Contractor Payroll in New Zealand

Positioning a candidate internationally means navigating unfamiliar tax and payroll systems. Not only does this generally mean more work for you, but even small missteps can have serious financial or even legal consequences.

If you want to successfully place a contractor, you should first familiarize yourself with the contractor payroll process in New Zealand, as well as how you can make the situation simpler.

Contractor Payroll in New Zealand

Payroll options in New Zealand

There are several different options for payroll in New Zealand:

  • The client can provide payroll for the contractor, but not all clients offer this for temporary workers.  
  • The contractor can do it on their own, but this creates serious risk for the end client and possibly your agency, as well. Like most people, many contractors do not specialise in New Zealand’s tax system, nor do they always have the time or means to pore over complex tax returns.
  • Your contractor can use a local payroll company.

The third option is the simplest and quickest. An even simpler and quicker option is to use an Umbrella Company, as they offer the same services as a local payroll provider in addition to other services that simplify international assignments (such as Work Permit sponsorship).

Check out our FAQ for specific quotes on payroll providers and Umbrella Companies. 

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Questions and Answers about Payroll in New Zealand

Q: How does payroll work in New Zealand?
A: Your employer (the company sponsoring your visa) pays the candidate on a monthly basis. There is no social security deductions in NZ for employers or employees - although employees pay an earners levy to cover injuries outside the workplace - called the Accident Compensation Corporation - which equates to 1.7% on income up to NZD 113,768. Your employer will also deduct income tax - which is progressive and varies from 10.5% to 33% pendant on salary level. These deductions are made at source and paid to the New Zealand tax authorities. Candidates are able to offset their taxable income with relevant business expenses. The World Bank estimates it takes employers in New Zealand 67 man days to ensure compliance with payroll and labour taxes each year.

Q: What is the monthly cost to outsource payroll in New Zealand?
A: $100 per person

Q: What is the estimated net retention for a contractor in New Zealand earning USD 1000 per day?
A: 65-75%

Q: What is the minimum salary required per month in New Zealand when a candidate is sponsored on an Work Permit?
A: $6,000 NZD

Client comment

"Great advice and excellent service on contracting and immigration solutions in the UK. I would highly recommend Tim and the team to assist you with accurate, clear and concise contracting advice in the UK or any other country for that matter."

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Shell International Trading & Shipping