When do you graduate from an EOR to your own New Zealand entity?
From 1 April 2026 the minimum KiwiSaver employer contribution rises to 3.5%, and that cost lands the same whether you run an EOR or your own company. What actually moves the decision is the fixed overhead of a New Zealand company: a Companies Office registration that completes in a day or two, then the slower work of an IRD payroll setup, a KiwiSaver scheme, and a business bank account. Here is the full cost comparison, and the decision factors that sit outside the spreadsheet.
· New Zealand guide
Illustration · Auckland, New Zealand
EOR is faster and cheaper at low headcount in New Zealand. Registering a company at the Companies Office takes a day or two. Getting payroll, KiwiSaver, and a bank account live takes longer. Formation typically costs NZD 4,000 to 12,000.
Running a New Zealand company costs roughly NZD 6,000 to 11,000 per month. These are typical market ranges, not law figures. They vary with your outsourcing model and how detailed your payroll setup is.
The crossover typically lands around 6 to 9 employees for common Auckland and Wellington salary bands. KiwiSaver employer contributions are 3% today. They rise to 3.5% from 1 April 2026. That cost is the same on both sides. The entity side also carries formation costs and ongoing compliance work.
The crossover maths
EOR cost scales with headcount. One fee per employee per month. Entity cost has a fixed overhead. That fixed line and the EOR line cross at around 6 to 9 employees for typical New Zealand tech salaries.
Teamed charges from $599 per employee per month. A typical New Zealand company carries a fixed monthly overhead of NZD 6,000 to 11,000 for payroll, bookkeeping, statutory filings, and HR admin.
The table below uses NZD 1,000 as an illustrative NZD equivalent of the Teamed fee. This is illustrative. The actual NZD amount depends on the exchange rate at the time of invoice. Teamed charges from $599 USD with zero FX mark-up.
All entity cost figures in this table are typical ranges. They cover outsourced payroll, bookkeeping, statutory filings, and HR admin for a small New Zealand company. They are illustrative, not law figures. Actual costs vary with your outsourcing model and benefits programme.
One statutory cost sits on both sides of this comparison. KiwiSaver is the workplace savings scheme every employer must offer. The minimum employer contribution is 3% of gross pay today. It rises to 3.5% from 1 April 2026 (KiwiSaver Act 2006, as amended by Budget 2025). The same rate applies whether you employ through an EOR or your own company. It does not move the crossover much. It does add another monthly filing to the entity side.
Run the Crossover Calculator with your own headcount and salary band.
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Calculate the EOR cost
Multiply the Teamed fee (from $599 USD) by your planned New Zealand headcount. This is the fixed variable cost. It grows in a straight line as you hire.
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Estimate the entity fixed overhead
Typically NZD 6,000 to 11,000 per month for a small New Zealand company. This covers payroll, bookkeeping, statutory filings, PAYE, KiwiSaver, and first-point HR. This cost does not grow much until headcount exceeds twelve.
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Find the crossover headcount
The crossover is where EOR monthly cost equals entity monthly overhead. For most Auckland and Wellington tech salary bands, this is around six to nine employees. Use the Crossover Calculator for your own numbers.
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Factor in non-financial triggers
The maths gives you a headcount threshold. Local presence requirements, government procurement eligibility, and market-validation reversibility are separate questions that may override the cost crossover in either direction.
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Plan the graduation date
Allow three to six weeks for entity formation before the first payroll on your own company. The bank account and payroll setup are the slow steps. Start the GEMO process while EOR continues running.
New Zealand entity setup: what it actually costs
Forming a New Zealand company typically costs NZD 4,000 to 12,000 all-in. The Companies Office registration fee is small. The gap between that fee and NZD 12,000 is professional fees, IRD and KiwiSaver setup, and bank account work.
Allow roughly 3 to 6 weeks from the decision to your first payroll run. Company registration is fast. The bank account and payroll setup are the slow steps.
