How to Hire Casual Employees

What is Casual Employment?

Casual employment in New Zealand is characterized by:

• No guaranteed hours of work
• Work is offered on an "as needed" basis
• Employee can accept or decline work offers
• No ongoing commitment from either party

Before You Hire Someone (Sole Traders)

If you're a sole trader hiring your first employee, you need to register as an employer with Inland Revenue before you pay your first employee.

How to Register as an Employer with IRD

1. Log in to myIR (or call IRD on 0800 377 772)
2. Select "Register for something new"
3. Choose "Employer"
4. Provide your business details:
   • Business name and address
   • Contact details
   • Expected date of first wage payment
   • Number of employees you expect to hire
5. IRD will assign you an Employer Number

What You'll Need

• Your IRD number
• Business bank account details
• Expected payroll start date

IRD Registration (For Existing Employers)

If you're already an employer, you'll need to:

1. Get each new employee's IRD number
2. Get their tax code (usually M for main job)
3. Confirm their KiwiSaver status
4. Check for student loan deductions

Required Documents from Employee

• IRD number (from their tax summary or payslip)
• Tax code declaration (IR330 form)
• KiwiSaver opt-in/out form (if applicable)
• Student loan deduction form (if applicable)
• Bank account details for payment

Employment Contract Requirements

You must provide a written employment agreement before work begins. For casual employees, this must include:

Mandatory Clauses

• Type of employment: Casual/variable hours
• Job description: What tasks they'll perform
• Pay rate: Must be at least minimum wage ($23.15/hr as of 2025)
• Holiday pay: Either accrued (8%) or paid as you go
• Notice period: How much notice to give/receive
• Trial period: Up to 90 days (if applicable)

Additional Recommended Clauses

• Confidentiality agreement
• Health and safety responsibilities
• Dress code or uniform requirements
• Use of company equipment

Tax Codes & PAYE

As an employer, you must deduct PAYE (Pay As You Earn) tax from employee wages and pay it to IRD.

Common Tax Codes for Casual Staff

KiwiSaver Obligations

As an employer, you must:

• Automatically enroll new employees (unless exempt)
• Contribute 3% of gross wages (employer contribution)
• Deduct 3%, 4%, 6%, 8%, or 10% from wages (employee contribution)
• Pay contributions to IRD by the 20th of each month

Who is Exempt from KiwiSaver?

• Under 18 years old
• Over 65 years old (unless they opt-in)
• On a work visa (temporary resident)
• Students on a student visa
• Already opted out of KiwiSaver (within first 8 weeks)

KiwiSaver Timeline

1. Day 1: Auto-enroll eligible employees
2. Within 7 days: Send KS2 form to IRD
3. 2-8 weeks: Employee can opt-out
4. Monthly: Pay contributions to IRD

Holiday Pay for Casual Employees

Casual employees are entitled to 4 weeks annual leave (8% of gross earnings). You have two options:

Option 1: Pay-As-You-Go (Recommended for Casuals)

• Add 8% holiday pay to each payslip
• Clearly labeled as "Holiday Pay"
• Employee doesn't accrue leave balance
• Simpler for irregular hours

Option 2: Accrual Method

• Employee accrues 8% as leave balance
• Can request paid time off
• Must pay out accrued leave on termination
• More complex for casuals

Ongoing Employer Obligations

Once you've hired your casual employee, you need to maintain these responsibilities:

Monthly

• Pay wages on time (agreed pay day)
• Provide payslips (within 2 days of pay)
• File employer monthly schedule to IRD (by 20th)
• Pay PAYE, ACC, and KiwiSaver to IRD (by 20th)

Annually

• File annual employer return (IR348)
• Provide employees with annual pay summary
• Review and update employment agreements
• Renew ACC levy (rates may change)

As Needed

• Update IRD if employee details change
• Process final pay when employment ends
• Provide proof of income if requested
• Maintain employment records for 7 years

Quick Checklist: Hiring Your First Casual Employee