inclusivity.

Work Culture Traits

  • Flat Hierarchies: New Zealand workplaces tend to be non-hierarchical, with open communication and decision-making that values employee input.
  • Work-Life Balance: Employees place high importance on flexible schedules, family time, and outdoor activities. Overtime is less common than in many other countries.
  • Collaboration & Teamwork: A strong sense of community and collaboration is valued, with managers expected to be approachable and supportive.
  • Innovation-Driven: In sectors like ICT, healthcare, and creative industries, employees are encouraged to experiment and innovate.

Talent Strengths

New Zealand’s workforce is strong in:

  • ICT & Software Development (Auckland, Wellington).
  • Engineering & Agritech (Christchurch, Hamilton).
  • Healthcare & Biotechnology (Auckland, Dunedin).
  • Creative Industries (film, gaming, media — Wellington is a global film hub).
  • Financial & Professional Services (Auckland, Wellington).

Hiring Hubs

  • Auckland – Largest workforce, finance, ICT, professional services.
  • Wellington – Government, ICT, creative industries.
  • Christchurch – Engineering, R&D, agritech.
  • Hamilton & Dunedin – Healthcare, education, and biotech.

Workforce Snapshot: New Zealand

IndicatorDetails
Total Workforce Size~2.9 million
DemographicsMedian age: 38.4 years; ~35% under 35
LanguageEnglish (official business language), Māori (official), New Zealand Sign Language
EducationOver 50% of adults have tertiary qualifications; strong STEM and healthcare focus
Top Talent HubsAuckland, Wellington, Christchurch, Hamilton, Dunedin
Key IndustriesICT, Engineering, Healthcare, Agritech, Finance, Creative Industries

Q: What is the process of setting up an entity in New Zealand?

New Zealand is consistently ranked one of the easiest countries in the world to do business. However, setting up a legal entity still requires local registration, compliance with labor laws, and tax filings before you can hire employees.

The most common structure for foreign companies is a Private Limited Company.

Steps to Set Up an Entity in New Zealand

  1. Choose a Business Structure
    • Options include a Private Limited Company, branch office, or partnership.
    • Private Limited Companies are the most common for foreign investors.
  2. Company Name Reservation
    • Must be registered with the Companies Office.
  3. Director & Shareholder Requirements
    • At least one director must live in New Zealand or Australia.
    • A local registered office address is required.
  4. Company Registration
    • File incorporation documents with the Companies Office, including constitution and director/shareholder details.
  5. IRD Number Registration
    • Register with the Inland Revenue Department (IRD) for corporate income tax.
  6. GST Registration
    • Mandatory if annual turnover exceeds NZD 60,000.
  7. Bank Account Setup
    • Open a corporate bank account in New Zealand.
  8. Employment Compliance
    • Register as an employer with the IRD.
    • Ensure compliance with the Employment Relations Act, Holidays Act, and Health and Safety at Work Act.

Timeline

Setting up a company in New Zealand typically takes 2–4 weeks, depending on approvals and documentation.

For companies looking to hire quickly or test the market, this setup process may be too slow and costly. Partnering with an Employer of Record (EOR) like Gloroots enables hiring in days, not weeks, while ensuring full compliance.

Entity Setup vs. EOR in New Zealand

AspectDirect Entity SetupEmployer of Record (Gloroots)
Time to Hire2–4 weeks (registration, IRD, GST, bank account setup)Within days — employees onboarded via Gloroots’ entity
Upfront CostsLegal fees, incorporation costs, office expensesNo setup costs; transparent [EOR fees](https://www.gloroots.com/blog/employer-of-record-cost)
Compliance BurdenEmployer responsible for contracts, payroll, IRD filings, benefitsGloroots manages [global compliance](https://www.gloroots.com/global-compliance) with NZ law
Tax RegistrationMust register with IRD and file taxes directlyGloroots handles payroll taxes and IRD filings
ScalabilityBest for large, permanent operationsIdeal for pilot hires, niche specialists, or fast market entry

Q: What are the main benefits of using Gloroots as an Employer of Record in New Zealand vs. setting up your own entity?

While setting up a legal entity in New Zealand offers control and permanence, it also brings administrative overhead, legal obligations, and compliance risks. For many companies, especially those testing the market or hiring a small team, working with an Employer of Record (EOR) like Gloroots is a more strategic solution.

