New Zealand dollar (NZD)
New Zealand, or Māori Aotearoa as it is known in the local language, is an island country located in the South Pacific Ocean. It is situated southwest of Polynesia, and its nearest neighbor Australia lies more than 1,000 miles to the southeast. New Zealand was one of the last habitable areas on Earth to be populated and settled, due to its remote location. The country consists of the North and South Islands, as well as many small islands surrounding them. The capital, Wellington, is located on the North Island while Auckland hosts the largest population. New Zealand also has Tokelau–a group of South Pacific Islands–under its wing and claims a section of Antarctica. Lastly, Niue and the Cook Islands are self-governing states that have an agreement with the nation.
Recruitment in New Zealand is done through job portals which allow postings for more relevant profiles and candidature, head hunting is also used for recruitment. Combined, these two methods make for more achievable and hassle-free end-to-end recruitment.
Recruitment processes, identifying vacancies, job advertisements, screening, shortlisting, etc. are an important part of the hiring process. But interviews make the ultimate decision as they play a very important part in gauging personality.
CVs of candidates play an important role in making a favorable impression. The presentation and organization of the CV speak a lot about an individual and the person’s mindset and attitude. Thus allowing for the early screening of worthy candidates.
The standard parameters of employment in New Zealand:
Working Hours (Depend on the client’s company) – 7.5 – 8 hours in a day, Monday to Friday, approximately 40 hours a week
Probation Period (Depend on the client’s company) – The statutory probation period in New Zealand, which is applicable only to employees who have not worked for the employer before, begins on the first day of work and can be up to 90 days. The actual timeframe will be stipulated in the employment contract.
Payroll cycles– The pay cycle in New Zealand is on a bi-weekly, or monthly basis. Though there are no legal obligations to pay wages on fixed dates as employers reserve the right to decide their own pay cycle. The general schedule for payments is the following:
- Monthly – By the 28th to 30th of the month
- Bi-weekly – Every second week on any agreed day (usually on Wednesdays or Thursdays)
Official Deduction from Salary– Unpaid leave, Varying forms of taxes
Typical work hours in Australia– 9 am to 5 pm, Monday to Friday
There are a total of 10 public holidays provided for employees in New Zealand
Casual Leave/Sick Leave
After six months of continuous employment, New Zealand employees are now entitled to 10 days of sick leave per year, following the passage of the Holidays Amendment Bill.
The changes in the law only affect employees when they reach their next entitlement date. For some people, this may be after six months of employment. However, for others, it could be on the anniversary of their sick leave entitlement 12 months after receiving an entitlement to sick leave.
The new law stipulates that employees can only accumulate a maximum of ten unused sick days each year to add to their annual entitlements, making twenty the limit for current entitlement in any given year. This policy applies to all full-time, part-time, and fixed-term workers whose terms are longer than six months. A casual employee is entitled to sick leave if they have current continuous employment with the same employer for six months, or if they have worked an average of 10 hours per week for the employer for six months. Sick leave cannot be pro-rated in any way.
Maternity & Paternity Leave
Maternity leave is known as Primary carer leave in New Zealand and is available to:
Employees who are having a baby, their spouses or partners, and employees who will have the primary responsibility for caring for, developing, and raising a child under six years old permanently may qualify. This could be through adoption but does not include foster care or other temporary care situations. If the employee has a spouse or partner, they may choose who will be the primary caregiver.
Pregnant employees in New Zealand are entitled to 26 weeks of paid primary care leave. They will receive a government-funded payout of between 177 and 585 NZD per week before tax.
The primary carer leave begins on either the child’s due date or when the employee becomes the primary carer—whichever comes first. If an employer agrees, this leave can start up to six weeks before the baby is born or whenever the employee will become the primary carer of the child.
Paternity leave, called Partners leave in New Zealand, gives partners time off starting 21 days before the due date of the baby through 21 days after the birth. If for some reason the baby is discharged from a hospital more than three weeks after childbirth, then the paternity leave timeframe goes until that day instead.
All employees who have completed one year of service are entitled to four weeks of paid annual leave. If an employee does not use all their allotted days, they will be compensated for them upon termination.
The payroll process in New Zealand involves dues of the employees called ‘ gross income of the salary after tax’ after adjustments made from the ‘net income or the salary before tax’ for total tax deductions made from their respective salaries.
