Guide
What must be in a final pay in New Zealand
Updated
Final pay is not a discretionary payment. Employment New Zealand sets out exactly what an employer must include and when it must arrive.
The five things an employer must pay
Employment New Zealand states that the employer must pay: to the end of the notice period if the employee gave the right amount of notice; for all hours worked since the last pay until the end of employment; for all annual holidays, public holidays and alternative holidays owed; and any additional lump sum or other payments owing under the employment agreement or negotiated as part of a leaving package (Employment NZ: final pay).
When it has to be paid
The final pay must be paid on or before the pay day of the final pay period. Employment New Zealand notes that this might be after the employee's last day of work, so a payment that arrives on the normal payday is not late.
Notice, worked or not
- If the employee gave the right amount of notice, the employer must pay them to the end of the notice period.
- The employer can ask the employee not to work the notice, but only if the employee agrees or the agreement allows payment instead of working it. Either way the full notice period is paid.
- If the employee asks to leave early and the employer agrees to waive part of the notice, only the part actually worked is paid.
- If the employee gives less notice than the agreement requires, the employer only has to pay for the days actually worked.
There is no statutory notice period in New Zealand
Unlike Australia or Ireland, New Zealand sets no statutory minimum notice by length of service. The notice period is whatever the employment agreement says. Where the agreement is silent, Employment New Zealand says fair and reasonable notice must be given, and that depending on the role, 2 to 4 weeks is often seen as fair and reasonable (Employment NZ: giving notice).
If the final pay is wrong
Employment New Zealand states that an employee who does not receive everything they are owed may have a claim for unpaid wages or holiday pay, or another breach of their employment agreement, and points to the Labour Inspectorate. Ask your employer for the calculation first: most disputes are about which rate was used for annual holidays, and that is a question with a documented answer.
Deductions still apply. Employers can only deduct what the law allows or what you have agreed to in writing, so check any deduction that appears on a final payslip for the first time.