Information For New Zealand Migrants: Salaries / Wages in New Zealand

New Zealand salaries and wages are not high by international standards:

The Employment Relations Act legislation that was enacted in 2000 superceded the Employment Contracts Act which was considered to be both radical and innovative in terms of labour law. The new E.R. Act governs the employment of all workers in New Zealand, however there are a number of other statutes which also impact on conditions of employment.

The Employment Relations Act introduced the concept of "good faith bargaining", unions as the only allowed bargaining agents for collective contracts and one or two other changes of limited scope.

By law employment contracts must contain a number of key clauses. These include:

• a procedure for personal grievances
• a disputes procedure
• a term, with an expiry date for collective agreements
• wages, hours of work, holidays, sick leave entitlements.

The Law sets the minimum for annual leave, sick leave, statutory holidays, minimum wages etc., it is up to the employee to negotiate better conditions than the minimum.

Sex, marital status, religion, age, disabilities cannot be discriminated against, and strict laws enforce this.

Taxation In New Zealand:

Personal Income Tax Rates

Are in a state of flux! Until October 2008 the rates were as per the table below but these changed (went down) on 1 October. The incoing Government has also said by Christmas 2008 their additional personal tax cut programme will be enacted so watch this space.

Company Tax Rates

Company tax is levied at 30%. Not surprisingly those self employed that can register as companies do.

All worldwide income is taxable whether your funds/capital and investments are held in New Zealand or elsewhere. There are penalties for those not declaring offshore income if the Tax Department catches you. However where New Zealand has a double tax agreement you will receive a tax credit on the tax paid at source and you will not pay tax a second time on it in New Zealand.

New Zealand operates a consumption tax on all goods and services consumed here. Called the Goods and Services tax it is levied on everything (except private house sales and financial services) at a rate of 12.5 %.

There are also a raft of less significant taxes such as fringe benefit, entertainment and ACC which we will not detail here. There is no capital gains tax.

Suffice it to say that Mr. and Mrs. Average New Zealander pay around 28% of their income in either direct or indirect taxes. This is much lower than in most other developed countries.

To have a net income of $30000.00 per year means a gross household income of around $45 000.00. Here is a list of occupations and what they might expect to earn per annum in New Zeland dollars.

Median base salaries for those in the same job with the Same Employer in Year to Sept 1 2003

NEW ZEALAND PAY TRENDS: A Snapshot of 2007:

Note: Selected positions only - full survey covers 398 job titles.
Base salary increase is the increase for all people in the position for the full twelve months.

The 2008 Hays Salary Survey, detailing typical salaries for a range of sectors, was released Monday, 2nd June 2008.

The survey, which covers 11 employment sectors and hundreds of job roles across New Zealand, reports the majority of employers reported increases in salaries of between 3 and 6 percent.

This reaffirms the solid base upon which Australasia's business strength is built, says Jason Walker, Regional Director of Hays in New Zealand. Steady jobs growth is still the dominant feature of Australasias recruitment market and there are plenty of examples of significant salary increases that testify to its ongoing strength. In fact, 50% of respondents expect permanent staffing levels to increase while only 4% see any decrease over the coming 12 months.

The slow-down in the banking and related sectors is very contained; as yet we have seen no evidence of any negative impact across the broader job market. In fact, the number of new jobs registered remains at record levels, the demand for specialist skills is up, and were doing more overseas campaigning for talent than ever before.

The level of infrastructure investment also shows no sign of abating across New Zealand, causing further continued pressure on candidate sourcing and salaries and affirming the strength of New Zealands recruitment market.

Logically, the highest salary increases over the year have occurred for roles where the need for candidates is highest, said Jason.

Notable trends by industry:

• 38% of construction, property and engineering employers increased salaries above 6%.
• 39% of mining and resources employers increased salaries above 6%.
• 45% of professional services employers increased salaries above 6%.

