---
title: "New Zealand Employer Cost Breakdown 2026 | KiwiSaver, Leave"
description: "New Zealand employer KiwiSaver rises to 3.5% from 1 April 2026. No broad payroll tax, plus 4 weeks paid leave. The full cost of a 2026 hire."
canonical: https://www.teamed.global/country-hiring-guides/new-zealand/cost-breakdown
---

New Zealand · Cost breakdown child

Served by Teamed vetted partner-entity network in New Zealand

# How much does it really cost to *hire in New Zealand* in 2026?

From 1 April 2026 the minimum KiwiSaver employer contribution rises to 3.5%, up from 3%. KiwiSaver is the only recurring statutory add-on on top of gross pay. There's no broad payroll tax and no social security charge, so a New Zealand hire costs far less above salary than most developed markets once leave and ACC levies are in the model.

Last reviewed 13 June 2026 · New Zealand guide

![Auckland waterfront and the Sky Tower at golden hour, harbour ferries crossing calm water under a warm sky, viewed from a city office window.](/images/country-guides/new-zealand-cost-breakdown.webp)

Illustration · Auckland, New Zealand

Answer.cite this

Hiring in New Zealand adds little on top of gross pay. KiwiSaver is the key number. The minimum employer contribution rises to 3.5% from 1 April 2026. It was 3% before that. There's no broad payroll tax and no general social security charge.

Two more lines sit alongside KiwiSaver. ACC work levies fund accident cover and vary by job type. PAYE is income tax the employer deducts from the worker's pay, so it isn't an employer cost. Together the recurring statutory add-ons usually run well under 10 percent of salary.

Paid leave is built into the salary cost. Every worker gets 4 weeks of paid annual holidays after 12 months. They also get 10 days of paid sick leave each year after 6 months. There are 11 national public holidays on top.

## The headline: what a New Zealand hire actually costs

Start with gross salary. Add the employer KiwiSaver contribution, which rises to 3.5% of gross pay from 1 April 2026. Add ACC work levies, which fund accident cover and vary by the type of work.

The table below shows illustrative totals on a NZD 90,000 salary. These are computed from verified statutory rates and labelled illustrative. They are not statutory figures.

New Zealand's employer add-ons are light compared with most developed markets. There's no broad payroll tax. There's no general social security levy on the employer. The two recurring statutory lines are the KiwiSaver employer contribution and ACC work levies. Everything else, like paid leave, is built into the salary you already pay.

| Line | Illustrative cost on a NZD 90,000 salary | Source |
| --- | --- | --- |
| Gross salary | NZD 90,000 | Contract |
| Employer KiwiSaver at 3.5% of gross (from 1 April 2026) | NZD 3,150 (illustrative) | [Inland Revenue: KiwiSaver changes](https://www.ird.govt.nz/kiwisaver-changes) |
| ACC Work Account levy (rate varies by job classification) | Variable; commonly a low percent of payroll | [ACC: Levies for business](https://www.acc.co.nz/for-business/understanding-levies-if-you-work-or-own-a-business/) |
| Paid annual holidays: 4 weeks per year (employer cost built into salary) | Included in salary | [Employment NZ: Annual holidays](https://www.employment.govt.nz/leave-and-holidays/annual-holidays) |
| Paid sick leave: 10 days per year after 6 months (event-driven, employer-funded) | Variable; typically modest per worker per year | [Employment NZ: Sick leave](https://www.employment.govt.nz/leave-and-holidays/sick-leave) |
| Broad payroll tax or social security charge | None | N/A |
| **Total illustrative employer cost** | **~NZD 93,150 plus ACC, before the Teamed fee** | **~104% of gross plus ACC (illustrative)** |

These figures are illustrative. They're computed from the 3.5% employer KiwiSaver rate applied to gross pay, with ACC shown separately because it varies by job type. They aren't statutory figures. KiwiSaver only applies where the worker is enrolled in the scheme. ACC levies are set by Work Account classification, so the exact rate depends on the role.

Add Teamed from $599 per employee per month and the total rises by a known, flat amount. Use the [Employer Cost Calculator](https://www.teamed.global/tools/employer-cost) to run your own salary figures.

1. Start with gross salary Confirm the agreed gross salary in New Zealand dollars. This is the base number every other line builds on, including the KiwiSaver contribution.
2. Add the employer KiwiSaver contribution Apply the employer KiwiSaver rate to gross pay where the worker is enrolled. The minimum rate steps up at the start of the new tax year, so use the current rate for the pay period.
3. Add the ACC work levy Add the ACC Work Account levy for the role's classification. The rate depends on the type of work, so two roles on the same salary can carry different levies.
4. Model leave and sick pay as event costs Annual holidays, sick leave, and parental leave are employer-funded or state-funded but event-driven. Budget them as variable costs that arise when used, not as fixed monthly charges.
5. Plan for the first 90 days and exit terms Set the trial period and redundancy terms deliberately in the agreement before the worker starts. Build fair-process documentation into your headcount planning from day one.