Benefits of Using Gloroots EOR in New Zealand

  • Faster Hiring: Onboard employees in days instead of weeks, avoiding delays from company registration and IRD setup.
  • Cost Efficiency: No need for incorporation, office setup, or ongoing corporate governance.
  • Legal Compliance: Employment contracts, payroll, benefits, and terminations structured per the Employment Relations Act, Holidays Act, and other labor laws.
  • Payroll & Tax Simplification: Gloroots handles PAYE deductions, KiwiSaver contributions, and IRD reporting.
  • Immigration Support: Guidance on work visas and permits for foreign employees.
  • Flexibility & Scalability: Hire niche specialists or pilot teams before committing to a local entity.
  • Risk Reduction: Avoid penalties for misclassification, non-compliance, or late filings.

Direct Entity vs. Gloroots EOR in New Zealand

FactorDirect Entity SetupGloroots EOR
Speed of Hiring2–4 weeks (entity registration, IRD setup)Employees onboarded in days
Upfront CostsLegal, accounting, incorporation, office leaseNo setup costs; transparent [EOR fees](https://www.gloroots.com/blog/employer-of-record-cost)
ComplianceEmployer responsible for contracts, payroll, benefits, IRD filingsGloroots ensures [global compliance](https://www.gloroots.com/global-compliance) with NZ laws
Payroll & TaxesMust establish payroll system, deduct PAYE, file with IRDGloroots manages payroll, KiwiSaver, and IRD reporting
ImmigrationEmployer applies for visas directly with Immigration NZGloroots provides immigration support and visa sponsorship guidance
ScalabilityBest for long-term, large-scale operationsIdeal for pilot projects, niche hires, or short-term growth

Q: What are the key employment laws in New Zealand that employers should know?

Employment in New Zealand is governed by the Employment Relations Act 2000, the Holidays Act 2003, and the Health and Safety at Work Act 2015. Employers must ensure contracts, wages, benefits, and workplace practices comply with these laws.

Core Employment Law Provisions in New Zealand

  • Employment Contracts
    • Every employee must have a written employment agreement (individual or collective).
    • Agreements must specify pay, hours, holidays, leave entitlements, and termination procedures.
  • Working Hours
    • No statutory maximum weekly hours, but contracts and collective agreements usually set 40 hours/week.
    • Employees cannot be required to work more than 40 hours unless agreed in writing.
  • Overtime
    • No statutory overtime pay requirement.
    • Overtime rates must be agreed in the employment contract or collective agreement.
  • Minimum Wage (2025)
    • Adult Minimum Wage: NZD 23.15/hour.
    • Starting-Out & Training Wage: 80% of adult minimum wage (NZD 18.52/hour).
  • Annual Leave
    • Employees are entitled to a minimum of 4 weeks of paid annual leave after 12 months of continuous employment.
    • 11 public holidays are recognized, and employees may get an extra day off if required to work.
  • Sick Leave
    • Minimum of 10 days of paid sick leave per year after 6 months of continuous employment.
    • Employees can carry over unused leave up to a cap of 20 days.
  • Maternity & Parental Leave
    • Up to 26 weeks of government-funded parental leave payments.
    • Parents can take up to 52 weeks of job-protected leave (paid + unpaid).
  • Termination & Redundancy
    • Terminations must follow fair and reasonable procedures under the Employment Relations Act.
    • Redundancies require genuine business reasons and consultation with affected staff.
    • No statutory severance, but redundancy compensation may be included in contracts or collective agreements.

Employment Laws: Direct Entity vs. Gloroots EOR in New Zealand

Employment AspectDirect Entity SetupGloroots EOR
Employment ContractsEmployer drafts and ensures compliance with Employment Relations ActGloroots provides compliant, localized contracts
Working HoursEmployer must track and enforce contractual limitsGloroots ensures working hours comply with law and agreements
OvertimeEmployer negotiates and tracks overtime payGloroots administers overtime policies based on contracts
Minimum WageEmployer must update payroll with annual wage adjustmentsGloroots ensures compliance with NZD 23.15/hour wage floor
Annual LeaveEmployer calculates 4 weeks leave accrual & entitlementsGloroots tracks and administers leave balances
Sick LeaveEmployer manages 10 days/year entitlementGloroots integrates sick leave into payroll & compliance
Parental LeaveEmployer coordinates with IRD for government-funded leaveGloroots supports leave administration and compliance
TerminationEmployer must follow fair and reasonable dismissal processGloroots ensures lawful termination procedures are followed

Q: What visas and work permits are required for working in New Zealand?