New Zealand salary hotspots:

• Accountancy & Finance:
  The notable salary increases occurred for Financial Controllers (for example for turnover up to $50m the typical salaries increased in Auckland from $100,000 to $110,000 and in Christchurch/Wellington from $85,000 to $90,000) and for Management Accountants in Auckland (for example increasing from $90,000 to $100,000 for turnover > $150m). Within the profession, business services increased strongly in Christchurch/Wellington. For example the typical salaries increased from $40,000 to $48,000 for Business Services Graduates with 2-3 years experience, and for Business Services Seniors with 6+ years experience from $75,000 to $82,000. In Auckland IT Audit Graduate increases were notable, increasing from $50,000 to $55,000 for those with 2-3 years experience.
   
• Banking:
  While many banking employers focused on improving company benefits, work environments and performance based bonuses, rather than increasing salaries, there were exceptions. The primary exceptions occurred in Auckland, for Senior Para Planners (qualified) where typical salaries increased from $58,000 to $65,000, for corporate and commercial lending professionals and funds management staff.
   
• Construction & Property:
  New Zealand received notable Architecture increases. For example the maximum of the salary ranges rose for an Interior Designer with 5-10 years experience from $75,000 to $90,000 in Auckland and $60,000 to $80,000 in Christchurch/Wellington. New Zealand also experienced strong construction civil increases. For example, the maximums rose for experienced Contracts Administrators/Quantity Surveyors in Auckland from $110,000 to $120,000 and in Christchurch/Wellington from $90,000 to $100,000.
   
• Contact Centres:
  In New Zealand, many employers have increased salary packages for Customer Service Representatives by between 4 and 6 percent - an increase that was probably overdue from last year. The greatest increases have been in the area of collections / credit which has seen 5 to 9 percent increase across all sectors.
   
• Human Resources:
  Some areas have experienced significant salary increases over the past 12 months, for example HR Directors, where the typical salaries increased in Auckland from $175,000 to $180,000.
   
• Information Technology:
  While salaries have not increased for every role in every location, there have been several instances of significant increases. For example, within development Test Analysts rose from $60,000 to $66,000 in Wellington and Application Support Analysts rose from $50,000 to $60,000 in Auckland. Within infrastructure, typical salaries increased from $70,000 to $80,000 for an Auckland UNIX Engineer and from $75,000 to $78,000 for a Wellington Systems Engineer. The notable business increase occurred for Auckland Business Development Managers ($95,000 to $110,000).
   
• Insurance:
  Geographically Auckland experienced the stronger increases. For example, within general insurance claims typical salaries increased in Auckland by 9.5 percent. Auckland also received strong broking increases. For example, typical salaries increased for an Auckland Account Executive from $70,000 to $75,000. Also notable were workers compensation increases in Auckland. For example, the typical salaries increased from $70,000 to $75,000 for Injury Management Specialists in Auckland.
   
• Legal:
  Auckland has seen an increase in highly attractive relocation packages and incentive schemes to attract international applicants. With more companies electing to bring legal counsel inhouse rather than relying solely on a panel of legal firms, there have been some notable salary increases. For example, for Legal Counsel with 5 years PAE the maximum of the salary range increased in New Zealand from $92,000 to $130,000.
   
• Office Support:
  Geographically, Christchurch/Wellington offered the strongest increases overall. For example, the typical salaries increased for a Personal/Team Assistant from $44,000 to $50,000 in Christchurch/Wellington. Other increases of note occurred within legal and banking & finance support in Auckland and Christchurch/Wellington and for Document Controllers in Auckland and Christchurch/Wellington.
   
• Oil & Gas:
  Geologists received higher salaries because of limited candidate supply. For example, the maximum of the salary ranges increased at the entry-level in New Zealand to $90,000, at the Intermediate level to $150,000 and at the Senior level to $230,000.
   
• Resources & Mining:
  Despite the markets strength, the rapid rise in salaries seen across all areas of the mining, engineering and construction markets over recent years has reached a plateau. There were however some exceptions, such as in metalliferous geology where the maximum of the salary range increased for an Exploration Manager in New Zealand from $100,000 to $140,000. Within metalliferous mining engineering Mining Engineers were a stand-out, with the maximum of the salary range rising from $90,000 to $100,000.

The 2008 Hays Salary Survey can be downloaded from www.hays.net.nz/salary.