Find out what you know about hiring and managing people. NOTE: minimum wage rates go up on 1 April 2017. Question 9 will be updated then.
Glenn is the new manager of an orchard in Hastings. As he recruits pickers at a “bin rate” of $30 for each bin of apples, he tells them the average is three bins a day.
As Ollie, the owner, prepares to approve pay after the first week of harvest, he notices some pickers aren’t earning the daily minimum wage. They all work eight hours a day, but those picking three bins are only earning $90 a day instead of the $122 they’d earn if paid the hourly minimum wage.
Employment law states the amount earned by piece rate workers can’t be less than the minimum wage. If underpaid, these workers can ask a labour inspector to investigate.
For employees on piece rates, the amount earned an hour, day or week can’t be less than minimum wage. Glenn’s pickers could earn more than the minimum wage if they pick more, but they can't earn less than the minimum wage.
There are three minimum wage rates:
Minimum wage rates are reviewed every year. The current minimum rate that applies to employees on the starting-out and training minimum wage (before tax) is $12.20 an hour. The current adult minimum wage rate (before tax) is $15.25 an hour.
Minimum wage rates (external link) - Employment New Zealand
Ragna owns a Thai restaurant in Queenstown. As the summer season approaches, she hires extra staff, including teenagers looking for work over the school holidays.
She sees it as a win-win situation. The students get valuable work experience, and she saves money by paying them the starting-out wage.
One of the students is Abi, a Thai immigrant who previously helped out in her family’s restaurant in Bangkok. Ragna asks Abi to supervise the other new hires in the kitchen, leaving her free to run the front-of-house.
But Ragna is breaking the law. Employees who are supervising or training other workers are entitled to be paid at least the adult minimum wage. Abi should be paid the adult minimum wage at all times or Ragna risks a labour dispute.
You’ll find full details about pay for the different types of leave in our holidays and leave section .
In general, however, you should:
Find more detailed information about:
Payment for annual holidays — Employment New Zealand
Payment for other types of leave — Employment New Zealand
You need written permission from your employees for any deductions that aren’t required by law.
When you pay your employees’ salaries or wages, you legally have to make deductions to cover:
Try Inland Revenue’s (IR) PAYE / KiwiSaver deductions calculator (external link) to see how much you might have to pay.
As an employer, you could be asked by an employee or the government to make other tax or non-tax-related salary or wage deductions on the employee’s behalf. This includes things like:
Find out more about other deduction obligations.
For some other types of pay, like holiday pay and bonuses, you might have to pay extra tax to Inland Revenue (IR). These include:
Paying your employees is much easier with accurate records showing what they’ve earned, what they’re owed and what leave they’ve taken. You need to keep full records for at least six years for all employees, of:
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