New Zealand welcomes skilled professionals but has strict immigration rules overseen by Immigration New Zealand (INZ). Employers must ensure foreign employees hold the correct visa and meet eligibility requirements before they start work.

Key Work Visas in New Zealand

  1. Accredited Employer Work Visa (AEWV)
    • The main visa for skilled foreign workers.
    • Requires the employer to be an accredited employer with INZ.
    • Jobs must meet minimum pay thresholds (NZD 31.61/hour in 2025) and skill requirements.
  2. Skilled Migrant Category (Resident Visa)
    • For highly skilled workers who want to live and work permanently in New Zealand.
    • Points-based system, considering age, qualifications, work experience, and job offer.
  3. Specific Purpose Work Visa
    • For employees coming to New Zealand for a specific project, role, or training assignment.
  4. Working Holiday Visa
    • For young people (18–30 or 35, depending on country) who want to travel and work in New Zealand for up to 12 months (23 months for UK and Canadian citizens).
  5. Essential Skills Work Visa (Legacy)
    • Being phased out, replaced by AEWV.
  6. Partnership and Dependent Visas
    • Partners and dependent children of work visa holders may also be eligible for work or study visas.

Employer Obligations for Hiring Foreign Workers

  • Employers must be accredited with INZ to hire on the AEWV.
  • Jobs must meet labor market tests unless exempt (shortage occupations).
  • Employers must cover costs of recruitment compliance, including visa fees if required.
  • Employment agreements must comply with New Zealand law, even for foreign workers.

How Gloroots Helps with Visas in New Zealand

Hiring foreign talent in New Zealand requires navigating accreditation, salary thresholds, and visa applications. Gloroots simplifies this by:

  • Visa Strategy: Advising on the best visa category (AEWV, Skilled Migrant, etc.).
  • Employer Accreditation: Hiring through Gloroots’ accredited status, avoiding lengthy accreditation for your business.
  • Application Support: Preparing and lodging visa applications with INZ.
  • Compliance Guarantee: Ensuring employment contracts meet INZ and labor law requirements.
  • Family Support: Assisting dependents with visa and relocation requirements.
  • Seamless Onboarding: Employees can start work quickly through Gloroots’ local entity while visas are processed.

With Gloroots as your Employer of Record in New Zealand, you can hire international talent faster and compliantly, without the burden of employer accreditation.

Q: What are the risks of misclassification in New Zealand?

In New Zealand, distinguishing between employees and independent contractors is critical. Misclassification occurs when a worker is engaged as a contractor but is treated like an employee — for example, when they have fixed working hours, use company tools, or are economically dependent on one employer.

The Employment Court of New Zealand and the Inland Revenue Department (IRD) assess multiple factors to determine a worker’s true status.

Criteria for Classification

  • Control Test – Employees work under the employer’s direction; contractors determine how and when work is performed.
  • Integration Test – Employees are part of the employer’s business; contractors operate independently.
  • Economic Reality Test – Contractors take on business risk and can profit from their efficiency; employees do not.
  • Provision of Tools – Employees use employer’s resources; contractors provide their own equipment.
  • Payment Structure – Employees receive wages or salary; contractors are paid per task or project.

Penalties for Misclassification

  • Back Payment of Taxes – Employers may be liable for unpaid PAYE (Pay-As-You-Earn) taxes and KiwiSaver contributions.
  • Employment Benefits Liability – Misclassified workers may claim entitlements like annual leave, sick leave, public holiday pay, and redundancy compensation.
  • Fines & Legal Liability – The Employment Relations Authority (ERA) may impose penalties for breaches of employment law.
  • Reputational Risks – Non-compliance can damage employer credibility, particularly in a market like New Zealand where employee protections are strong.

Gloroots ensures workers are correctly classified by providing legally compliant employment contracts through its Employer of Record (EOR) model, reducing the risk of costly disputes.

