Paid Time Off

New Zealand PTO Compliance: A Guide for Employers

Paid Time Off in New Zealand is governed by the Holidays Act 2003, which sets out minimum entitlements for annual leave, public holidays, sick leave, and other types of leave. Employers must comply with these rules while maintaining clear policies that support a healthy and transparent workplace.

New Zealand pto compliance

Understanding PTO Requirements in New Zealand

Here’s an overview of how leave is structured under New Zealand law.

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Statutory Vacation Days

Employees in New Zealand are entitled to at least four weeks of paid annual leave per year, which becomes available after completing 12 months of continuous employment. Leave accrues based on the employee’s working pattern and is paid at the greater of their ordinary weekly pay or their average weekly earnings. Employees can request to cash in up to one week of annual leave per year, with employer approval.

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Sick Leave Regulations

After six months of continuous employment, employees are entitled to 10 days of paid sick leave per year, which can be used for their own illness or to care for a dependent. Unused sick leave can accumulate up to 20 days. A medical certificate may be required for absences of three or more consecutive days.

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Public Holidays

New Zealand has 11 public holidays, including Waitangi Day, Anzac Day, and Labour Day. Employees are entitled to these days off with pay if they fall on a usual working day. If an employee works on a public holiday, they must be paid at least time and a half, and receive a day in lieu.

PTO Carryover Rules

Employees must generally take their annual leave within 12 months of it becoming due, although employers may allow it to carry over. If leave remains unused for more than a year, employers can require it to be taken with at least 14 days’ notice. Payment for unused leave must be made upon termination of employment.

New Zealand Paid Time Off Overview

Key Considerations For Employees And Employers

New Zealand labor law protects employee leave entitlements while requiring employers to manage time off responsibly.

Employers

  • Provide at least four weeks of annual leave after 12 months of employment
  • Track sick leave accrual and ensure balance limits are respected
  • Compensate for public holiday work with time-and-a-half and time off in lieu
  • Pay out unused leave at termination
  • Pro-rate leave for part-time or irregular workers

Employees

  • Receive four weeks of annual leave after one year of service
  • Accrue 10 days of sick leave per year, up to 20 days
  • Get paid leave on public holidays that fall on working days
  • Can request to cash in up to one week of leave annually
  • Must use leave within 12 months or follow employer guidance

New Zealand’s leave entitlements are defined by the Holidays Act 2003. This content is intended for general information only. Please consult a legal professional for advice specific to your situation.

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Best Practices for Managing PTO in New Zealand

Use these strategies to ensure compliant and effective leave management.

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    Why Compliance Matters

    Following New Zealand’s leave laws is essential for legal compliance and to maintain a positive work environment.

    1

    Keep a Clean Record

    Non-compliance with the Holidays Act can result in penalties, audits, and employee claims. Tracking leave accurately helps your business stay compliant and protects you in case of disputes.

    2

    Employee Satisfaction

    A clear and fair PTO policy ensures employees feel valued and supported. When time off is well-managed, it leads to greater job satisfaction, lower turnover, and improved morale.

    3

    Positive Workspace

    Transparent leave practices contribute to a healthy and respectful workplace culture. Employees who can confidently take the time off they’re entitled to are more focused, engaged, and productive.

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    How TrackingTime Can Help

    Learn more about how we can help you optimize your PTO policies and ensure compliance with New Zealand’s labor laws.

    Effortless Organization

    Say goodbye to messy email chains and manual tracking. With a streamlined PTO management system, you can keep all requests and records in one place, making it easy to approve time off and manage employee schedules efficiently.

    • Quick Approvals – Manage PTO requests fast.
    • Clear Records – Access all time-off data easily.
    • Team Sync – Keep schedules aligned effortlessly.

    Custom Time-Off Policies

    Every company has unique needs, and your PTO policies should reflect that. Customize your time-off rules to match your team’s structure, ensuring fairness and clarity while maintaining flexibility.

    • Flexible Rules – Tailor policies to your team’s needs.
    • Clear Guidelines – Keep everyone informed.
    • Smooth Management – Set rules that work for all.

    Real-Time Transparency

    Give your employees the confidence to plan their time off without uncertainty. By providing real-time access to balances and request statuses, you create a more transparent and trusting workplace.

    • Instant Access – Check balances anytime.
    • Live Updates – Track requests in real time.
    • Boost Trust – Keep everyone informed.

    INTEGRATIONS

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    Sync TrackingTime with the tools your team uses every day to fit their work habits. This way, they can keep track of every minute without switching between apps.

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    FAQ

    Frequently Asked Questions

    Get answers to all your questions about our service and plans.

    How much annual leave are employees entitled to in New Zealand?

    Employees in New Zealand are entitled to a minimum of four weeks of paid annual leave after completing 12 months of continuous employment, as per the Holidays Act 2003.

    Does annual leave in New Zealand include public holidays?

    No. Annual leave is separate from public holidays. If a public holiday falls during annual leave, it does not count as a leave day and must be paid separately.

    Is annual leave mandatory in New Zealand?

    Yes. Employers must provide at least four weeks of paid annual leave per year to eligible employees. This entitlement is protected under national employment law.

    Can leave entitlements be included in salary in New Zealand?

    In general, no. Leave entitlements must be provided separately, but in some cases (e.g. casual workers), holiday pay can be paid as a percentage of regular pay if agreed in writing.

    What law governs annual leave in New Zealand?

    Annual leave in New Zealand is regulated by the Holidays Act 2003, which sets out entitlements for annual leave, sick leave, public holidays, and bereavement leave.

    When do employees start accruing annual leave in New Zealand?

    Employees start accruing annual leave from their first day of employment but become entitled to use their four weeks of paid leave after 12 months of continuous service.

    Can unused annual leave be carried over in New Zealand?

    Yes. Unused annual leave must be carried over unless the employee agrees to cash it out. Up to one week per year may be cashed out with mutual written agreement.

    Are part-time employees eligible for annual leave in New Zealand?

    Yes. Part-time employees are entitled to four weeks of annual leave per year based on their average weekly hours worked, not a prorated number of days.

    Is holiday pay required during annual leave in New Zealand?

    Yes. Holiday pay must be paid based on the greater of ordinary weekly pay or average weekly earnings over the previous 12 months, whichever is higher.

    Do casual workers get paid leave in New Zealand?

    Casual employees typically receive 8% holiday pay added to their hourly wage instead of accruing leave, but this must be clearly stated in their employment agreement.

    Can employers in New Zealand choose when annual leave is taken?

    Yes. Employers can direct employees to take annual leave if a reasonable period of notice is given, typically at least 14 days, and after discussion with the employee.

    Can companies offer more than four weeks of leave in New Zealand?

    Yes. Employers may offer more than the statutory four weeks as part of a negotiated employment agreement or benefit package, especially in competitive industries.

    Should leave policies be written into contracts in New Zealand?

    Yes. Employment agreements in New Zealand must clearly state leave entitlements, accrual, and cash-out options in accordance with the Holidays Act requirements.

    Is annual leave calculated based on calendar year or work anniversary?

    Annual leave is calculated based on the employee’s work anniversary, not the calendar year. Entitlements reset every 12 months from the start date.

    Can employers cancel approved leave in New Zealand?

    Only in exceptional circumstances. Cancellations must be mutually agreed upon or justified by significant business disruption, with proper notice and consultation.