## KiwiSaver and ACC: the two employer lines

KiwiSaver is the main recurring add-on. The minimum employer contribution rises to 3.5% of gross pay from 1 April 2026. It was 3% before then.

ACC work levies are the second line. They fund cover for work injuries. The rate depends on the job, so two roles can carry different levies on the same salary.

### KiwiSaver

KiwiSaver is New Zealand's voluntary retirement savings scheme. When a worker is enrolled, the employer must contribute a minimum percentage of their gross pay. That minimum is 3% now and rises to 3.5% from 1 April 2026. The worker contributes a matching minimum of 3%, and can choose to put in 4%, 6%, 8% or 10% instead. The employer pays its contribution on top of salary. A 12.5% rate is scheduled from 1 April 2028, which moves the rate again, so model the 3.5% figure for the 2026 year and revisit it before April 2028.

Inland Revenue · KiwiSaver changes (Budget 2025)

Minimum employer KiwiSaver contribution: **3.5%** of gross pay from 1 April 2026, up from **3%**. The worker's minimum contribution rises to the same rate. A further rise to 4% is scheduled from 1 April 2028. The employer pays its share on top of salary, only where the worker is enrolled.

Source: [Inland Revenue: KiwiSaver changes](https://www.ird.govt.nz/kiwisaver-changes)

### ACC work levies

The Accident Compensation Corporation (ACC) runs New Zealand's no-fault accident cover. Employers pay a Work Account levy that funds cover for work injuries. The rate is set by the job's classification, so a desk role and a construction role carry different levies on the same salary. ACC bills the levy annually based on payroll and the classification unit. Treat it as a low, role-dependent percentage of payroll rather than a starting rate. The cache holds no national ACC levy figure, so check the current rate for the specific role with ACC before budgeting.

### PAYE is not an employer cost

PAYE is the income tax the employer deducts from the worker's pay and sends to Inland Revenue. It comes out of the worker's salary, not the employer's pocket, so it's not an employer cost in cash terms. The employer's job is to deduct it correctly and pay it on time. Late or wrong PAYE is where cost shows up, through penalties and interest, not the rate itself.

### No broad payroll tax

New Zealand has no broad payroll tax and no general employer social security charge. There's no equivalent of US FICA or UK National Insurance on the employer side. For cost modelling, the recurring statutory employer lines are KiwiSaver and ACC only. That's what keeps the New Zealand employer add-on well below most developed markets.

## PAYE bands: what the employer deducts from every salary

New Zealand uses a progressive income tax system with five bands. The employer deducts PAYE from each pay run and sends it to Inland Revenue.

The bottom band is 10.5% on the first slice of income. The top rate is 39% on income above NZD 180,000. This is the worker's tax, not an employer cost.

PAYE is the employer's main monthly compliance job in New Zealand. Each pay run, the employer works out the income tax for every worker, deducts it, and pays it to Inland Revenue with the payday filing return. There's no broad payroll tax sitting alongside it, so PAYE plus KiwiSaver and ACC is the whole statutory picture.

### The 2026 New Zealand income tax bands

The five progressive bands below apply for the 2025-26 tax year, effective from 1 April 2025. Tax is worked out band by band, so a higher salary is taxed at the top rate only on the slice above each threshold, not on the whole amount.

| Annual taxable income band | Marginal rate |
| --- | --- |
| $0 to $15,600 | 10.5% |
| $15,601 to $53,500 | 17.5% |
| $53,501 to $78,100 | 30% |
| $78,101 to $180,000 | 33% |
| $180,001 and over | 39% |

Source: [Inland Revenue: Tax rates for individuals](https://www.ird.govt.nz/income-tax/income-tax-for-individuals/tax-codes-and-tax-rates-for-individuals/tax-rates-for-individuals)

The top marginal rate is 39% on income above NZD 180,000. This is the worker's tax cost. The employer's job is to deduct, file, and pay it correctly and on time. Income tax becomes an employer liability only when the employer gets the deduction wrong or misses a payday filing deadline.

## Leave and sick pay: what the law requires

Every New Zealand worker gets 4 weeks of paid annual holidays after 12 months of continuous work. The pay rate is the greater of ordinary weekly pay or average weekly earnings.

Paid sick leave is 10 days a year after 6 months. Unused sick leave carries over up to a cap of 20 days in total.

