Free calculator
What does an employee really cost you?
The salary in their agreement is the part you see. KiwiSaver, ACC levies, four weeks of holidays and sick leave all sit behind it. Put in your numbers and see the full annual cost — and what each hour you actually get is really costing you.
New Zealand rates checked October 2026. Free, no sign-up, nothing you type is saved or sent anywhere. General guidance only — not payroll or tax advice.
Your numbers
Leave it at 0.69 — the 2026/27 national average — if you're not sure. Your actual rate is set by your industry classification and is usually lower for office work, higher for trades and construction.
The costs people forget
True annual cost
$72,583
About $1,396 a week, 4% more than the pay itself.
Costs beyond their pay
$2,583
KiwiSaver, ACC, cover and extras.
Hours you actually get
1,784 hrs
You pay for 2,080 hours a year.
Cost per hour worked
$41
Total cost ÷ hours actually worked.
Where the money goes
- Annual salary$70,000
Their pay before tax — the number on the employment agreement.
- Employer KiwiSaver (3%)$2,100
The legal minimum is 3% of gross earnings. Each extra 1% you offer costs about $700 a year.
- ACC work levy ($0.69 per $100)$483
ACC charges this on $70,000 of liable earnings. Your own rate is set by your industry classification — check it in MyACC.
- Total per year$72,583
You also deduct the ACC earners' levy — about $1,064 a year at $1.52 per $100 — from their pay and send it to ACC. It isn't extra cost to you, but it is your admin, and getting it wrong is a bill you have to fix.
The time you don't get back
Four weeks of holidays, 12 public holidays and 5 sick days add up to 37 working days a year when you're paying them and no work is happening. That's roughly $9,962 of pay buying you nothing — before you pay anyone to cover the gap.
It's why a $70,000 employee can quietly cost the equivalent of $41 an hour of real work. If you're pricing jobs off wages alone, that's the number to price from.
Plain English
What's in the number, and what each bit is
KiwiSaver — at least 3%, from day one
If your employee is a contributing member, you must pay at least 3% of their gross earnings into their KiwiSaver. Gross earnings means everything you pay them — salary, holiday pay, allowances and bonuses — not just base pay. Employees choose 3, 4, 6, 8 or 10% of their own pay; your 3% is on top. Plenty of NZ employers now match 4–6% because it's the cheapest way to hold onto good people.
KiwiSaver for employersACC — two levies, only one is yours
The work levy is your cost, charged at a rate set by your industry classification — the national average for 2026/27 is $0.69 per $100 of wages. The earners' levy ($1.52 per $100) comes out of your employee's pay, and you pass it on. ACC also charges on a minimum of $50,501 and a maximum of $156,641 of earnings per employee, so a part-timer earning less than the minimum is still levied as if they earned it. If you're GST-registered, the GST on your ACC invoice comes back as input tax.
How ACC levies workHolidays — four weeks, not two
Every employee gets at least four weeks of paid annual holidays after 12 months of continuous work, and you can't give less even if the agreement says so. Paying holidays as 8% on top of each payslip (pay-as-you-go) is only allowed if their agreement is under 12 months or their work is genuinely irregular. Get this wrong and the arrears land on you, often years later.
Managing annual holidaysSick leave — 10 paid days a year
Eligible employees get 10 days of paid sick leave each year, usable for themselves, a partner or a dependant. It's a day-12-months entitlement like holidays, and it's separate from your four weeks — so an employee who never takes a holiday still doesn't owe you those days back.
Sick leave entitlementsPublic holidays — 12 a year
Twelve national public holidays (Matariki included) plus your provincial anniversary day. If someone works one, they get an alternative day or paid time-and-a-half — a real cost over a long weekend or Christmas. Plan rostering and pricing around them, not after the invoice.
Public holidays and anniversary datesComing in 2028 — leave rules change
The Employment Leave Act 2026 replaces the Holidays Act from 6 August 2028. Leave will accrue in hours from day one against standard hours, and additional or casual hours attract a 12.5% upfront leave payment instead of accrual. If you employ casuals or irregular hours today, model it now — the way you price those hours will need to change.
Holidays Act reformWhat this leaves out: your own time recruiting and managing, overtime, the cost of a bad hire, training beyond onboarding, and the space, tools and insurance a second pair of hands needs. Treat this as a planning number, not a payroll run — check your own agreements, industry ACC classification and payroll settings with your accountant or payroll provider before you commit. See our disclaimer.
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