These are typical ranges, not law figures. No law sets what a New Zealand company costs to form. The range reflects real professional services market rates in Auckland and Wellington. It varies with share structure and how much you outsource.
| Cost item | Typical range | One-off or recurring |
|---|---|---|
| Companies Office registration and name reservation | NZD 130 to 200 | One-off |
| Constitution drafting (optional but common) | NZD 800 to 2,500 | One-off |
| IRD number and employer (PAYE) registration | NZD 0 direct (admin time) | One-off |
| KiwiSaver scheme enrolment setup | NZD 0 direct (admin time) | One-off |
| Business bank account | NZD 0 to 500 (setup varies) | One-off plus monthly fees |
| Employment agreement templates | NZD 1,200 to 3,500 | One-off |
| Employee handbook and HR policies | NZD 1,500 to 4,000 | One-off |
| Registered office / agent fee | NZD 400 to 1,200 per year | Recurring |
| Accountant onboarding and first-year setup | NZD 1,500 to 4,000 | One-off |
| Realistic total setup cost | NZD 4,000 to 12,000 | Mostly one-off |
Why the bank account matters for payroll
You cannot run a compliant payroll without a New Zealand business bank account to pay wages and remit PAYE. Banks run anti-money-laundering checks on every director and shareholder. For New Zealand-resident directors this is quick. For overseas directors it is slower, because the bank needs certified identity documents and sometimes an in-person or video verification. Expect 2 to 4 weeks for the account if all directors are local, and up to 6 weeks if directors are overseas. That turns a one-day company registration into a 3 to 6 week wait before first payroll if the sequence is not managed tightly.
New Zealand entity ongoing cost: typically NZD 6,000 to 11,000 per month
Running a small New Zealand company typically costs NZD 6,000 to 11,000 per month. That covers outsourced payroll, bookkeeping, statutory filings, and first-point HR.
Below 5 employees, this fixed overhead dominates the per-head cost. Above 12 employees the overhead amortises and the entity starts to look cheaper.
These figures are typical market ranges for a small New Zealand company with 1 to 12 employees. They are illustrative, not law figures. Actual costs depend on whether you outsource or hire in-house, and on how detailed your payroll and benefits programme is.
| Monthly cost item | Typical range (NZD) | What it covers |
|---|---|---|
| Outsourced bookkeeping and monthly accounts | 1,500 to 3,000 | Reconciliation, accruals, monthly management accounts |
| Payroll service (1 to 12 employees) | 800 to 2,000 | PAYE, KiwiSaver, payday filing, payslips |
| Annual accounts and tax return (amortised) | 500 to 1,200 | NZD 6,000 to 14,000 per year divided by 12 |
| Company filings and annual return (amortised) | 100 to 300 | Companies Office annual return and registers |
| HR and employment law advisory | 700 to 1,800 | Agreement reviews, disciplinary support, policy updates |
| New Zealand People Ops and first-point HR | 1,500 to 3,000 | Onboarding, leave admin, employee queries |
| Software subscriptions (HRIS, payroll, accounting) | 400 to 1,000 | Per-user SaaS tools |
| Insurance (public liability, ACC top-ups, medical) | 500 to 1,200 | Employer cover and optional benefits |
| Total ongoing monthly | 6,000 to 11,000 | 1 to 12 employee company |
Above 12 employees, dedicated in-house HR and finance capacity typically becomes necessary. The cost band widens at that point. Southern Cross or nib medical insurance, common in competitive Auckland hiring, can add NZD 100 to 250 per employee per month and is not included in the overhead estimates above.
The cost nobody quotes: director liability
New Zealand directors carry personal duties under the Companies Act 1993. These cannot be passed to an advisor. Late or incorrect filings attract personal penalties.
EOR clients do not carry these duties. Teamed holds them as the legal employer.
Most cost comparisons skip the director-liability dimension because it is hard to put a number on. It is worth naming before you decide.
Personal director duties under New Zealand law
Under the Companies Act 1993, every director of a New Zealand company must act in good faith and in the best interests of the company, exercise care and diligence, and avoid trading while insolvent. Breach of these duties can result in personal civil liability, and in serious cases personal prosecution. These are personal duties. They cannot be outsourced to an accountant or company secretary.
