An Employer of Record (EOR) is a third-party organization that takes on the legal and administrative responsibilities of employing workers on behalf of another company. In New Zealand, an EOR handles payroll, benefits, taxes, and compliance with local labor laws, allowing businesses to hire and manage employees without establishing their own legal entity.
Hiring workers from New Zealand can be highly beneficial for international companies. New Zealand is known for its highly educated and skilled workforce, particularly in agriculture, technology, and creative industries. The country has a population of approximately 5.1 million people, with a significant portion being skilled professionals in various sectors. New Zealand’s workforce is renowned for its innovation, productivity, and strong work ethic. According to the Organization for Economic Co-operation and Development (OECD), New Zealand workers are among the most productive in the world. The country’s strong educational system and focus on work-life balance make it an attractive destination for companies looking to hire talent in the Asia-Pacific region.
To effectively use an Employer of Record in New Zealand, follow these 6 steps:
- Find talent to hire in New Zealand
- Compare using an EOR to setting up a legal entity in New Zealand
- Get the information needed from your talent
- Choose an EOR provider with expertise in New Zealand
- Communicate your hiring needs to the EOR
- Have the EOR set up the contracts and hiring procedure
An EOR in New Zealand manages payroll processing, ensures compliance with tax regulations, and administers statutory benefits such as social security contributions and leave entitlements. They also handle the complexities of New Zealand labor laws, including working hours, overtime pay, and termination procedures.
When hiring remotely in New Zealand, it’s crucial to consider various labor laws. The country has protective employment regulations, including rules on employment contracts, working hours, and paid time off. New Zealand mandates a maximum 40-hour standard work week, with specific regulations for overtime and rest periods.
The hiring process in New Zealand typically involves identifying suitable candidates, conducting interviews, and ensuring compliance with local employment laws. While written employment contracts are not strictly required by New Zealand law, it’s best practice to provide them. The EOR facilitates this process, ensuring all legal requirements are met and managing the onboarding of new employees.
1. Find talent to hire in New Zealand
To find talent to hire in New Zealand, businesses should explore a variety of channels, emphasizing both local and global platforms to maximize reach. LinkedIn remains an essential tool for talent acquisition in New Zealand, especially for professional and managerial roles.
Job posting websites like Seek, TradeMe Jobs, and Indeed New Zealand are popular local job portals. These platforms offer avenues for employers to advertise openings and are widely used by New Zealand job seekers. Employers can post their candidate requirements on these portals, allowing applicants to access them remotely.
Specialized recruitment agencies can provide tailored solutions for industries requiring specific expertise, particularly in technology, agriculture, and creative fields. These agencies manage the complexities of sourcing and vetting candidates, significantly easing the hiring process for companies.
Local job boards and regional networks can be advantageous for businesses hiring within specific industries or for particular roles. New Zealand’s diverse economy offers a wide range of talent across various sectors, with major cities like Auckland and Wellington particularly notable for their talent pools.
It’s important to note that in New Zealand, the hiring process often begins with drafting a detailed job description, followed by screening, shortlisting, interviews, and selection. Some roles may require candidates to provide additional documentation, such as educational certificates and professional qualifications.