Misclassification Risks: Direct Entity vs. Gloroots EOR in New Zealand

AspectDirect Entity SetupGloroots EOR
Classification ResponsibilityEmployer must determine correct status under NZ lawGloroots ensures proper classification and compliant hiring
Risk of MisclassificationHigh — especially for foreign companies unfamiliar with NZ rulesLow — Gloroots manages compliance and contracts
Financial LiabilityEmployer liable for back taxes, KiwiSaver, and benefitsGloroots eliminates liability by structuring lawful employment
Administrative BurdenEmployer must manage disputes and audits with ERA/IRDGloroots handles compliance and reduces employer risk

Use our Misclassification Risk Calculator to assess your risk in New Zealand.

Q: How does an EOR help you run payroll in New Zealand?

Payroll in New Zealand is governed by the Inland Revenue Department (IRD) and requires accurate processing of wages, tax deductions, and benefit contributions. Employers must also comply with obligations under the Employment Relations Act and the KiwiSaver Act.

Payroll Compliance Requirements in New Zealand

  • Pay Frequency
    • Most employees are paid weekly, fortnightly, or monthly, as agreed in their employment contract.
  • Tax Withholding (PAYE)
    • Employers must deduct PAYE (Pay-As-You-Earn) from employee wages and remit it to IRD.
    • PAYE includes income tax and ACC levies (Accident Compensation Corporation).
  • KiwiSaver Contributions
    • Mandatory retirement savings scheme for eligible employees.
    • Employee contribution: 3%, 4%, 6%, 8%, or 10% of gross salary (employee chooses).
    • Employer contribution: minimum 3% of gross salary.
  • Other Employer Obligations
    • Holiday Pay: Employees accrue at least 4 weeks of paid annual leave.
    • Sick Leave: At least 10 days of paid sick leave per year after 6 months of employment.
    • Public Holidays: 11 public holidays annually, paid if employee would normally work that day.
  • Payroll Reporting
    • Employers must submit PAYE reports to IRD on payday (known as payday filing).
    • End-of-year reconciliation is required.

How Gloroots Simplifies Payroll in New Zealand

Gloroots manages payroll end-to-end, ensuring:

  • Accurate PAYE deductions and timely IRD filings.
  • KiwiSaver compliance, including correct employer and employee contributions.
  • Automated leave tracking for annual leave, sick leave, and public holidays.
  • Localized payslips issued in line with New Zealand requirements.
  • ACC levies and tax reporting integrated into payroll processing.

With Gloroots’ payroll management, companies eliminate the risk of errors or penalties while offering employees a seamless experience.

Payroll Compliance: Direct Entity vs. Gloroots EOR in New Zealand

Payroll AspectDirect Entity SetupGloroots EOR
Payroll SetupEmployer registers with IRD and establishes payroll systemsGloroots manages payroll through its local entity
Tax Withholding (PAYE)Employer calculates, deducts, and remits PAYE to IRDGloroots ensures correct PAYE deductions and filings
KiwiSaver ContributionsEmployer calculates and contributes 3% minimumGloroots administers KiwiSaver contributions seamlessly
Holiday & Sick LeaveEmployer tracks accruals and manages leave balancesGloroots integrates leave tracking into payroll system
ReportingEmployer files payday reporting and year-end reconciliationGloroots handles all IRD reporting obligations
Compliance RiskHigh — errors can lead to penalties or back paymentsLow — Gloroots guarantees compliance

Q: How does tax compliance work in New Zealand?

Tax compliance in New Zealand is overseen by the Inland Revenue Department (IRD). Employers are responsible for correctly withholding taxes from employee wages, contributing to KiwiSaver, and reporting via the PAYE (Pay-As-You-Earn) system.

Income Tax Rates in New Zealand (2025)

Annual Income (NZD)Tax Rate
Up to 14,00010.5%
14,001 – 48,00017.5%
48,001 – 70,00030%
70,001 – 180,00033%
Over 180,00039%

Employee Contributions

  • PAYE (Income Tax + ACC Levy): Deducted from wages each payday.
  • KiwiSaver: Employee chooses contribution rate (3%, 4%, 6%, 8%, or 10% of salary).

Employer Contributions

  • KiwiSaver: Minimum 3% of gross salary for enrolled employees.
  • ACC Levies: Employers pay additional levies for workplace accident coverage, based on industry risk classification.

