Your Quick Guide to New Zealand Employment
Not sure where to begin with the paperwork parts of your first job? Here are the basics!
Starting your first job is an exciting milestone. Along with earning your own money, though, there are a few practical things you need to understand about being employed.
Here’s a quick guide to some of the most important things to know.
The IRD (Inland Revenue Department)
The Inland Revenue Department, or IRD, is the government department responsible for running New Zealand’s tax system.
When you earn money from a job, your employer takes out tax from your pay before you receive it. This is called PAYE, or Pay As You Earn. PAYE includes income tax and the ACC earners’ levy.
Everyone pays taxes to the government on their income. These taxes pay for public service things such as fixing roads, funding schools, and paying for healthcare when you go to hospital.
What are tax codes and why do they matter?
Your tax code tells your employer how much tax to deduct from your pay.
The tax code you need depends on your circumstances, including whether you have one job, or multiple sources of income, and even if you have a student loan.
When you start a job, you’ll need to complete a Tax code declaration (IR330) and give it to your employer.
You can figure out your tax code here.
Getting your tax code right matters because choosing the wrong one could mean you don’t pay enough tax throughout the year and end up owing more tax later. Or, you might pay too much!
Keep in mind that you might need to update your tax code if your circumstances change, such as if you get a second job, or take out a student loan.
Your IRD number
An IRD number is your unique tax identification number. You keep the same IRD number for life, and you’ll need it for things like earning income, opening a bank account and joining KiwiSaver (more on that shortly).
You can check if you already have an IRD number here.
Or you can learn more about IRD numbers here.
How to set up a myIR account
myIR is Inland Revenue’s online service. It’s your online account for dealing with IRD.
It’s a good idea to set up your account early, as you can use it to manage your tax information, check messages from Inland Revenue, and deal with various tax-related tasks online.
You can now create a personal myIR account even if you don’t yet have an IRD number, and use it to apply for one.
To register, you’ll need your name, email address and phone number. You’ll also create a user ID, password and set up two-step verification.
If you already have an IRD number, you can link it to your myIR account.
KiwiSaver
KiwiSaver is New Zealand’s voluntary retirement savings scheme. If you’re eligible and are automatically enrolled when you start a new job, contributions will be deducted from your pay.
And the best part? Your employer will also contribute to your retirement savings through KiwiSaver.
The default employee and matching employer contribution rate is currently 3.5%. That will go up to 4% on 1 April 2028.
That means that 3.5% of your pay will automatically go to your KiwiSaver account.
This is one of the reasons why the money you receive from your employer might be lower than you expected – because some is taken out for taxes, and some is taken out for KiwiSaver.
But don’t worry, it’s still your money. You’ll just get access to it when you retire (although there are rare special circumstances that allow you to access it sooner).
Employment contracts: What to look for (and avoid!)
Before you start working, your employer must give you a written employment agreement. You should have the opportunity to read it and get advice or support before signing.
Your employment agreement should set out important details such as:
- Your job and what you’ll be expected to do
- Where you’ll work
- Your hours or expected working times
- Your pay rate or salary and how you’ll be paid
- Your holiday and leave entitlements
- Any relevant notice periods
- Any trial or probationary period
- Other terms and conditions that apply to your employment
Take the time to actually read the agreement before signing it. If there’s something you don’t understand, ask about it (we’re always happy to help!).
Watch out for trial periods
You might see a trial period mentioned in a contract.
If an employer uses a trial period, it must be agreed to in writing and included in the employment agreement before you start work. Trial periods can be no longer than 90 calendar days and have specific rules around when they can be used. You must also be paid during a trial period.
If someone tells you to “work for free for a few days so we can see if you’re any good”, that’s not the same thing as a lawful trial period. Make sure you understand exactly what you’re agreeing to before you start.
Know your basic employment rights
Starting your first job doesn’t mean starting from zero when it comes to workplace rights. New Zealand employees have minimum legal rights covering areas such as pay, breaks, holidays and leave, workplace safety and employment agreements.
It’s worth knowing what you’re entitled to so you can ensure you’re receiving it from the start.
Your first pay: What should you expect?
Your first pay can look quite different from the hourly rate or salary you were quoted.
For example, if you’re paid $25 an hour, you shouldn’t expect $25 for every hour you worked to appear in your bank account. Your gross pay is the amount you’ve earned before deductions. Your net or take-home pay is what remains after deductions such as PAYE and, where applicable, KiwiSaver and student loan repayments.
When your first pay arrives, it’s a good habit to check that:
- You’ve been paid for the hours you worked
- Your hourly rate or salary matches your agreement
- Your tax deductions look reasonable
- Any KiwiSaver or other deductions are what you expected
- The amount you’ve received matches the pay period you were expecting.
If something doesn’t look right, ask your employer about it. It’s much easier to sort out a mistake early than to let it build up over several pay periods. And worst case scenario, you’ll learn to better understand your payslip so you know what to look for in future.
Many first jobs start right here at ITC – with qualifications
For many young Kiwis, ITC is the place to go after high school but before the workplace.
We don’t just provide our students with an education and valuable qualifications in travel and tourism, but also the support you need to find your way into the workforce. That includes a dedicated Employment Consultant, who can help with everything from finding jobs, to creating a CV, to job interview tips, to helping you read over your first work contract.
Contact us here with any questions!
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