2. Compare using an EOR to setting up a legal entity in New Zealand
When working with employees in New Zealand, you need to consider working with an EOR versus setting up your own legal entity. Here’s a comparison of the two options:
| More complex, and requires in-depth knowledge of NZ corporate law | Employer of Record | Setting Up Legal Entity in New Zealand | Shared Attributes |
|---|---|---|---|
| Setup Time | Quick, often within days or weeks | Can take several months | Both require compliance with NZ regulations |
| Initial Cost | Lower upfront costs, typically just service fees | Higher – includes incorporation fees, capital requirements, legal costs | Both require some initial investment |
| Ongoing Cost | Monthly service fees per employee, may become costlier with more employees | Fixed costs for entity maintenance, more cost-effective for larger teams | Both have ongoing operational costs |
| Complexity | Simpler, EOR handles most administrative tasks | Both require an understanding of NZ labor laws | The company is responsible for all compliance matters |
| Control over Operations | Limited control, EOR is the legal employer | Full control over all aspects of employment and operations | Both allow management of day-to-day work activities |
| Compliance Management | Handled by EOR – payroll, taxes, benefits administration | Higher, the company bears all legal and financial risks | Both must adhere to NZ labor regulations |
| Scalability | Highly flexible, easy to add or remove employees | Less flexible, changes may require legal procedures | Both can support business growth |
| Local Expertise Required | Minimal, provided by EOR | Extensive – need for local legal, tax, and HR advisors | Both benefit from local market knowledge |
| Suitable for | Market entry, testing NZ market, hiring <10 employees | Long-term presence, hiring >10 employees, full operations | Both support business operations in NZ |
| Risk | Lower, EOR assumes most employer liabilities | The company must create and manage agreements | Both involve some level of business risk |
| Customization of Employment Terms | Limited flexibility, must use EOR’s templates | Full flexibility to tailor employment policies | Both must comply with NZ labor standards |
| Handling of Employment Agreements | Managed by EOR using compliant templates | Managed by EOR, it may require additional agreements | Both must provide written employment agreements |
| Termination Process | Managed by EOR following NZ regulations | Company must handle directly, following NZ law | Both must follow NZ termination regulations |
| Intellectual Property Protection | Managed by EOR, may require additional agreements | Directly controlled by the company | Both must protect company IP rights |
An Employer of Record offers a quicker, less complex route to hiring local staff, bypassing the need for a formal company presence. This approach suits companies looking to test the New Zealand market or expand quickly without significant upfront investment.
On the other hand, setting up a legal entity in New Zealand offers greater control and the ability to customize business operations and policies. However, establishing a legal entity involves complex registration processes, significant upfront fees, and a deeper understanding of local laws and tax regulations.
In comparison, using an EOR is generally less expensive. It involves less risk, making it a suitable option for small to medium-sized businesses or those in the initial stages of market exploration. It eliminates the need for a local expert or dedicated legal and tax teams, as the EOR handles these aspects.
3. Get the information needed from your talent
You’ll need to collect essential personal and employment details to hire employees in New Zealand. This typically includes:
- Employee’s full name
- New Zealand IRD (Inland Revenue Department) number
- Date of birth
- Address
- Contact information
- Educational qualifications (certified copies may be required)
- Professional certifications (if applicable)
- Bank account details for salary payments
- Comprehensive job description, including title, duties, and place of work
While employment contracts in New Zealand are not legally required to be in writing, it’s best practice to provide them. These contracts should detail the terms of employment, such as:
- Job title and description
- Start date
- Salary and payment terms
- Working hours and days
- Vacation entitlement
- The notice period for termination
- Any probationary period (if applicable)
- Benefits and bonuses (if applicable)
It’s important to note that in New Zealand, employers are required to keep wage and time records, holiday and leave records, and signed copies of employment agreements for all employees for at least seven years, even if the employee has left the company.
4. Choose an EOR provider with expertise in New Zealand
When choosing an EOR provider to work with in New Zealand, selecting one with deep expertise in the New Zealand market and a strong understanding of local labor laws to ensure compliance and smooth business operations is crucial.
Evaluate the provider’s experience managing employee onboarding, payroll, and legal compliance in New Zealand. Look for a provider with a proven track record of working successfully with companies similar to yours, and check their reputation through client case studies or reviews.
Assess the range of services offered to see if they align with your needs, such as work permit support, employee benefits management, and payroll processing. It is important to choose a provider that offers comprehensive employment services and is flexible enough to adapt to changes in New Zealand labor laws.
Consider the provider’s technology and platforms, ensuring they offer secure, user-friendly systems with strong data protection measures. This is particularly important in New Zealand, where data protection is governed by the Privacy Act 2020.
Evaluate their pricing models, looking for transparency in fees, whether they charge a fixed monthly fee or a percentage of the employee’s salary, and assess the cost-effectiveness for your business.
