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Pay & Hours

How should I pay my employees and set their hours?

​See Below for Information on:​

How do I pay employees?

Minimum wage rates apply to all employees aged 16 and over and are reviewed each year by the government. There are three types of minimum wage:

 

  • Adult minimum wage: For employees aged 16 years or older and are not starting-out or a trainee

  • Starting-out minimum wage: For employees under 20 in specific situations 

  • Training minimum wage: For employees aged 20 or over and completing 60 credits of industry training. 

 

There are other ways to pay employees, such as piece rates (pay for a number of 'pieces' completed). However, employees paid per piece must still receive at least the minimum wage for each hour worked.


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You can find information on the three types of minimum wage here and the types of pay, allowances, paydays, and payslips here. 

 

It is also important to note that as an employer you are able to make deductions from an employee’s pay for specific requirements. See the IRD website here for more information. For employees who have opted into KiwiSaver, as an employer you are expected to make your own employer contribution to their KiwiSaver. More information on KiwiSaver can be found on the IRD website here. 

 

It's important to note that what you pay workers impacts their retention and job satisfaction. Constantly hiring and training staff as a result of employees leaving often result in higher costs overall for your business in lost productivity time. 

 

You can also provide additional benefits to your employees such as vehicles for personal and business use, petrol vouchers, and free food to attract and retain employees. Should you decide to do this, make sure you check what the tax implications of these benefits may be. Thinking about how you pay your employees is one of the first steps to attracting and keeping great people. Find out more information from the sector here (Beef and Lamb NZ) and here (Dairy NZ) on employee pay. 

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What do I need to know about hours and breaks?

Hours 

In your employee agreement, it's important to set the expected number of hours your employee will work each week (except for casual workers whose hours will vary). This should be no more than 40 hours, not including overtime, unless you and your employee agree on something different.

 

Make sure to also include:

 

  • the start and finish times

  • the days of the week the employee will work.

 

You can find more detailed information on working hours here. 

 

It's also a good idea to clearly outline any pay for any overtime or extra shifts in the employee agreement. Paying employees for working overtime or extra shift needs to be agreed to by the employer and employee and included in the employment agreement. 

 

Breaks

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Employees are entitled to breaks to help them work safely and productivity. They are entitled to rest breaks (10 minutes) and meal breaks (30 minutes). Break entitlement will differ depending on how many hours an employee has worked in one day. As an example, breaks for a typical 8-hour workday look like: 

 

  • Two paid rest breaks of 10 minutes each

  • One unpaid meal break of 30 minutes each. 

 

For more information on breaks and how to calculate them, you can find more information here.

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