The compliance rhythm
- Payday filing: PAYE and KiwiSaver details filed with Inland Revenue within two working days of each payday.
- KiwiSaver contributions: the employer minimum is 3% today and rises to 3.5% from 1 April 2026. Remitted with each PAYE return.
- PAYE remittance: deducted tax paid to Inland Revenue monthly, or twice monthly for larger employers.
- ACC levies: the work account levy is invoiced annually by the Accident Compensation Corporation.
- Annual return: filed with the Companies Office each year to keep the company on the register.
- Annual accounts and income tax return: prepared and filed each year.
Each filing is individually manageable. Stacked across a year, they consume real management attention and carry personal director risk on every missed deadline. An EOR carries all of these on its own entity.
When you should stay on EOR
Below 5 employees, during market validation, or on project-based hires, the EOR is the right answer. The crossover is a maths threshold. It is not a strategic verdict.
Reversibility matters in New Zealand. Ending an EOR relationship is straightforward. Winding down a New Zealand company means a Companies Office removal, an IRD tax clearance, and settling employee entitlements first. It is not fast.
- Under 5 New Zealand employees at typical Auckland or Wellington salaries: EOR is cheaper every month. The entity overhead has nothing to amortise against at that headcount.
- Market validation phase: you are hiring 1 or 2 people to test commercial fit. Forming a company commits capital and management attention before you know whether New Zealand will deliver.
- Project-based hires: 6 to 12 month engagements where the formation cost will not amortise before the project ends.
- Uncertain headcount trajectory: New Zealand is a priority market but you have not yet committed to long-term headcount growth. EOR keeps your options open.
- Hiring senior people on high salaries: from 21 February 2026 employees earning NZ$ 200,000 or more a year can be excluded from unjustified-dismissal protections by agreement. An EOR partner manages how that clause is drafted and applied so you do not get it wrong on your own.
When you should switch to your own entity
Above 8 employees consistently, with a multi-year New Zealand plan, or where local presence matters to enterprise customers, your own entity starts winning on cost. It also unlocks things the EOR structure cannot provide.
Some New Zealand opportunities need a locally registered company, not EOR employment. Government procurement and certain regulated sectors are the common triggers.
- Sustained headcount above 8 New Zealand employees at typical salaries: the entity overhead amortises across enough people that per-head cost falls below the EOR fee.
- Local presence requirements: some regulated sectors and enterprise customers expect a registered New Zealand company with a local address and local directors. EOR employment does not provide that registered presence.
- Government procurement eligibility: New Zealand government tenders often favour or require a locally registered supplier. An EOR employer does not qualify as a locally registered business for these purposes.
- Employee share schemes: senior hires expecting equity in a New Zealand-registered company need a local entity to structure those arrangements.
- Multi-year growth plan: you have line of sight to 10 or more New Zealand employees over 24 months. Starting formation early means your company is ready before the crossover, not after it.
How Teamed's Graduation Model handles the transition
Teamed graduates customers from EOR to their own entity on the same platform. Same New Zealand specialist. Same employment agreements, novated to the new company. No break in employee tenure or entitlements.
Most providers treat graduation as a re-onboarding event. Employees re-sign, sometimes lose continuous service, and lose accrued leave. Teamed treats it as a stage of the employment lifecycle.
The technical mechanic is contract novation: the employment agreement transfers from Teamed's partner entity to your new New Zealand company on a set date. All terms carry across. Salary, KiwiSaver contributions, annual holidays, and continuous service date all stay the same. The employee sees a different employer name on their payslip. Nothing else changes.
What we do operationally:
- Stand up your New Zealand entity through GEMO, typically around 3 to 6 weeks, while EOR continues running in parallel.
- Register the new company with Inland Revenue for PAYE and set up the KiwiSaver scheme.
- Open the entity bank account and payroll mandate.
- Novate every active employment agreement on a single effective date.