Reporting Requirements

  • Payday Filing: Employers must report PAYE information to IRD on each payday.
  • End-of-Year Tax Returns: IRD issues pre-filled tax summaries for employees; employers may need to provide reconciliations.

Tax Compliance: Direct Entity vs. Gloroots EOR in New Zealand

Tax AspectDirect Entity SetupGloroots EOR
Income Tax (PAYE)Employer calculates, deducts, and files with IRDGloroots manages PAYE deductions and filings automatically
Employee KiwiSaver ContributionsEmployer must deduct chosen contribution rate from salaryGloroots ensures correct deductions and reporting
Employer KiwiSaver ContributionsEmployer contributes 3% minimum of gross salaryGloroots administers KiwiSaver contributions compliantly
ACC LeviesEmployer pays industry-specific workplace leviesGloroots calculates and pays ACC levies
Payday FilingEmployer must submit filings each payday to IRDGloroots handles payday filing seamlessly
Compliance RiskErrors may result in fines, back payments, or auditsGloroots ensures compliance and reduces employer risk

Q: What benefits and entitlements do employees in New Zealand receive?

Employees in New Zealand enjoy comprehensive statutory benefits under the Holidays Act 2003, Employment Relations Act 2000, and KiwiSaver Act 2006. While statutory benefits provide a strong foundation, many employers enhance packages with additional perks to attract and retain talent.

Statutory Benefits in New Zealand

  • Annual Leave
    • Minimum 4 weeks of paid annual leave after 12 months of continuous employment.
    • Employees also receive 11 public holidays each year (paid if it falls on a normal working day).
  • Sick Leave
    • Employees are entitled to 10 days of paid sick leave per year after 6 months of continuous service.
    • Unused leave can accumulate up to a maximum of 20 days.
  • Parental Leave
    • Up to 52 weeks of job-protected leave (26 weeks government-funded parental leave payments + 26 weeks unpaid).
    • Can be shared between parents.
  • KiwiSaver
    • A voluntary retirement savings scheme.
    • Employees choose contribution rates of 3%, 4%, 6%, 8%, or 10%.
    • Employers must contribute a minimum of 3% to employees enrolled in KiwiSaver.
  • ACC (Accident Compensation Corporation)
    • Covers employees for work-related and non-work-related injuries.
    • Funded by employer and employee levies.
  • Bereavement Leave
    • 3 days of paid leave for the death of a close family member.
    • 1 day for other bereavements.

Common Non-Statutory Benefits (Market Practices)

  • Private health insurance.
  • Wellness programs and gym memberships.
  • Flexible/remote work arrangements.
  • Professional development & training allowances.
  • Stock options or performance bonuses.

Gloroots ensures your employees in New Zealand receive all mandatory benefits, while helping you design additional perks aligned with global employee benefits best practices.

Employee Benefits: Direct Entity vs. Gloroots EOR in New Zealand

BenefitDirect Entity SetupGloroots EOR
Annual LeaveEmployer calculates 4 weeks leave entitlement + 11 public holidaysGloroots tracks and administers leave compliantly
Sick LeaveEmployer grants 10 days/year and manages accrual up to 20 daysGloroots integrates sick leave tracking into payroll
Parental LeaveEmployer coordinates with government for parental leave paymentsGloroots manages applications and compliance with parental leave laws
KiwiSaverEmployer deducts employee contributions and pays 3% employer shareGloroots administers KiwiSaver contributions seamlessly
ACC CoverageEmployer pays levies based on industry classificationGloroots calculates and pays ACC levies
Bereavement LeaveEmployer ensures correct leave days providedGloroots administers bereavement leave under Holidays Act
Additional BenefitsEmployer designs and administers perks (healthcare, training, bonuses)Gloroots helps structure competitive, localized benefit packages

Q: What’s involved in hiring and onboarding employees in New Zealand?

Hiring in New Zealand requires compliance with the Employment Relations Act, Holidays Act, and Health and Safety at Work Act. Employers must ensure contracts are lawful, payroll is correctly set up, and benefits are administered properly before employees start work.

