Remuneration Guide for Employers in New Zealand

Remuneration is the full pay and benefits an employee receives for their work. It’s more than just wages or salary. It can include allowances, KiwiSaver contributions, bonuses, and non-cash benefits like a company car. In New Zealand, understanding remuneration is important for compliance, fairness, and attracting the right talent.

For businesses, remuneration is more than a number on a payslip. It sets the tone for how employees feel about their work, their value in the organisation, and their motivation to stay. Paying below market rates can increase turnover. Paying competitively can help secure top talent in competitive industries like construction, healthcare, and technology. In Auckland especially, the cost of living means employees look closely at what’s included in a remuneration package.

In this guide you’ll learn:

• What remuneration means in New Zealand
• The difference between wages, salary, and total remuneration
• Employer responsibilities and disclosure rules
• How KiwiSaver contributions fit into remuneration
• Tips for setting fair and competitive pay

What Does Remuneration Mean?

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Remuneration means the full reward employees get for the work they do. In New Zealand, this can include:

• Base salary or wages
• Allowances (e.g. travel or tools)
• Overtime payments
• KiwiSaver contributions
• Incentives and bonuses
• Non-cash benefits like vehicles or phones
  
  

When employees ask “what are your remuneration expectations?” they want to know the full package, not just base salary.

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Understanding Total Remuneration in NZ

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When businesses talk about total remuneration, they mean all pay and benefits combined. For example:

• A base salary of $80,000
• Employer KiwiSaver contributions of 3% ($2,400)
• A phone and vehicle allowance worth $5,000
  
  

This would make the total remuneration package worth $87,400.

Employers sometimes offer “total remuneration” contracts, which include KiwiSaver in the quoted amount. It’s important to be clear with employees about whether KiwiSaver is on top of salary or included within it.

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KiwiSaver Contributions and Total Remuneration

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In New Zealand, most employees are enrolled in KiwiSaver. Employers must contribute a minimum of 3% of an employee’s gross pay, unless the employee opts out.

There are two common approaches:

1. On top of base pay: If salary is $60,000, KiwiSaver is an extra $1,800.
2. Total remuneration model: Salary is quoted as $60,000, but $1,800 goes to KiwiSaver, so take-home base pay is lower.
   

Clear communication is key. Confusion about KiwiSaver contributions and total remuneration is one of the most common disputes we see in Auckland workplaces.

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Competitive Remuneration and Pay Reviews

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To keep employees engaged, businesses must offer competitive remuneration. This doesn’t always mean paying the highest in the market, but it does mean:

• Paying fairly compared to industry benchmarks
• Reviewing pay regularly to keep up with cost of living
• Offering benefits that matter, such as flexible hours or professional development

Many New Zealand companies carry out an annual remuneration review. This is often linked to performance reviews or budget cycles.

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Disclosure and Transparency in Remuneration

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Employers in New Zealand must comply with certain disclosure rules:

• Employee remuneration disclosure applies for large companies and some reporting obligations.
• Pay equity laws also encourage transparency to close gender pay gaps.

While not all businesses must publish pay, being open with staff about how pay decisions are made builds trust.

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Base Salary, Annual Remuneration, and Untaxed Pay

• Base salary: The fixed amount before allowances, overtime, or KiwiSaver.
• Annual remuneration: The total received across 12 months, including all benefits.
• Untaxed remuneration: Some benefits, like vouchers or non-cash perks, may need to be declared and taxed separately. Employers should check Inland Revenue rules.

Finding the Right Remuneration for Your Business

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Setting the right remuneration isn’t only about legal compliance. It’s about aligning pay with business goals, industry standards, and employee expectations. The Remuneration Authority sets pay for some public roles, but in the private sector, businesses have flexibility.

The question employers should ask is: does our remuneration package reflect the value of the role and support retention?

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Key Takeaways for Employers

• Remuneration means more than just wages or salary.
• Both wages and salary must meet New Zealand’s minimum remuneration laws.
• KiwiSaver contributions can be on top of or included in total remuneration.
• Pay reviews help keep remuneration competitive and fair.
• Transparency and clear communication reduce disputes and build trust.

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