Is Your Work for Accommodation and Pay in New Zealand a Fair Deal?
Having an accommodation-provided job is a great way to avoid the stress of finding accommodation for the duration of your employment. Accommodation is usually conveniently located close to your work and shared with co-workers. However, some employers may blur the lines on whether your accommodation and wage deal is fair or not and complies with the New Zealand employment laws. For this reason, we have put together this guide to your rights when working for accommodation and pay in New Zealand. The important thing to remember is that the value of your work for accommodation and pay should be at least the value of minimum wage in New Zealand.
Once you’ve wised up to your rights for accommodation-provided jobs in New Zealand, take a look at our work for accommodation and pay listings on our job board!
A Quick Introduction to Accommodation Provided Jobs in New Zealand
Some paid jobs in New Zealand have accommodation provided. This can mean a number of different things, either you are paid a full wage but are offered discounted accommodation in your employer’s chosen accommodation, accommodation is provided with the accommodation cost deducted from your wages, or accommodation is provided for free. If it is unclear on the job listing how the accommodation is provided, then be sure to ask the questions before taking the job offer. It is common practice for some jobs to have accommodation included, especially in New Zealand’s hospitality industry and farming industries.
How you are offered the accommodation as part of your job must be agreed by you in writing, usually via an employment agreement or another similar contract. Be aware that the accommodation and wage offered cannot be equal to below the minimum wage. The minimum wage in New Zealand is NZ$18.90. We’ll more into details on wages in the article below.
Do You Need a Visa to Work for Accommodation Provided Jobs in New Zealand?
To work for payment and/or accommodation in New Zealand you will need a valid work visa. The most common visa people get while travelling in New Zealand is a working holiday visa. However, any other work visa is usually valid too. The work conditions are made very clear when you receive your visa.
For more information on the working holiday visa, see What is a Working Holiday Visa?
Can You Work for Accommodation on a Visitor Visa?
If you are in New Zealand on a visitor visa, you cannot legally work for payment and/or accommodation. See Visitor Visa: Do You Need a Visa to Visit New Zealand? for more details.
What are Your Rights to Working for Accommodation and Pay?
The Choice of Accommodation and Pay or Pay Only
Before you start working with your employer, you must be offered a choice of either work in exchange for accommodation and pay or the choice to be paid at least minimum wage. Under New Zealand law, you are entitled to a full wage with only 5% deduction for lodging for your labour, unless you and your host have both agreed on a fair contract. See more about that in the section below.
Deducting Accommodation Costs from Pay
The value of the accommodation should not be lower than the value of your work at the minimum wage. The minimum wage in New Zealand is NZ$18.90 per hour. So for example, if you work for accommodation for two hours per day at a minimum wage of NZ$18.90, your reward must be of a minimum value of NZ$35.40 for accommodation.
Employment Trial Periods
Employers in New Zealand can voluntarily give employees a trial period of up to 90 days, only if it has been agreed in writing in the employment agreement. (See the section below about employment agreements). If you are dismissed during this period you cant raise a personal grievance (official complaint) on the grounds that you think the dismissal was unjustified. You can, however, raise a personal grievance on other grounds, such as discrimination, harassment or unjustified action by the employer.
Minimum Wage in New Zealand
The minimum wage in New Zealand is reviewed every year. This is the minimum pay before tax. As of 2020, it is NZ$18.90 an hour. This also applies to piece rates which is the money paid to an employee per fruit picked or garments produced, for example. Even if you are paid by the piece, you should still not get paid less than the minimum wage.
Rest and Meal Breaks at Work
You are entitled to rest and meal breaks on which you can rest and take care of personal matters. There are no specific rules about the length and time of breaks. The common practice in New Zealand is a 30-minute unpaid meal break and 10-15-minute paid rest breaks after every four hours worked, for example. These rest and meal break duration and frequency should be outlined in your employment agreement.
Holidays: Getting Paid When Taking Time Off Work
You get holiday pay of 8% of your gross earnings at the end of your employment, minus any holiday pay you received during your employment. A similar deal is given to those on a fixed-term agreement (working for just the winter season, or picking season, for example) and for irregular and intermittent work, where it may be agreed to add 8% holiday pay to the gross weekly earnings.
You are entitled to the relevant or average daily pay on a public holiday if you would usually be working on that day. Some jobs will require you to work on a public holiday, in which case you should be paid at least time-and-a-half (1.5 times your hourly rate) for the time worked that day.
Sick Leave in New Zealand
Five days of sick pay is entitled only after six months working for one employer. You will get paid the relevant or average daily pay for sick leave.
For a more in-depth look into these rights, see New Zealand Working Holiday Employment Rights.
Do You Need a Contract to Work for Accommodation and Pay?
For any paid work in New Zealand, there must be an employment agreement. That way, you know what you are getting yourself in for and reduce the risk of misunderstandings. A number of minimum conditions will be outlined in the agreement, but even if they are not outlined, some conditions must still be met. These conditions are discussed in this article and in-depth on the Employment New Zealand website. Employers must keep a copy of the agreement to which you can get copies on request.
Accommodation and Work Contract
When accommodation is provided with the work, there must be a section of the employment agreement dedicated to the accommodation agreement or a separate contract. When referring to accommodation, the contract will likely say “lodging”. Lodging is another word for “accommodation”.
The contract must display that you have the option to either work for lodging and pay or be paid a stated wage. The contract must also state how many average hours you will be expected to work. For example, your work for accommodation contract could include a section like this:
The first two hours of work each day are to be compensated by: (Check your chosen option)
Lodging: Private room (valued at NZ$40) or an Hourly Wage of NZ$18.90.
Do You Need to Pay Taxes When Doing Accommodation Included Jobs?
When you are proposed a wage in New Zealand, keep in mind that the wage is usually before deductions, such as income tax. The tax deduction is known as PAYE (Pay As You Earn). How much you earn determines how much is deducted. You can find out more about that in New Zealand Work Tax System: Work and Pay Your Taxes!
Fill out the Tax Code Declaration (IR330) form given to you by your employer to make sure the correct tax deductions are made. You will need an IRD number for this (find out how to get an IRD Number here).
A small portion of this deduction is the ACC (Accident Compensation Corporation) levy, which is an insurance system covering the costs if you are injured and off work for an extended period.
The PAYE tax is required by law so the employer does not need your consent for these deductions, however, your written consent is needed for any other deductions made to your wage.
You will not need to pay an income tax on your accommodation – you only pay tax on paid wages. However, your employer will need to pay a tax on the value of the accommodation.