- Migrate ongoing benefits, including any medical cover, without any lapse.
- File final EOR-period returns and open new payday filing on the entity from the novation date.
- Provide the same People Ops specialist as the post-graduation primary contact.
The Graduation Model exists because every other EOR makes this hard. We treat the move as something we help you plan for from the day you hire your first employee through us.
How does Teamed handle New Zealand employment for you?
Teamed becomes your legal employer of record in New Zealand for from $599 per employee per month, with zero FX mark-up in any currency.
EOR is the right structure until it isn't. When the maths flips, we help you graduate to your own New Zealand company. Payroll, benefits, and the full employment law stack run on one platform.
Real HR and legal experts handle your New Zealand hires from the first offer letter through every payday filing and annual return. An actual person, not a chatbot or a pooled queue. There is no setup fee and no exit fee. Every employer cost passes through at cost, itemised on every invoice. You see the KiwiSaver employer line at 3%, rising to 3.5% from 1 April 2026, and the annual holidays accrual for 4 weeks. Nothing is buried inside the management fee.
EOR payroll, contractor onboarding, and entity setup all live on one platform. Run the Crossover Calculator to see the month the model flips. Start from the New Zealand hiring overview. Key sources: Inland Revenue KiwiSaver for employers and Employment New Zealand annual holidays.
New Zealand statutory employer cost, both sides
KiwiSaver employer minimum is 3% of gross pay, rising to 3.5% from 1 April 2026. Annual holidays accrue at 4 weeks after 12 months. Source: Inland Revenue.
Frequently asked questions
At what headcount does an EOR stop being cheaper than a New Zealand entity?
The crossover typically lands around six to nine New Zealand employees at typical Auckland and Wellington tech salaries. Below that, the EOR fee (from $599 per employee per month) is cheaper than the typical entity overhead of NZD 6,000 to 11,000 per month. Above it, the entity overhead amortises and per-employee cost falls below the EOR fee. Use the Crossover Calculator to run your own salary band.
How much does it cost to set up a New Zealand company?
Typically NZD 4,000 to 12,000 all-in. The Companies Office registration fee itself is small, around NZD 130 to 200. The rest is professional fees: constitution and employment agreement drafting, HR policies, accountant onboarding, and getting payroll and a bank account live. The range varies with share structure and how much you outsource to a local firm.
How long does it take to set up a New Zealand entity and run the first payroll?
Around three to six weeks from the decision to first payroll if you use a local corporate services firm or Teamed GEMO. Company registration itself takes a day or two. The bank account is the common gating step. Budget two to four weeks for a business account to open after registration, and up to six weeks if directors are not New Zealand-resident.
What are the statutory employer costs on both sides of the comparison?
The main one is KiwiSaver, the workplace savings scheme. The employer minimum contribution is 3% of gross pay today, rising to 3.5% from 1 April 2026. Annual holidays accrue at 4 weeks after 12 months. These apply whether you employ via EOR or your own company. New Zealand has no general statutory severance pay and no statutory minimum notice period. Both are set in the employment agreement instead.
What is Teamed's Graduation Model for New Zealand?
Teamed graduates customers from EOR to their own New Zealand company on the same platform. Employment agreements are novated to the new company on a single date. Salary, KiwiSaver contributions, annual holidays, and continuous service date all carry over unchanged. Teamed handles entity formation through GEMO, registers the new company with Inland Revenue for PAYE and KiwiSaver, and migrates benefits without any lapse.
New Zealand registers a company in a day, which makes the entity look easy. The slow part is everything after: an IRD employer setup, a KiwiSaver scheme, payday filing, and a business bank account that runs anti-money-laundering checks on every director. The EOR absorbs that rhythm from day one. The entity clock does not start until your payroll bureau is live and your account is open.
Registering a New Zealand company takes a day. Getting payroll and a bank account live is the wait.
EOR is the right answer up to the crossover, around six to nine employees at Auckland and Wellington salaries.
When the maths flips, we tell you and move you across. That is the only honest version of this.