Steps in Hiring & Onboarding Employees in New Zealand

  1. Job Advertising & Recruitment
    • Employers must comply with anti-discrimination laws and ensure fair hiring practices.
    • Job boards such as Seek, Trade Me Jobs, and LinkedIn are commonly used.
  2. Employment Agreements
    • Written employment agreements are mandatory.
    • Agreements must include job description, hours of work, pay, leave entitlements, and termination procedures.
  3. Pre-Employment Checks
    • Background checks are permitted but must respect privacy laws.
    • Certain roles (e.g., healthcare, childcare, financial services) may require additional checks.
  4. IRD & Payroll Setup
    • Employers must register the employee with the Inland Revenue Department (IRD) for tax purposes.
    • PAYE tax and KiwiSaver contributions must be set up.
  5. Health & Safety Induction
    • Employers are required to provide workplace health and safety training under the Health and Safety at Work Act.
  6. Onboarding & Orientation
    • Employees should be introduced to company culture, workplace policies, and benefits.
    • Probationary periods (commonly 3–6 months) must still comply with minimum notice and fair dismissal laws.

Challenges for Foreign Employers

  • Drafting legally compliant contracts.
  • Managing PAYE registration, KiwiSaver, and ACC levies.
  • Adhering to strict health & safety obligations.
  • Avoiding delays in onboarding due to tax or visa processing.

By partnering with Gloroots EOR, companies can onboard employees quickly and compliantly, while Gloroots manages contracts, payroll, KiwiSaver, and benefits.

Hiring & Onboarding: Direct Entity vs. Gloroots EOR in New Zealand

Hiring AspectDirect Entity SetupGloroots EOR
Employment AgreementsEmployer drafts contracts under NZ lawGloroots provides compliant, localized contracts
IRD RegistrationEmployer must register employee with IRDGloroots manages IRD registration and PAYE setup
Payroll SetupEmployer sets up payroll system with PAYE, KiwiSaver, and ACCGloroots runs compliant payroll from day one
Health & Safety InductionEmployer provides workplace H&S trainingGloroots ensures statutory H&S onboarding is met
Probation ManagementEmployer manages probation periods and noticesGloroots structures probation policies within NZ law
Time to HireSeveral weeks (entity setup, IRD, compliance)Within days via Gloroots’ entity

Q: How do you successfully manage a workforce in New Zealand?

Managing employees in New Zealand requires balancing legal compliance with a people-first culture. Employees expect fairness, transparency, and work-life balance, while labor laws mandate strong protections around pay, leave, and health and safety.

Best Practices for Workforce Management in New Zealand

  1. Embrace Flat Hierarchies
    • Kiwi workplaces are typically collaborative and non-hierarchical.
    • Managers are expected to be approachable, inclusive, and supportive rather than authoritative.
  2. Work-Life Balance
    • Employees value flexible hours, remote work, and time for family and leisure.
    • Employers that support work-life balance gain a competitive advantage in talent retention.
  3. Compliance with Employment Laws
    • Adherence to the Employment Relations Act and Holidays Act is critical.
    • Employers must ensure contracts, leave entitlements, and pay rates are lawful.
  4. Health & Safety Culture
    • The Health and Safety at Work Act places responsibility on employers to maintain safe workplaces.
    • Regular training, risk assessments, and employee engagement in safety are expected.
  5. Union & Employee Relations
    • Unions are influential in certain industries (e.g., transport, healthcare, construction).
    • Employers should maintain open communication and respect collective agreements.
  6. Learning & Development
    • Professional development and upskilling are valued, especially in IT, engineering, and healthcare.
    • Employers that invest in continuous learning tend to attract and retain top talent.

How Gloroots Supports Workforce Management

Gloroots helps companies manage their New Zealand workforce by:

  • Ensuring compliant payroll, KiwiSaver, and tax filings.
  • Administering statutory leave and benefits.
  • Supporting visa and work permit renewals for foreign staff.
  • Advising on probation, termination, and redundancy compliance.
  • Offering cultural onboarding to help international hires integrate effectively.

With Gloroots as your EOR in New Zealand, you can focus on growth while we handle the complexity of workforce management.

Q: What are the key steps and requirements in terminating employees in New Zealand?

Termination in New Zealand is tightly regulated under the Employment Relations Act 2000. Employers must ensure dismissals are fair, reasonable, and procedurally correct. Failure to comply can result in legal disputes and claims of unjustified dismissal.