New Zealand's leave entitlements sit in the Holidays Act 2003. The employer funds them directly. They aren't insurance-backed.

### Annual holidays

The minimum is 4 weeks of paid annual holidays after 12 months of continuous employment, under the [Holidays Act 2003](https://www.employment.govt.nz/leave-and-holidays/annual-holidays). Holiday pay is the greater of the worker's ordinary weekly pay or their average weekly earnings, so it can be higher than base salary for workers with variable pay. Any unused annual holidays are paid out when employment ends. Budget the full 4 weeks as a real cost, because it's a legal entitlement, not a discretionary perk.

### Public holidays

New Zealand has 11 national public holidays a year, plus a regional anniversary day, under the [Holidays Act 2003](https://www.employment.govt.nz/leave-and-holidays/public-holidays). A worker who works on a public holiday gets at least time and a half, plus an alternative day off if it's a day they'd normally work. Mondayisation moves some holidays to the next working day when they fall on a weekend. This is separate from annual holidays.

### Sick leave

After 6 months of continuous work, a worker is entitled to 10 days of paid sick leave each year, under the [Holidays Act 2003](https://www.employment.govt.nz/leave-and-holidays/sick-leave). Unused sick leave rolls into the next year up to a maximum of 20 days in total. The employer funds these payments directly. There's no reimbursement mechanism. Budget sick pay as an event-driven cost, not a fixed monthly charge.

### Parental leave

Primary carer leave runs up to 26 weeks, paid by the government through Inland Revenue rather than the employer, under the [Parental Leave and Employment Protection Act 1987](https://www.employment.govt.nz/leave-and-holidays/parental-leave). Because the state funds the payment, primary carer leave isn't a direct employer salary cost, though the employer must keep the role open. Partners get up to 2 weeks of unpaid leave. The main employer cost of parental leave is cover and continuity, not pay.

## The costs that don't appear on a salary sheet

Three items sit outside the standard add-on calculation. They're real. They arrive when you least expect them.

The first 90 days of a hire, redundancy terms in the contract, and personal grievance exposure can each produce costs that dwarf the recurring statutory lines if they aren't planned for.

### Trial periods and the first 90 days

An employer can put a first-time employee on a trial period of up to 90 days, under [section 67A of the Employment Relations Act 2000](https://www.employment.govt.nz/starting-employment/hiring/trial-periods). It only applies where the worker hasn't worked for the employer before, and it must be written into the agreement before they start. Get the wording or the timing wrong and the trial period doesn't hold, which removes the protection it was meant to give. The cost here is procedural, not a fee, but a botched trial clause can turn a quick exit into a personal grievance.

### Redundancy is contractual, not statutory

New Zealand has no statutory redundancy or severance pay. Whether a worker gets a redundancy payment depends entirely on what's written in their employment agreement. So redundancy cost is whatever you agreed to, not a fixed legal formula. Set the redundancy terms deliberately when you draft the agreement, because the contract is the only source of the entitlement. The minimum wage is set hourly at NZ$ 23.50/hour; there's no monthly minimum, so confirm the hourly rate covers the role's hours.

### Personal grievance exposure

A worker who believes they were dismissed unfairly can raise a personal grievance within 90 days of the issue, under [section 114 of the Employment Relations Act 2000](https://www.employment.govt.nz/resolving-problems/how-to-resolve-problems/personal-grievances). A successful grievance can mean lost wages and compensation for hurt and humiliation, which can run well past the annual statutory add-on cost. From 21 February 2026, workers earning NZ$ 200,000/year or more lose the standard unjustified-dismissal protection, with a 12-month transition. Below that income, good process from day one is the cheapest protection.

### Payday filing accuracy

The employer must file payday information with Inland Revenue every pay run and pay PAYE and KiwiSaver on time. Employment agreements must set maximum hours at no more than 40 hours a week unless both sides agree otherwise, which affects how holiday and overtime pay are worked out. Getting deductions, hours, and filing right matters more for most New Zealand payroll budgets than the headline KiwiSaver rate.

## How Teamed handles New Zealand employment costs for you

Teamed becomes your legal [employer of record](/lp/employer-of-record) in New Zealand for [**from $599 per employee per month**](/pricing), with **zero FX mark-up** in any currency.

PAYE, KiwiSaver, ACC, and the full New Zealand employment compliance stack run on **one platform**.

**Real HR and legal experts** handle your New Zealand hires from the first offer letter through every Inland Revenue payday filing and annual return. **An actual person**, not a chatbot or a pooled queue. There's **no setup fee** and **no exit fee**. Every employer cost **passes through at cost, itemised** on every invoice. You see the KiwiSaver line, the ACC line, and any leave liability. Nothing is buried inside the management fee.

