2025/26 levy year
What does an employee really cost in New Zealand?
Salary is most of it, but not all. Add the 3.5% minimum KiwiSaver employer contribution and the ACC work levy (an average of about $0.63 per $100 of pay), and a $70,000 hire costs about $72,891 a year. Enter a salary to see the full figure, itemised.
What this is based on
- KiwiSaver employer contribution at your chosen rate on gross pay, for an employee who is a KiwiSaver member; the legal minimum is 3% (ird.govt.nz: KiwiSaver for employers). Under Budget 2025 changes the minimum rose to 3.5% on 1 April 2026 and rises to 4% from April 2028, with employees able to apply to stay at 3% (matched by the employer at 3%); verify the rate that applies to your staff on ird.govt.nz. ESCT (employer superannuation contribution tax) is deducted from the contribution, so the employer's cost equals the gross contribution shown.
- ACC work levy at your industry rate per $100 of liable earnings. The default is the 2025/26 average of about $0.63 per $100; actual rates vary sharply by industry classification, from a few cents for office work to several dollars for high-risk sectors, and liable earnings are capped (about $152,790 per employee for 2025/26, verify on acc.co.nz or your levy invoice). A small Working Safer levy (about $0.08 per $100) is collected alongside it and is not itemised separately here.
- Holiday pay: a permanent employee's 4 weeks of annual leave is part of the salary you enter, not an extra cost line. The 8% pay-as-you-go option applies to genuine casual or short fixed-term staff paid holiday pay on top of wages (employment.govt.nz: leave and holidays).
- New Zealand has no general employer payroll tax on wages: no employer National Insurance or social security equivalent. PAYE is withheld from the employee's pay and costs the employer nothing beyond administration.
- Fringe benefit tax (FBT) on non-cash benefits (vehicles, discounted goods, some insurance) is excluded; if you provide such benefits, budget FBT separately (ird.govt.nz: employing staff).
- Figures are for the 2025/26 levy and tax year and are corrected in place when rates change; verify current rates before budgeting.
Employee Cost Calculator NZ is an independent information site operated by Ellul Solutions Ltd. It is not affiliated with Inland Revenue, ACC, Employment New Zealand or any government body, and nothing here is tax, accounting or employment advice. Figures are estimates built on stated assumptions; confirm them with your accountant or payroll provider before budgeting.
True employer cost table, New Zealand 2025/26
Last updated
Salary, the 3% minimum KiwiSaver employer contribution, and the ACC work levy at the 2025/26 average of $0.63 per $100 of liable earnings: the statutory lines of employing a permanent staff member in New Zealand. Benefits, FBT and leave cover excluded.
Computed with the calculator's exact formulas: KiwiSaver at 3.5% of gross salary; ACC work levy at the published 2025/26 average work levy rate of $0.63 per $100 of liable earnings (industry rates vary; earnings capped at $152,790).
| Gross salary | KiwiSaver (3.5%) | ACC work levy (avg) | True annual cost | On-cost |
|---|---|---|---|---|
| $50,000 | $1,750 | $315 | $52,065 | 4.1% |
| $60,000 | $2,450_KIWI60 | $378 | $62,478 | 4.1% |
| $70,000 | $2,450 | $441 | $72,891 | 4.1% |
| $80,000 | $2,800 | $504 | $83,304 | 4.1% |
| $100,000 | $3,500 | $630 | $104,130 | 4.1% |
| $120,000 | $4,200 | $756 | $124,956 | 4.1% |
- Employing someone on $70,000 costs a New Zealand employer about $72,891 a year in 2025/26 at the statutory minimums, a 4.1% on-cost before benefits or overheads.
- New Zealand's statutory employment on-cost (3.5% KiwiSaver plus the average ACC work levy) is about 4.1% of salary, far below the UK's roughly 15% employer National Insurance alone.
- A casual employee paid 8% pay-as-you-go holiday pay costs about 11.6% above the base wage once KiwiSaver and the average ACC levy are added: $78,491 on $70,000 of wages.
Cite this page
“True employer cost table, New Zealand 2025/26”, Employee Cost Calculator NZ, https://employeecostcalculator.co.nz/ (updated 2026-08-14). Computed with the calculator's exact formulas: KiwiSaver at 3.5% of gross salary; ACC work levy at the published 2025/26 average work levy rate of $0.63 per $100 of liable earnings (industry rates vary; earnings capped at $152,790).
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Straight answers
How much does an employee on $70,000 cost a New Zealand employer?
About $72,891 a year in 2025/26: $70,000 salary, $2,450 minimum KiwiSaver employer contribution (3.5%) and roughly $441 of ACC work levy at the average rate of $0.63 per $100. Benefits, FBT and overheads come on top.
Is there a payroll tax in New Zealand?
No general payroll tax on wages. The employer's statutory costs are the KiwiSaver contribution (3.5% minimum) and ACC levies; PAYE is withheld from the employee's own pay. Fringe benefit tax applies only if you provide non-cash benefits.
What percentage should I add to salary for employer costs in NZ?
About 4.1% covers the statutory minimums (3.5% KiwiSaver plus the average ACC work levy). Budget 8–15% once leave cover, equipment and overheads are included, and add 8% holiday pay for genuine casual staff.
When do employers pay 8% holiday pay?
For genuine casual employees, and fixed-term staff on agreements shorter than 12 months, holiday pay can be paid as-you-go at 8% of gross wages on top of each pay, if the employment agreement says so. Permanent staff instead accrue 4 weeks of annual leave inside their salary.
Is the ACC levy the same for every employer?
No. The 2025/26 average work levy is about $0.63 per $100 of liable earnings, but your rate is set by your industry classification and claims history: office-based businesses pay far less, construction and forestry far more. Use the rate on your ACC invoice in the calculator.
Is the KiwiSaver employer minimum still 3%?
3% is the legal minimum this calculator defaults to, but the minimum rose from 3% to 3.5% on 1 April 2026 and rises to 4% from April 2028, with employees able to apply to remain at 3%. Verify the current rate on ird.govt.nz before setting pay.
Hiring in New Zealand? Know the full number first.
Salary, KiwiSaver, ACC and holiday pay, itemised in ten seconds.
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