Termination Process in New Zealand

  1. Grounds for Termination
    • Valid grounds include redundancy, poor performance, serious misconduct, or mutual agreement.
    • Employers must follow a fair process, including consultation, performance reviews, and documentation.
  2. Notice Periods
    • Determined by the employment agreement.
    • If not specified, “reasonable notice” applies, usually 2–4 weeks depending on the role and industry.
  3. Probationary Periods
    • Commonly 3–6 months.
    • Employees on probation still have protection from unfair dismissal — the employer must demonstrate fair cause and process.
  4. Severance Pay
    • Not required by law, but may be included in contracts or collective agreements.
    • Redundancy compensation is common practice in certain sectors.
  5. Special Protections
    • Employees cannot be dismissed for discriminatory reasons, while on parental leave, or for union activity.
    • Redundancy requires genuine business justification and prior consultation.

Q: What is the offboarding process in New Zealand?

Employers must complete several steps to offboard an employee compliantly:

  1. Final Payroll Settlement
    • Includes outstanding salary, holiday pay, and any contractual entitlements.
  2. KiwiSaver & Tax Filings
    • Final contributions to KiwiSaver must be made.
    • PAYE must be reported to IRD through payday filing.
  3. Return of Company Property
    • Employers must recover laptops, phones, access cards, and sensitive data.
  4. Employment Records
    • Employers must keep employee records for at least 6 years.
  5. Exit Documentation
    • Employees are entitled to a certificate of employment confirming role and tenure.

Termination & Offboarding: Direct Entity vs. Gloroots EOR in New Zealand

AspectDirect Entity SetupGloroots EOR
Grounds for TerminationEmployer must prove fair cause and processGloroots ensures dismissals are legally compliant
Notice PeriodEmployer must apply contractual or reasonable noticeGloroots applies correct notice terms per contract
Probationary PeriodsEmployer must manage fair process even during probationGloroots structures probation policies in compliance
Severance PayEmployer negotiates redundancy pay if requiredGloroots manages redundancy compliance and settlements
Final PayrollEmployer calculates outstanding wages, leave, KiwiSaverGloroots ensures accurate payroll and KiwiSaver closure
Exit DocumentationEmployer must issue certificate of employment and keep recordsGloroots handles exit paperwork and recordkeeping

Q: What costs and financial planning do you need with an Employer of Record in New Zealand?

Hiring in New Zealand requires employers to budget for base salaries, KiwiSaver contributions, holiday entitlements, sick leave, and ACC levies. For foreign companies, costs can be higher due to compliance overheads and administrative setup when managing payroll, tax, and benefits independently.

With Gloroots EOR, you gain cost predictability. Instead of managing complex payroll and compliance directly, you pay a transparent monthly EOR fee plus employee compensation — allowing you to forecast expenses accurately and scale your workforce with confidence.

Typical Employer Costs in New Zealand

  • Base Salary: Competitive wages depending on industry (higher in ICT, engineering, and healthcare).
  • KiwiSaver Contributions: Minimum 3% employer contribution of gross salary.
  • PAYE & ACC Levies: PAYE withheld from wages and employer-paid ACC levies based on industry risk.
  • Annual Leave: At least 4 weeks’ paid annual leave plus 11 public holidays.
  • Sick Leave: Minimum of 10 paid sick days per year.
  • Redundancy/Severance: Not statutory, but common in contracts or collective agreements.
  • Entity Setup (Direct Employers only): Incorporation costs, local directors, payroll systems, accounting, and compliance teams.

Benefits of Using Gloroots EOR

  • No upfront incorporation costs — hire without establishing a legal entity.
  • Transparent EOR fees — salary + agreed service fee, no hidden expenses.
  • Accurate payroll management — PAYE, KiwiSaver, and leave fully administered.
  • Compliance risk reduction — avoid penalties for incorrect filings or misclassification.
  • Scalable hiring — cost-effective for small teams, project-based hiring, or rapid expansion.