Finally, choose an EOR provider that demonstrates a commitment to staying up-to-date with New Zealand employment laws and can provide proper guidance and support to ensure your business remains compliant while operating in New Zealand.
What are the best EOR providers to use in New Zealand?
| EOR Provider | Why Selected |
|---|---|
| Remote | Known for user-friendly platform and competitive pricing for New Zealand market |
| Deel | Offers comprehensive global hiring solutions with strong presence in New Zealand |
| Multiplier | Provides tailored EOR services with expertise in New Zealand labor laws and regulations |
| Oyster HR | Offers robust compliance support and localized benefits packages for New Zealand employees |
5. Communicate your hiring needs to the EOR
It is important to communicate your hiring needs to the EOR to ensure the process aligns with company goals and legal requirements. Provide a detailed job description, including title, responsibilities, required qualifications, and skills.
Specify the job’s expected start date, location, and whether it’s remote or onsite. Outline the proposed salary, bonuses, commission structures, and other compensation benefits. Clarify the contract length and detail the working hours, including flexibility or shift requirements.
Discuss the company culture, growth plans, and how the position fits into future expansion. Specify equipment needs and onboarding procedures. By accurately representing these aspects, the EOR can find the right talent and ensure legal and administrative compliance.
Additionally, communicate any specific requirements related to New Zealand labor laws, such as the need for KiwiSaver contributions or any industry-specific regulations that may apply to your business. It’s also important to discuss any specific benefits you want to offer, as the EOR can help you design a competitive package that complies with local norms and regulations.
Be sure to mention any language requirements. Both English and Māori are official languages in New Zealand, although English is predominantly used in business settings.
6. Have the EOR set up the contracts and hiring procedure
Once you have chosen which provider to work with and communicated your hiring needs, the EOR will set up the contracts and hiring procedure, ensuring compliance with local labor laws and employment practices.
The EOR will draft employment contracts that comply with New Zealand labor laws, including specific terms regarding job details, working hours, and termination procedures. They’ll also manage the necessary documentation for tax setup, KiwiSaver enrollment, and payroll, adhering to mandatory withholdings and reporting requirements.
The EOR also registers employment with relevant New Zealand authorities, such as the Inland Revenue Department (IRD), to ensure the company is properly licensed and authorized to operate and hire employees in New Zealand.
They’ll ensure your company complies with local regulations related to working hours, minimum wage, and leave entitlements. Additionally, the EOR administers benefits and handles formal onboarding, including the introduction to company systems and culture.
The EOR will also ensure that all necessary paperwork is completed, including registering the employee for tax purposes and KiwiSaver, if applicable. They will handle setting up payroll systems to ensure timely and accurate payment of salaries and statutory contributions.
What help does an EOR provide in New Zealand’s payroll, taxes, and benefits administration?
The EOR will support all New Zealand’s payroll, taxes, and benefits administration, ensuring compliance with complex local laws. It calculates and processes employee salaries, withholds the correct tax amounts, and handles KiwiSaver contributions.
The EOR manages payslips that reflect mandatory withholdings and contributions, adhering to New Zealand regulations. This includes managing the Pay As You Earn (PAYE) system for income tax and ACC (Accident Compensation Corporation) levies.
For benefits, the EOR ensures compliance with statutory requirements, such as annual, sick, and parental leave. It can also administer additional benefits common in New Zealand, such as health insurance and additional superannuation contributions.
Specific tasks include:
- Calculating and processing salaries in New Zealand Dollars (NZD)
- Managing KiwiSaver contributions for eligible employees
- Handling ACC levy calculations and payments
- Ensuring compliance with the Holidays Act 2003 for leave entitlements
- Administering any applicable allowances or bonuses
- Managing annual leave entitlements and other statutory leave types
- Handling year-end tax reconciliations and providing employees with necessary tax documents
What labor laws do you need to consider when hiring in New Zealand?
