Do I Need a Local Entity to Hire in New Zealand?

In New Zealand, a "local entity" refers to a legally recognized presence that can act as the employer, such as a subsidiary or branch office. This setup allows your company to be recognized locally, fulfilling payroll and employment obligations, which are essential for compliant hiring.

Without a local entity, your company cannot effectively manage payroll, register as an employer, or comply with New Zealand’s employment laws. An alternative is to use an Employer of Record (EOR), which can handle these responsibilities on your behalf.

What is Required to Employ Someone in New Zealand?

• Local employing entity required to directly employ? Usually yes (unless using an EOR)
• Payroll registration required? Yes (you must register with Inland Revenue)
• Withholding/tax remittance required? Yes (PAYE tax must be withheld and remitted)
• Social contributions required? Yes (employer contributions to ACC and KiwiSaver apply)
• Local employment agreement required? Yes (written agreements are mandatory)
• Mandatory benefits to budget? Yes (statutory leave and other entitlements must be provided)
• Works council/collective agreements considerations? Depends (some sectors may have collective agreements)

Best Options If You're Hiring in New Zealand

Can I Hire Contractors Instead of Setting Up an Entity?

Yes, but you should be cautious about the nature of the relationship.

Hiring contractors can be a flexible option, but New Zealand has strict criteria for distinguishing between employees and contractors. If the contractor's work resembles that of an employee, you could face misclassification risks.

• Ensure the contractor operates independently and isn’t integrated into your business.
• Be mindful of how much control you exert over their work.
• Consider the duration and exclusivity of the contract.

How Long Does Entity Setup Take And What Does It Cost?

Typical entity setup timeline: It often takes 4–8 weeks to set up an entity in New Zealand, depending on the type of entity and registrations required.

Ongoing cost categories (entity route):

• Accounting, bookkeeping, and statutory filings: Estimated NZD 500–1,500 per month ($310–$930)
• Payroll provider: Estimated NZD 100–300 per employee per month ($62–$186)
• Employer registrations and recurring compliance: Varies by complexity
• Corporate tax filings and annual reporting: Estimated NZD 1,000–3,000 per year ($620–$1,860)

EOR cost components (no-entity route):

• A per-employee EOR service fee (from $399 p/month with Playroll)
• Pass-through statutory costs (e.g., employer contributions to ACC and KiwiSaver)
• Any optional benefits you choose to provide beyond statutory minimums

How an Employer of Record Can Help You Hire in New Zealand

Hiring in New Zealand can be complex, but it doesn’t have to require setting up a local entity or taking on long-term overhead. With an Employer of Record like Playroll, you get a simple, predictable way to hire compliantly while keeping costs transparent and under control. We help you:

• Hire employees in New Zealand quickly without establishing a local entity, eliminating incorporation costs, ongoing administration, and exit complexity.
• Stay fully compliant with local payroll, tax, and employment regulations with Playroll’s payroll services.
• Control your total employment costs, with a clear monthly EOR service fee (from $399 per employee).
• Focus on growing your business, while we manage contracts, payroll, compliance, and labor law obligations end to end.
• Scale up or exit the market easily, without the financial or legal burden of closing a local entity.