Direct Entity vs. Gloroots EOR: Cost & Financial Planning in New Zealand

Cost AspectDirect Entity SetupGloroots EOR
Entity Setup CostsCompany registration, local director fees, legal & accounting costsNo setup costs; use Gloroots’ existing entity
KiwiSaverEmployer contributes minimum 3% of gross salaryGloroots administers KiwiSaver contributions
PAYE & ACC LeviesEmployer calculates and remits to IRDGloroots manages PAYE withholding and ACC levy payments
Annual Leave & Sick LeaveEmployer tracks and accrues leave balancesGloroots administers leave entitlements through payroll
Severance/RedundancyEmployer negotiates payments if applicableGloroots manages redundancy compliance and settlements
Payroll & ComplianceEmployer must set up payroll systems and ensure IRD complianceGloroots provides full [payroll management](https://www.gloroots.com/blog/payroll-management)
ScalabilityBest suited for large, long-term operationsFlexible — hire small teams or scale quickly

Q: What challenges might you face, and how do you solve them using EOR in New Zealand?

New Zealand offers a highly skilled, English-speaking workforce, but foreign employers must navigate strict labor laws, complex payroll obligations, and immigration requirements. Without local expertise, compliance risks and administrative burdens can delay hiring and increase costs.

Key Hiring Challenges in New Zealand

  1. Complex Employment Laws
    • Employers must comply with the Employment Relations Act, Holidays Act, and Health and Safety at Work Act.
    • Contracts, leave entitlements, and payroll must align with statutory rules.
  2. Payroll & Tax Complexity
    • Employers must calculate PAYE, KiwiSaver, ACC levies, and report to IRD each payday.
    • Mistakes can result in penalties or back payments.
  3. Entity Setup Delays
    • Setting up a company requires local directors, registration with IRD, and payroll systems.
    • This can take weeks before a single hire is onboarded.
  4. Immigration Restrictions
    • Employers must meet strict criteria to sponsor foreign workers (e.g., Accredited Employer Work Visa).
    • Compliance with salary thresholds and accreditation is required.
  5. Talent Shortages in Certain Sectors
    • High demand for ICT, engineering, and healthcare professionals makes talent acquisition competitive.
    • Employers must offer strong benefits and flexible arrangements.

How Gloroots EOR Solves These Challenges

  • Compliance Assurance: Gloroots ensures contracts, leave, and benefits meet New Zealand’s labor laws.
  • Payroll Management: Full payroll compliance, including PAYE, KiwiSaver, and ACC levies.
  • Faster Hiring: Onboard employees in days without entity setup delays.
  • Immigration Support: Guidance on AEWV and other visas, removing accreditation burdens.
  • Competitive Benefits: Access to global employee benefits tailored to attract top New Zealand talent.
  • Scalability: Hire small teams or scale quickly without large upfront investments.

Hiring Challenges: Direct Entity vs. Gloroots EOR in New Zealand

ChallengeDirect Entity SetupGloroots EOR
Employment Law ComplianceHigh risk — employer must manage contracts, leave, H&S obligationsGloroots ensures compliance with NZ labor laws
Payroll & Tax FilingEmployer must handle PAYE, KiwiSaver, ACC, IRD filingsGloroots manages payroll and reporting seamlessly
Entity Setup2–4 weeks to incorporate, register with IRD, and set up payrollNo entity setup — hire in days
ImmigrationEmployer must gain accreditation to sponsor visasGloroots handles visa support through local entity
Talent AcquisitionEmployer designs benefits independentlyGloroots provides competitive, compliant benefits packages
Compliance RiskHigh — penalties for errors or late filingsLow — Gloroots mitigates risks through compliance management

Conclusion

New Zealand offers a skilled, English-speaking workforce, a transparent legal system, and strong sectors in ICT, healthcare, agritech, and creative industries. However, employers must navigate complex labor laws, payroll compliance, and immigration requirements.

For companies without a local entity, setting up in New Zealand can be slow, costly, and administratively burdensome. With Gloroots as your Employer of Record (EOR), you can:

  • Hire employees in days instead of weeks.
  • Stay compliant with IRD, KiwiSaver, and labor laws.
  • Offer competitive employee benefits.
  • Avoid entity setup costs and ongoing compliance risks.
  • Focus on scaling your business while Gloroots handles compliance and payroll.

Gloroots makes global hiring in New Zealand simple, compliant, and cost-efficient.

Contact us to explore how Gloroots can help you hire in New Zealand compliantly.

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