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Accommodation for workers

Accommodation for workers

By law, anyone working for you in return for food or accommodation is most likely an employee. You may also be their landlord.

Workers are sometimes brought in by businesses to do seasonal or casual work in exchange for accommodation or board. Arrangements like this are common in industries like farming, hospitality and tourism. Workers are often:

  • seasonal or casual
  • backpackers
  • travellers
  • willing workers on organic farm (WWOOFers).

These workers are likely to be employees and are protected under New Zealand employment law.

If you provide your workers with meals or a place to live, there are employment, tenancy and tax rules to follow.

Some of these rules exist to protect workers, to ensure everyone gets the pay they are entitled to and healthy accommodation to live in.

We’ve brought together the relevant laws and rules with links to more information to help you get it right.

Employee vs. volunteer

Most workers are employees, not volunteers – even if they work a few hours a week. It is important to get their legal employment status right.

A worker is more most likely an employee if they meet any of the following criteria:

  • the worker is paid for their work (including if workers are given free accommodation or food, or if the cost is being deducted from their wages)
  • the worker expects to be rewarded for their work
  • the business makes money as a result of the work done by the worker
  • the work is integral to the business and an employee would normally do it
  • the hours of work are controlled or scheduled.

Who is an employee(external link) — Employment New Zealand

FAQs working for accommodation [PDF, 476KB](external link) — Employment New Zealand

All workers must be allowed to work in New Zealand.

All workers must be allowed to work in New Zealand.

To work in New Zealand, a person must be a New Zealand or Australian citizen or have a visa that allows them to work, for example a residence visa or a working holiday visa.

Employ migrants(external link) — Immigration New Zealand

Minimum standards for employees

All employers must meet minimum employment standards. These employer requirements include:

  • ensuring employees have the right to work in New Zealand
  • having employment agreements in writing
  • paying their employees at least the relevant minimum wage in money
  • keeping a record of hours worked, wages paid and leave taken
  • ensuring employees have minimum holiday and sick leave entitlements
  • meeting all other legal requirements, for example PAYE, ACC, and health & safety.

Creating an employment agreement

Minimum pay rules

Introduction to holidays and leave

Can you pay a person with accommodation?

You can’t directly pay an employee in accommodation only. Payment for work must be in money.

However, employers can arrange accommodation for their employees and deduct the cost from their wages if agreed. This rental agreement must be in writing in either:

  • a tenancy agreement
  • an accommodation agreement.

It should be separate from the employment agreement, or able to be separated.

The value of the work being performed must be written in the employment and agreed to by the employee. The wage records should include the wages payable before the agreed value of accommodation is deducted.Take note that the job can’t be dependent on the employee staying in the accommodation.

For more about tenancy agreements and landlord considerations, see the section below Are your employees also your tenants?

How much to charge?

As an employer, you’ll need to estimate the value of the accommodation you’re providing. Think about what is likely to be paid for similar accommodation in a similar location. For example, if an employee is staying in a backpacker hostel, the room rate might be a good estimate to use.

If there is no specific agreement about the cost of accommodation, an employer may deduct from an employee’s wages, calculated at the relevant minimum wage rate, no more than 15% for board or 5% for lodging.

Further information about deductions can be found on the Employment New Zealand website.

Deductions (external link) — Employment New Zealand

Tax you might have to pay or can claim

There are tax rules to follow if you’re providing a place to stay or food for your workers. Some of these include:

  • payroll deductions
  • claiming expenses
  • GST
  • fringe benefit tax
  • tax for employees

Payroll deductions

For workers, it will be important to determine whether they are an employee or independent contractor. If your workers are employees, then you’re responsible for deducting and paying PAYE income tax on your employees’ behalf. Employers must deduct for things like KiwiSaver, child support and student loans. If the worker is a contractor, they will have their own tax considerations.

Payroll deductions

Claiming expenses

You may be able to claim expenses incurred in providing accommodation and other benefits to a worker. For example, the cost of groceries, heating and bed linen could be tax deductible. PAYE paid to Inland Revenue will also be deductible.

Claiming expenses


There may be GST implications too. You will be liable for GST on accommodation supplied to workers if it’s in a commercial dwelling, like a hotel, motel, farm stay, inn, hostel, or camping ground. If the accommodation is a private residence, like a house, then it is not liable for GST.


Fringe benefit tax

If you supply your employees with other non-cash benefits apart from accommodation, you may have fringe benefit tax obligations. For example, use of a car or subsidised transportation.

Fringe benefit tax

Tax for employees

All employees must complete a tax code declaration (IR 330) and apply for an IRD number.

Tax code declaration IR330 [PDF, 158KB](external link)— Inland Revenue

IRD numbers for individuals(external link) — Inland Revenue

Are your employees also your tenants?

If you are providing accommodation for your workers to live in, you are also likely to be their landlord. Tenancy law will probably apply to you and you’ll need a tenancy agreement. This type of tenancy is called a service tenancy.

If you have arranged for a third party to provide accommodation, eg a motel, then you may not be considered the landlord. In this case, the motel or other person/organisation would be the landlord. It really comes down to who is providing the accommodation.

Tenancy rules to follow

If you are the landlord, there is minimum information that you must provide that relates to the tenancy. This can be included in the employment agreement or you can have a separate tenancy agreement.

Tenancy Services has further guidance about what you need to do when providing accommodation for workers.

Service tenancy(external link) — Tenancy Services

As a landlord, the accommodation you’re providing must meet all the minimum requirements for rental properties, including building, health, and safety requirements. For example, you’ll need to provide working smoke alarms, keep the property in a maintained, liveable condition and make sure the accommodation is not overcrowded. 

Laws and bylaws(external link) — Tenancy Services

Healthy homes standards

You’ll also need to be across the healthy homes standards. These are minimum requirements for rental properties to improve heating, insulation, ventilation and drainage, reduce moisture and stop draughts. New and existing requirements come into effect in stages from 1 July 2019 to 1 July 2025. Check the healthy homes section of the Tenancy Services website to learn more about what you need to do and by when.

Healthy homes (external link) — Tenancy Services

This helpful checklist for landlords sets out the minimum requirements you need to meet.

Landlord compliance checklist(external link) — Tenancy Services


Sometimes tenancy law does not apply. One exception might be if workers stay in provided accommodation only when they are working, but live elsewhere when they are not. For example, if a team stays in shearing quarters on a farm during the week when they are working, but return to where they live permanently on their weekends off, then the shearing quarters would probably not be covered by tenancy law.

Health and safety

If you provide accommodation for your workers, the facilities must be maintained to keep your workers healthy and safe.

This applies if:

  • you own, manage or control the accommodation
  • your workers need to stay in the accommodation for work purposes because no other accommodation is available.

WorkSafe New Zealand has guidance on buildings, facilities and amenities for worker accommodation that applies to all industries.

Worker accommodation(external link) — WorkSafe NZ

Workplace and facilities requirements(external link) — WorkSafe NZ

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