When hiring in New Zealand, several key labor laws must be considered. New Zealand’s approach to labor laws generally protects employees, offering extensive employee protections while maintaining a business-friendly environment.
Employment contracts
While not legally required to be in writing, it’s best practice to provide written employment contracts in New Zealand. These should specify job details, including position, duties, working hours, salary, and termination conditions.
Working hours and paid holidays
The standard work week in New Zealand is up to 40 hours, typically spread over 5 days. After 12 months of continuous employment, employees are entitled to a minimum of 4 weeks of paid annual leave plus 11 public holidays.
Taxes
New Zealand operates a Pay As You Earn (PAYE) system for income tax. Employers are responsible for deducting income tax and ACC levies from employees’ salaries.
KiwiSaver
KiwiSaver is a voluntary work-based savings scheme. If an employee opts in, employers must contribute at least 3% of the employee’s gross salary.
Parental leave
Eligible employees are entitled to 26 weeks of government-funded parental leave. This can be shared between parents, and employers must keep the employee’s position open for their return.
| Labor Law | Key Points |
|---|---|
| Employment Contracts | Not legally required to be written, but recommended |
| Working Hours | Standard 40-hour week, overtime by agreement |
| Paid Holidays | Minimum 4 weeks annual leave, plus 11 public holidays |
| Taxes | PAYE system, employers responsible for deductions |
| KiwiSaver | Voluntary scheme, 3% minimum employer contribution if employee opts in |
| Parental Leave | PAYE system, employers are responsible for deductions |
How does the hiring process work in New Zealand?
When hiring staff in New Zealand, employers typically follow these steps:
- Identify the vacancy and create a detailed job description
- Advertise the position through various channels, including local job portals and recruitment agencies
- Review applications and shortlist candidates
- Conduct interviews and assessments, which may include skill tests or presentations for some roles
- Select the preferred candidate and make a job offer
- Negotiate and finalize the employment terms
- Prepare and sign the employment contract (if using written contracts)
- Register the employee with relevant authorities (e.g., IRD for tax purposes)
- Conduct any required pre-employment checks
- Onboard the new employee
Employers must ensure compliance with New Zealand’s labor laws and regulations throughout this process, including anti-discrimination legislation and data privacy requirements. It’s also important to be aware of cultural nuances in the New Zealand hiring process, such as the importance of work-life balance and the value placed on practical experience alongside formal qualifications.
Employers should also be prepared to discuss benefits beyond the statutory requirements, as New Zealand employees often expect additional perks such as flexible working arrangements, health insurance, and professional development opportunities.
Is New Zealand a relatively easy country to hire employees remotely through an EOR?
Yes, New Zealand is generally considered a relatively easy country to hire employees remotely through an Employer of Record. The country’s well-developed legal framework, business-friendly environment, and highly skilled workforce make it an attractive destination for international hiring.
Pros
Cons
New Zealand’s labor laws, while protecting employees, are clear and well-established, making compliance manageable with the help of an experienced EOR. The country’s robust digital infrastructure facilitates remote work arrangements, especially in urban areas.
However, while hiring through an EOR in New Zealand is relatively straightforward, employers still need to be mindful of local labor laws and cultural nuances. An experienced EOR can navigate these requirements effectively, ensuring compliance while simplifying the hiring process for foreign companies.
The New Zealand government has been actively promoting the country as a hub for innovation and international business, which has led to an environment conducive to remote work and global collaboration. This further enhances New Zealand’s attractiveness for remote hiring arrangements.
In conclusion, New Zealand’s combination of a highly skilled workforce, favorable business environment, and established legal framework makes it a viable option for companies hiring remote employees through an EOR. The country’s ongoing efforts to attract global talent and businesses and its strategic location in the Asia-Pacific region and world-class infrastructure position it as an increasingly popular destination for international employment. By partnering with a knowledgeable and experienced EOR provider, companies can effectively navigate New Zealand’s employment landscape and tap into its diverse talent pool, particularly in technology, agriculture, and creative industries.
