Working in New Zealand

Salary and working hours

It’s usually quite easy to determine the salary you should command in New Zealand, as wages and salaries are normally quoted in job advertisements.

There’s a marked difference between salaries in the major cities of Auckland and Wellington and in the rest of the country, where they’re often up to 20 per cent lower. This reflects not only the fact that living costs are higher in these cities, but the tendency for jobs there to carry more responsibility (i.e. stress).

New Zealand employers can be rather coy when quoting salary figures, using terms such as ‘salary to’. For example, ‘salary to $55,000’ usually means you’re highly unlikely to receive $55,000 – the employer is probably thinking in terms of paying $40,000 (he just wants to attract as much interest as possible).

The term ‘negotiable’ is frequently used in job advertisements, e.g. ‘salary $55,000 negotiable’, which means that you will need to work hard to convince the employer that you’re worth $55,000! However, if you have qualifications or skills that are in short supply, you may be able to negotiate an even higher salary. For example, the wool industry was thrown into turmoil when shearers began flocking to Australia in their hundreds in search of higher pay, and the Shearing Contractors’ Organisation was forced to raise pay rates by 20 per cent.

A national minimum wage applies in New Zealand, which is currently $9.50 per hour (from 21st March 2005). This doesn’t, however, apply to those under 18, to whom the ‘youth minimum wage’ of $7.60 per hour applies.

A recent survey carried out by Statistics New Zealand revealed that some 40,000 adult employees received less than the legal minimum wage but that most (over 1 million) earned at least 30 per cent more than the legal minimum wage.

The average hourly wage in 2004 was $20.25. The lowest average wages in 2004 were earned by hotel and restaurant staff ($13.15 per hour), wages in the retail sector were $14.24 per hour, while the construction industry paid an average of $17.90 per hour. Not surprisingly, the highest wages ($28.49 per hour) were in the financial and insurance sectors. However, as few wages in New Zealand are negotiated on a collective basis, there’s often a huge variation in pay in different industries and areas.

Executive and professional salaries are typically lower than in other developed countries such as Australia, France, Germany, Japan, the UK and the USA, although a lower cost of living, particularly housing, compensates. The average salary for top company bosses is around $250,000.

Executive salaries are often subject to much greater annual rises (e.g. 10 to 12 per cent) than average wages, which are usually around just 2 per cent annually. New Zealand's employers don’t traditionally shower executives with fringe benefits on top of their basic salary package, but may offer certain benefits to lure an outstanding applicant. Nevertheless, company cars are widespread at executive level, as are health insurance benefits (around 55 per cent) and superannuation or pension schemes (around 60 per cent).

Productivity bonuses and profit sharing may also be offered. Relocation costs and contributions towards housing expenses are usually offered only to employees with particularly rare skills (but it’s worth asking).

Working hours

There aren’t any standard working hours in New Zealand. Traditionally, the working week has been 40 hours, commencing at 8.30am and finishing at 5pm, Mondays to Fridays, with a half-hour break for lunch. However, since the Employment Contracts Act took effect, employers and employees have been free to set the length of their working week and their start and finish times.

The majority of employees still work around 38 or 40 hours over five days a week, although some companies (mainly larger organisations and manufacturing companies) have introduced different working patterns in agreement with their employees. Some large factories, for example, work four ten-hour shifts spread over seven days. Generally, workers in New Zealand expect to have Saturdays and Sundays off, although this is changing as more organisations (particularly service industries) operate at weekends.

Overtime

Overtime is traditionally paid at a rate of ‘time and a half’, although in many industries it has effectively been abolished, as employers have agreed with employees (or have insisted) that they take time off in lieu of overtime.

This article is an extract from Living and Working in New Zealand. Click here to get a copy now.

Further reading

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