Guide

The true cost of an employee in New Zealand (2026/27)

Updated 2026-08-15

New Zealand's statutory on-cost is one of the lowest in the OECD: about 4.2% at the minimums. The real cost of a hire sits in the lines the statutes do not mention.

Talk to a specialist Salary, KiwiSaver, ACC and holiday pay, itemised in ten seconds.

The statutory lines

KiwiSaver employer contribution: 3.5% of gross pay for KiwiSaver members, the minimum in force since 1 April 2026: $2,450 on a $70,000 salary. See the KiwiSaver guide.
ACC work levy: $0.69 per $100 of pay at the 2026/27 average, $483 at $70,000, but industry-rated: see the ACC guide.
Nothing else: No employer payroll tax, no employer social security, no mandatory health insurance. PAYE and the employee's ACC earners' levy come out of the employee's pay, not yours.

The costs behind the statutory line

Leave cover: 4 weeks (20 working days) of annual holidays plus up to 10 paid sick days a year, before public holidays (employment.govt.nz). That is at least 30 of roughly 260 paid working days, and covering it is a real cost in small teams.
Casual and fixed-term staff: genuine casuals are paid 8% holiday pay on top of wages as pay-as-you-go (employment.govt.nz), which the calculator's casual toggle adds.
Equipment and software: $1,000–$3,500 a year for a desk worker is a typical 2026 budget once laptop, licences and support are annualised; varies by role.
Recruitment: agency fees in the low tens of percent of first-year salary, amortised over tenure, are often the largest hidden line; typical quotes vary by sector.

Worked example: $70,000 hire

$70,000 salary, 3.5% KiwiSaver, average ACC rate (calculator formulas)
Line	Annual cost
Gross salary	$70,000
KiwiSaver employer contribution (3.5%)	$2,450
ACC work levy ($0.69 per $100)	$483
Statutory total	$72,933
+ equipment, insurance, overheads (typical)	$2,000–$4,000
Realistic first-year total	$74,900–$76,900

What that means per hour

Divide the true cost by hours actually worked, not contracted hours. A full-time employee on a 40-hour week is paid for about 2,080 hours but, after 4 weeks of leave and public holidays, works closer to 1,840.

Cost per hour, statutory total over a 40-hour week (2026/27)
Salary	True annual cost	Per paid hour (2,080)	Per worked hour (approx. 1,840)
$50,000	$52,095	$25.05	$28.31
$70,000	$72,933	$35.06	$39.64
$100,000	$104,190	$50.09	$56.63

Use the calculator for your own numbers; it itemises each statutory line and takes your actual ACC rate and KiwiSaver percentage.

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Questions, answered directly

How much does an employee on $70,000 really cost in NZ?

About $72,933 a year at the 2026/27 statutory minimums: $70,000 salary, $2,450 KiwiSaver at 3.5% and $483 of ACC work levy at the average rate. Equipment, insurance and overheads typically take a realistic first-year total to $74,900 or more.

What is the on-cost percentage for NZ employers?

About 4.2% of salary at the statutory minimums (3.5% KiwiSaver plus the 2026/27 average ACC work levy), among the lowest of comparable countries. Budget 8–15% once leave cover, equipment and overheads are included, and more for casual staff paid 8% holiday pay.

Sources

Hiring in New Zealand? Know the full number first.

Salary, KiwiSaver, ACC and holiday pay, itemised in ten seconds.

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