View all calculators
New Zealand business tool

Employee Cost vs Contractor Calculator NZ

Estimate the real cost of employing someone in New Zealand, including salary, leave, KiwiSaver, and overheads. Compare this with contractor or outsourcing costs to make better hiring decisions.

NZ-focused estimate. Not financial advice.

Employee cost vs contractor estimate

Model the annual employer cost of a hire, then compare it with contractor or outsourcing options.

Live toolNZD
Employee cost includes base wages or salary, employer KiwiSaver, ACC work levy, paid leave or holiday pay, and any overhead you enter. Use hourly mode to see what a $23.95, $25, or $26 wage really costs the employer per week and per paid hour.
Employee inputs
Full-time uses standard paid leave assumptions.
Hourly mode is best for minimum-wage and rostered roles.
Adult minimum wage is $23.95/hour from 1 April 2026.
Use fewer weeks for seasonal or intermittent roles.
Choose no if the employer does not have to make KiwiSaver contributions.
IRD minimum/default KiwiSaver rate from 1 April 2026 is 3.5%.
ACC average Work levy for 2026/27 is 0.69%. Actual rate varies by industry/classification.
Only include costs you know or want to test.
This labels the optional extra cost; it does not guess an amount.
Contractor inputs
Outsourcing input
Optional. Leave as 0 if you only want employee vs contractor.
Employee cost per week$0.00$0.00 per paid hour
Contractor cost per week$0.00$0.00 per hour
Employee annual cost$0.00Full-time employee
Contractor annual cost$0.00Based on booked weeks
Outsourcing cost$0.00Annualized from monthly cost
True employee hourly costEmployer cost per paid hour
Annual cost comparison
Employee total cost$0.00
Contractor total cost$0.00
Outsourcing total cost$0.00
Employee
Contractor
Outsourcing

Leave method: full-time and regular part-time employees use paid leave assumptions for 4 weeks annual leave, 10 sick days, and 12 public holidays. Casual mode uses an 8% pay-as-you-go annual holiday loading where that arrangement is valid.

No productivity assumption: the main hourly result is based on paid hours only. It does not guess training time, mistakes, meetings, or staff performance.

ACC method: default Work levy uses ACC's 2026/27 average rate of 0.69% of liable earnings. Replace it with your business classification rate if you know it.

KiwiSaver method: employer KiwiSaver is included only when the employee is in KiwiSaver and the employer contribution applies. If the employee has opted out or is not eligible, choose that option to show $0.

Employee type note: permanent part-time employees generally have the same minimum employment rights as permanent full-time employees, scaled to their work pattern. Casual employees can have different leave handling, but casual status alone does not remove minimum rights.

Decision insight

Costs are similar. Consider flexibility, control, risk, and long-term strategy.

What the results mean

Employee weekly cost

  • wages or salary for the hours entered
  • employer KiwiSaver if it applies
  • ACC Work levy estimate
  • leave or holiday pay loading
  • extra known employer costs you add

Employee type

  • full-time uses regular hours and paid leave assumptions
  • part-time scales the same model to fewer hours or weeks
  • casual uses an 8% holiday pay loading where that arrangement is valid

Contractor cost

  • uses hourly rate x hours x weeks
  • does not add employee leave or KiwiSaver
  • shows weekly and annual booked cost

Outsourcing cost

  • optional monthly amount
  • converted to annual cost
  • use it for agency, payroll, bookkeeping, or outsourced service quotes

How to read the calculator

Cost per paid hour is the cleanest hourly employer number. It divides total employee cost by the paid hours entered. It does not guess productivity, mistakes, meetings, or training time.

Employee cost per week is useful for roster planning. For hourly workers, it is based on the weekly hours you enter plus the employer costs that apply. For salary mode, it spreads the annual cost across 52 weeks.

ACC Work levy defaults to the 2026/27 average Work levy of 0.69%. ACC varies by industry, so replace this if you know your classification rate.

KiwiSaver is included only when the employee is in KiwiSaver and employer contributions apply. If the employee has opted out or is not eligible, choose that option and the employer KiwiSaver cost becomes zero.

When to use each input

Use hourly wage for minimum wage, retail, hospitality, support, admin, and rostered roles. Use annual salary for salaried positions where the employer thinks in yearly cost first.

Use extra annual employer costs only for costs you can estimate, such as recruitment, training, payroll/admin, equipment, tools, or uniforms. The calculator does not invent these costs for you.

For worker take-home comparisons, use the Contractor vs Employee Calculator. For salary withholding detail, try the PAYE Calculator. For contractor tax planning, use the Self-Employed Tax Calculator.

Disclaimer

This calculator provides estimates only. Actual employment costs vary based on contracts, industry, and business structure. For accurate advice, consult a professional.