NEW ZEALAND Law and Practice Contributed by: Fiona Ashby, Luke Bowers, Daniel Erickson, Jessica Phillips, Natalie Foster, Shelley Slade-Gully, Tina Liu and Theresa Le Bas, Tompkins Wake
Collective Redundancies Where collective redundancies are required, employ - ers must consult in good faith with employees and, where applicable, their union representatives. This includes: • providing affected employees with details of any proposal that may impact the continuation of their employment; • proactively sharing relevant information; • giving employees the opportunity to respond to the proposal; and • genuinely considering employee feedback before finalising decisions. There is no fixed statutory redundancy payment in New Zealand; entitlements will depend on what is agreed in the employment agreement or any applica - ble collective agreement. 4.5 Employee Representations Union Representation Union membership is voluntary, but unions are required for negotiating collective agreements, and the right to strike is protected in specific conditions, particularly during collective bargaining. Employers must bargain in good faith with unions that have ini - tiated bargaining on behalf of their members in the workplace. The Employment Relations Act 2000 sets out detailed requirements for collective bargaining. Good faith obligations apply regardless of whether or not there is formal union representation in the work - place.
erally straightforward, with relatively low rates and a focus on transparency. Individuals are taxed on a pro - gressive scale depending on their annual income, with rates for 2026–2027 set to: • 10.5% on income up to NZD15,600; • 17.5% on income from NZD15,601 to NZD53,500; • 30% on income from NZD53,501 to NZD78,100; • 33% on income from NZD78,101 to NZD180,000; and • 39% on income above NZD180,000. Residents are taxed on their worldwide income, while non-residents are only taxed on New Zealand-sourced income. Employer Payroll Obligations Employers in New Zealand use the Pay as You Earn (PAYE) payroll tax system, with responsibilities includ - ing: • deducting PAYE from employees’ pay; • making KiwiSaver contributions for eligible employ - ees; • paying Accident Compensation Corporation (ACC) levies for workplace injury coverage; and • making other deductions such as student loan repayments or child support if required by the IRD. Fringe Benefit Tax (FBT) is levied on non-cash benefits provided to employees, such as company vehicles or subsidised loans. 5.2 Taxes Applicable to Businesses Corporate Income Tax A company is treated as tax-resident in New Zealand if it is incorporated there, or if its head office, cen - tre of management or director control is located in New Zealand. Resident companies are taxed on their worldwide income, while non-resident companies are taxed only on income sourced from New Zealand. The corporate income tax rate is 28% on taxable income. New Zealand operates a full imputation system, which allows companies to attach tax credits to dividends paid to shareholders, reducing or eliminating double taxation of corporate profits.
5. Tax Law 5.1 Taxes Applicable to Employees/ Employers
The authors are grateful to Murray Brewer, Alejandro Ces and Simon Taylor of Grant Thornton for review - ing and providing expert input on the tax sections of this chapter. Income Tax and PAYE New Zealand’s tax system is overseen by the Inland Revenue Department (IRD), which administers tax laws and ensures compliance. The tax regime is gen -
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