Wages and Deductions

At Employee First NZ, we empower employees with expert employment advocacy to ensure you receive fair wages and understand your rights regarding deductions. Our state-of-the-art AI assistance is available anytime, anywhere, providing tailored preliminary advice to help you navigate wage-related issues and protect your workplace entitlements.

What Does The Law Say?

Wages

Under New Zealand law, wages are payments for time worked, typically calculated hourly. The Minimum Wage Act 1983 mandates that all employees aged 16 and over must be paid at least the minimum wage—$23.50 per hour for adults, or $18.80 for starting-out workers or trainees (effective 1 April 2025). If your employment agreement specifies a higher rate, that rate applies. Wages can also include penal rates for specific tasks, shifts, or overtime, as agreed in your employment contract. Other payment types, such as salaries, commissions, or piece rates (e.g., payment per item produced, like bins of fruit picked), must ensure the total earnings per hour worked meet or exceed the minimum wage. Employers must pay wages in money (NZ banknotes, coins, or bank deposit) unless you agree in writing to alternatives like cheques.

Deductions

New Zealand employment law, including the Wages Protection Act 1983, strictly regulates deductions from wages. Deductions are only permitted in specific cases:

• Legally Required: For taxes (PAYE), student loans, child support, or court-directed payments.

• Employee Consent: For agreed purposes like accommodation or loan repayments, provided they are reasonable and documented in writing.

• Overpayments: For specific circumstances like unapproved absences, with prompt notification and within 2 months, or for one-off errors with written consent. Deductions must be reasonable and related to measurable losses, and employers must consult you beforehand, even with a general deductions clause. It’s illegal to deduct wages for poor performance, customer theft, or breaches of the employment agreement unless specific conditions are met.

• Charging premiums or fees for employment is prohibited, and KiwiSaver contributions must be paid on top of the minimum wage, not included in it.

What Are Your Rights?

As an employee in New Zealand, you have clear rights regarding wages and deductions to ensure fair treatment:

• Minimum Wage Entitlement: You are entitled to at least the adult minimum wage of $23.50 per hour (as of 1 April 2025) unless you're a starting-out worker or trainee ($18.80 per hour). If your employment agreement specifies a higher rate, you must be paid that amount.

• Payment Methods: Wages must be paid in money (NZ banknotes, coins, or bank deposit) unless you agree otherwise in writing. Employers cannot control how, when, or where you spend your pay.

• Penal Rates and Allowances: You may be entitled to extra payments for working specific shifts, overtime, or job-related expenses (e.g., travel or uniforms), as negotiated in your employment agreement.

• Lawful Deductions: Deductions are only allowed for:

  • Legal requirements (e.g., PAYE tax, student loans, child support).

  • Purposes you’ve agreed to in writing, such as accommodation or loan repayments, provided they are reasonable.

  • Overpayments in specific cases (e.g., absence without agreement), with prompt notification and consultation.

• Protection from Unlawful Deductions: Employers cannot deduct wages for poor performance, customer theft, or failure to work notice unless agreed in writing and based on actual loss. Charging premiums or fees for employment is illegal.

• KiwiSaver and Superannuation: Employer contributions to KiwiSaver must be paid on top of the minimum wage and cannot be included in wage calculations.

• Transparency: You have the right to check your payslips to ensure your hourly rate, salary, or piece rate meets the minimum wage and that deductions are lawful and agreed upon.

If you suspect your wages are below the minimum or deductions are unfair, you have the right to raise concerns with your employer or seek professional advocacy to protect your entitlements.

How Employee First NZ Can Assist You

At Employee First NZ, we’re dedicated to supporting employees across New Zealand with expert employment advocacy. Our state-of-the-art AI assistance, available 24/7, offers immediate, tailored preliminary advice to help you understand your wage entitlements and address unlawful deductions. Whether you’re navigating complex payslips, penal rates, or employer oversteps, our experts can provide you with clear guidance to ensure your rights are upheld.

Our services go beyond advice—we generate leads to connect you with our expert team for personalised support. While our AI offers initial insights, our experienced advocates step in to assist with negotiations or disputes, ensuring you receive fair pay and are not subject to unlawful deductions. With Employee First NZ, you gain peace of mind knowing your workplace rights are protected, anytime, anywhere.