EOR payroll, contractor onboarding, and entity setup all live on **one platform**. A New Zealand contractor who converts to employment keeps their record. That same worker can **graduate** from EOR to your own New Zealand entity without switching systems. EOR is the right structure for a first New Zealand hire, **until it isn't**. Teamed plans that move with you rather than slowing it down. Start from [the New Zealand hiring overview](/country-hiring-guides/new-zealand) or run the [Employer Cost Calculator](https://www.teamed.global/tools/employer-cost) to see the full picture.

## Frequently asked questions

What does it cost to hire an employee in New Zealand in 2026?

New Zealand is one of the lightest developed markets for employer add-ons. There's no broad payroll tax and no general employer social security charge. The recurring statutory employer lines are KiwiSaver, which rises to 3.5% of gross pay from 1 April 2026, and ACC work levies, which vary by job type. Paid leave is built into salary. Add Teamed from $599 per employee per month for the full employer-of-record service.

How much is the employer KiwiSaver contribution in New Zealand?

The minimum employer KiwiSaver contribution is 3% of gross pay now and rises to 3.5% from 1 April 2026. The worker contributes a matching minimum of 3% and can choose a higher rate. A further rise to 4% is scheduled from 1 April 2028. The employer pays its share on top of salary, only where the worker is enrolled in KiwiSaver.

Does New Zealand have a payroll tax or social security charge?

No. New Zealand has no broad payroll tax and no general employer social security charge, unlike US FICA or UK National Insurance. The employer's recurring statutory costs are the KiwiSaver contribution and ACC work levies. PAYE income tax is deducted from the worker's pay, so it isn't an employer cost. This is why New Zealand sits near the bottom of the developed-market cost table for employer add-ons.

What paid leave is a New Zealand employee entitled to?

Every worker gets 4 weeks of paid annual holidays after 12 months of continuous work, paid at the greater of ordinary weekly pay or average weekly earnings. They also get 10 days of paid sick leave each year after 6 months, which carries over up to a cap of 20 days in total. There are 11 national public holidays on top, plus a regional anniversary day.

Is there statutory redundancy or severance pay in New Zealand?

No. New Zealand has no statutory redundancy or severance pay. Whether a worker is entitled to a redundancy payment depends entirely on what's written in their employment agreement. So redundancy cost is whatever you agreed to in the contract, not a fixed legal formula. Set the terms deliberately when you draft the agreement, because the contract is the only source of the entitlement.

Who pays for parental leave in New Zealand?

Primary carer leave runs up to 26 weeks and is paid by the government through Inland Revenue, not the employer. So it isn't a direct employer salary cost, though the employer must keep the role open. Partners get up to 2 weeks of unpaid leave. The main employer cost of parental leave is cover and continuity, not pay.

Teamed Legal Operations

New Zealand is one of the cheapest developed markets to employ in, on paper, because there's no broad payroll tax and no employer social security charge. The recurring statutory employer cost is KiwiSaver plus ACC, and that's it. The number to watch is the KiwiSaver step-up to 3.5 percent in April 2026, with a further rise scheduled for 2028. The real spend is process, getting trial periods and exits right, not the contribution rate.

A note from Tom Price-Daniel

New Zealand's employer KiwiSaver minimum steps up to 3.5% on 1 April 2026.  
Pair that with no broad payroll tax and 4 weeks paid holidays, and New Zealand sits near the bottom of the developed-market cost table.  
Know the KiwiSaver rate. Know the ACC class. Know the exit terms before you sign the offer.

Tom Price-Daniel · Co-founder, Teamed

## Related New Zealand guides

- [Hiring in New Zealand, overview](/country-hiring-guides/new-zealand)parent
- [New Zealand tax and payroll](/country-hiring-guides/new-zealand/tax-and-payroll)sibling
- [New Zealand termination and severance](/country-hiring-guides/new-zealand/termination-and-severance)sibling
- [Employer of Record overview](/lp/employer-of-record)core
- [Pricing, Zero FX Fixed](/pricing)core
- [Employer Cost Calculator](https://www.teamed.global/tools/employer-cost)tool
- [Talk to an expert](https://www.teamed.global/contact)CTA

A note on this page.

This is a guide, not legal, tax or accounting advice. Rules change and vary by jurisdiction. Verify current requirements with Inland Revenue and the Accident Compensation Corporation (ACC) before relying on any specific figure. Worked examples in this guide are illustrative only and computed from statutory rates. They are not statutory figures. The minimum employer KiwiSaver contribution rises to 3.5% from 1 April 2026, with a further increase scheduled from 1 April 2028; employers should confirm the rate that applies to each pay period. ACC work levies vary by job classification and are not a single national rate.