Take Home Pay = Net Salary – Total Tax Deducted
Important Elements of Salary Structure in New Zealand
The monthly or bi-weekly salary and wage disbursement are broken down into the following:
Net Salary – the total earnings/wages entitled to an employee before any form of tax deduction is applied.
Take Home Pay – this amount is the total money that an employee is able to take home after all taxes and contributions have been deducted from their respective Gross Income.
Total Tax Deducted – this is the sum of all the deductible taxes and contributions that are due to be deducted from the Net Salary of respective employees.
Payroll Cycle – The pay cycle in New Zealand is subject to the employer’s choice, however, the standard frequency is that of a monthly or a bi-weekly basis.
13th Salary- There are no laws in New Zealand facilitating provisions for a 13th salary.
Anything over the weekly average of hours is to be paid as overtime, and this fluctuation must first be discussed between boss and employee. There is no law that requires payment for extra time put in; however, employers will often fork out 150% of the regular salary rate.
Step 1: Get A Visa
Getting a visa is the first important step. There are two choices – an entrepreneur work visa and a residential visa.
- Entrepreneur Visa
The entrepreneur work visa is divided into two categories based on the development of your business. If you are ready to start a new venture, the application for a six-month visa will be accepted if approved.
If your business meets the important criteria of having at least NZ$100,000 in working capital, scoring a minimum of 120 points on the country’s grading system (which evaluates success and contributions) and demonstrating an unblemished history with no fraudulent or winding up activities involved – applying visa to remain in the land for another 24 months is possible.
- Residential Visa
If you’re a foreigner wishing to make this country your home and run a business, then the residential visa is for you. Note that it comes with more rigorous requirements than those needed for an entrepreneur work visa.
There are two available visas: the 6-month visa and the 2-year option. You must pass health, character, and language tests to be considered for either of these visas.
This visa can also be attained for 6 months without meeting the requirements if your business has an investment of NZ$500,000 provided that at least three citizens or residents of New Zealand are given permanent jobs.
Step 2: Come Up With A Business Structure
The next step–picking a suitable form of business structure. Sole proprietorship, partnership and limited company each offer unique advantages and drawbacks. As a sole trader, while you enjoy easy set-up processes as well as a full entitlement of your profits from the venture, remember that working with partners also allows access to valuable expertise and risk-sharing capabilities which cannot be found elsewhere.
For some, being a limited company is an optimal choice as your liabilities are restricted to the amount of your initial investment. However, these entities may be too burdensome and have stringent regulations that can make it difficult for everyone involved.
Step 3: Pick A Name
After deciding on your business structure, the next critical step is to select an available name. The NZ government offers ONECheck: an effortless online search tool that makes checking company names’ availability simple and fast. Once done, make sure to reserve your chosen name with the Companies Office right away.
Step 4: Set Up RealMe Login
Having a RealMe login would make life much easier. This set of usernames and passwords is in widespread use for online services within New Zealand due to the number of government departments that require it, from registering your business name, managing Inland Revenue accounts, or applying for permits.
Step 5: Create A Business Banking Account
It is imperative, especially as your business grows, to open a dedicated business banking account — not only for efficiency but also for protection. Blending personal and company transactions in one bank account leads to difficulties with asset security and accounting or tax filing complexities.
Step 6: Observe Legal Obligations
- New Zealand Business Number (NZBN)
Kiwi companies have a requirement to register and receive a New Zealand Business Number (NZBN). This individual code is specifically designed for each New Zealand company, with the intent of enabling easy identification as well as data sharing among businesses.
- Protect Your Brand
It is essential to have a distinct business identity. Investigate carefully to ensure that your brand logo does not unintentionally copy any current logos. Once you are sure that your trademark and logo are unique, register them right away. Registering for a domain name additionally guarantees the originality of your business’s branding.
- Obtain Licenses and Permits
It is essential to check the laws with the local government, as regulations vary between cities. Apart from any existing licenses or permits that you already know of, make sure you possess all necessary authorizations based on the type of business before launching it.
- Fulfil Tax Burdens
If your business generates more than NZ$60,000 yearly, it is essential to register for GST with the Inland Revenue Department. To prevent paying fines, ensure you are up-to-date on all filing deadlines. The Inland Revenue Department features various instructional videos and tax workshops that can help foreign investors comprehend their responsibilities regarding taxation easier and faster.
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