The cost of hiring workers in a different jurisdiction can blow out, particularly if you’re not familiar will local employment law. It’s no different for global companies warning to hire in New Zealand, when unfamiliarity with local employment law can lull them into a false sense of security when it comes to hidden recruitment and employment costs.
What are the average salaries for skilled workers in New Zealand?
Particularly when New Zealand is currently experiencing economic pressure in the wake of the COVID crisis, employers are responsible for ensuring their workers get paid a fair salary for their work. This responsibility is only amplified by the fact that the country is struggling with one of its worst labour shortages in history.
One’s level of qualification in New Zealand will have a big impact on how much one should be paid, with a bachelor’s degree to earn up to 40% over the average income. The higher the qualification and the more experience a professional has, the more they’ll generally be paid. However, this all depends on the demand for their skills and how well they negotiate their salary with you as their employer.
Below are the average salaries for various skilled roles in New Zealand:
| Role | Base salary |
| HR Managers | NZD 90,000 to NZD 140,000 per year (Trade Me Jobs) |
| Software Developer | NZD 77,000 per year (Payscale) |
| Software Engineer | NZD 90,000 per year (Glassdoor) |
| Team Leader | NZD 75,000 per year (Payscale) |
| Senior Project Manager | NZD 140,000 to NZD 200,000 per year (Trade Me Jobs) |
| Program director (12+ years’ exp.) | NZD 180,000 per year (Payscale) |
| Accountant | NZD 50,000 to NZD 90,000 per year (Trade Me Jobs) |
| Accounting supervisor | NZD 77,000 per year (Payscale) |
How do the average salaries for New Zealand skilled workers compare to that of the United Kingdom and the United States?
According to data from the Organisation for Economic Co-operation and Development (OECD), the average annual salary for a skilled worker in New Zealand in 2021 was approximately NZD $79,000 (USD $50,000). This is lower than the average salaries for skilled workers in the United States and the United Kingdom.
As of 2021, the average annual salary for a skilled worker in the United States was approximately USD $68,000 (NZD $107,000), while in the United Kingdom, the average salary was around GBP £35,000 (equivalent to approximately NZD $76,000).
How much does it cost to recruit, hire and employ skilled workers in New Zealand?
International businesses wanting to hire workers in New Zealand must be aware of various hidden costs associated with employment. These can include:
- KiwiSaver contributions: As an employer, you are required to make KiwiSaver contributions for your employees, which are currently set at 3% of their gross salary or wages. This cost can add up over time and should be factored into your employment costs.
- ACC levies: You must also pay ACC (Accident Compensation Corporation) levies to cover the cost of workplace injuries. The amount of the levy depends on the industry and the level of risk associated with the job. This cost can be significant for some industries, particularly those that are high-risk.
- Training and development: You may need to provide training and development opportunities for your employees to ensure they are performing to the best of their abilities. This can include on-the-job training, attending conferences or workshops, or completing online courses.
- Payroll processing software: You may need to use payroll software or engage a payroll service provider to manage your employees’ pay and tax obligations.
- Fringe benefits: Offering additional employee benefits, such as health insurance, wellness programs, or employee assistance programs, can help attract and retain staff.
- Time and resources spent on recruitment: Finding the right candidate for a job can be a time-consuming and costly process. This can include the cost of job advertising, recruitment agencies, and the time spent on interviewing and onboarding new employees.
- Compliance and legal requirements: Employers in New Zealand need to comply with a range of legal and regulatory requirements, including employment agreements, minimum wage laws, health and safety regulations, and employment tax laws. Failing to comply with these requirements can result in penalties and legal costs.
It’s important for employers to be aware of these hidden costs and to factor them into their employment costs when budgeting for new hires.
To put this into perspective, we’ll use a fictional gaming company, Intuit Gaming, as an example.
Intuit Gaming are on the hunt for an Advanced Game Developer to join their team in Auckland. Below is what Intuit Gaming can expect to pay for discretionary, upfront costs.
| Discretionary Costs | |
| Recruitment – costs associated with sourcing suitable candidates, from advertising costs, agency fees and loss of revenue while interviewing | $1,500 |
| Set up and training – from office furniture, to computer hardware/software and internal training and development | $5,000 |
| TOTAL | $6,500 |
Intuit Gaming eventually employed Jessica, an experience game developer based in Auckland.
Jessica is on a gross annual salary of $150,000. She works full-time from Intuit Gaming’s head office in Auckland for 40 hours per week, making her hourly rate $72.12.
As her employer, Intuit Gaming can expect to pay the below in monthly fixed costs to employ Jessica.
| Monthly Fixed Costs | |
| Salary – estimated monthly salary contributions | $12,501 |
| ACC – Accident Compensation Corporation as a monthly cost | $23 |
| Public Liability Insurance – discretionary insurance to protect employers against the financial liability of their employees’ actions. E.g. if your employee damages someone else’s property. | $49 |
| KiwiSaver – a minimum 3% retirement fund contribution is to be made for each employer | $375 |
|
TOTAL True annual cost to employ Jessica |
$12,938 $155,256 |
How can a professional employer organisation (PEO) help reduce the cost of employing skilled workers in New Zealand?
A Professional Employer Organisation (PEO) provides human resources (HR) services to other companies. The primary function of a PEO is to manage various HR-related functions for a client company, including payroll, employee benefits, workers’ compensation insurance, and other HR-related administrative tasks.
When it comes to assisting overseas companies in employing skilled workers in New Zealand, a Professional Employer Organisation such as ANZPEO will become the legal Employer of Record for your skilled workers. This arrangement means you, the client company, is not required to establish a legal entity in the country to employ your workers. ANZPEO handles many of the administrative and regulatory tasks associated with being the legal employer, while you focus on running your business and retain control over the day-to-day activities of your employees.
ANZPEO can help save on the cost of employing skilled workers in New Zealand in several ways:
- Payroll Management: ANZPEO can handle payroll administration, including processing payroll, calculating taxes, and providing payslips. This can reduce the administrative burden on the employer and help ensure compliance with employment laws and regulations, saving time and reducing the risk of penalties and fines.
- Employee Benefits: ANZPEO can offer employee benefits such as health insurance, retirement plans, and vacation pay, which can help attract and retain skilled workers. PEOs can negotiate better rates for benefits due to their economies of scale and can pass on these savings to their clients.
- HR Support: ANZPEO can provide HR support, including assistance with recruitment, onboarding, and employee relations. This can help ensure that the employer is hiring the right people and providing a positive work environment, reducing turnover and associated costs.
- Compliance: ANZPEO can help ensure compliance with employment laws and regulations, such as minimum wage requirements, leave entitlements, and health and safety regulations. This can reduce the risk of fines and legal disputes, saving money in the long run.
