Published: April 2026
New Zealand is often the first international expansion for Australian companies. The time zones work, the culture is familiar, and the talent pool is strong. But when it comes to actually employing people there, many Australian founders assume the process is more complicated than it really is.
Setting up a New Zealand subsidiary is relatively inexpensive and usually completed in four to six weeks. Once established, you can employ your New Zealand team directly instead of paying ongoing management fees to a third-party Employer of Record provider.
This guide walks through the practical steps, updated for April 2026 with the latest KiwiSaver, ACC, and minimum wage changes that took effect on 1 April 2026.
Australian companies typically reach this decision for a few reasons.
Cost reduction. If you are using an Employer of Record provider, you are likely paying around $599 USD per employee per month in management fees alone. At current exchange rates, that is approximately $950 to $1,000 NZD per employee per month. For a team of five to ten people, total monthly provider fees commonly land between $8,000 and $15,000 NZD, or $100,000 to $180,000 NZD annually in fees before counting salaries. Direct employment eliminates these ongoing costs.
Operational control. When payroll issues occur with an EOR, you are dependent on their support queue. Salary adjustments may not be applied correctly. Invoices may include unexpected charges. Support responses can take days or weeks. With direct employment, you control the payroll process and can address issues immediately.
Employee security and retention. When employees are contracted directly to your entity rather than through a third-party provider, they feel more secure. Your team members receive payslips from your company, their employment agreement is with you, and they know exactly who their employer is. Direct employment signals commitment. For senior hires especially, this matters.
Here is what the process typically involves.
Estimated time: 1 to 2 weeks
New Zealand company incorporation is done online through the Companies Office. The government fees are $10 plus GST for name reservation and $118.74 plus GST for incorporation, for a total of approximately $148 NZD including GST. The process typically takes one to two weeks.
A common approach is for the Australian parent company to hold 100% of the shares in the New Zealand subsidiary. There is no restriction on foreign ownership and no minimum capital requirement. Most companies issue between 1 and 100 shares at $1 NZD each.
For directors, you have options. Under the trans-Tasman director exemption, an Australian resident who is already a director of an Australian company can serve as a director of a New Zealand company. Many Australian founders may qualify under this rule, though you should confirm your eligibility for your specific circumstances.
You will need to choose a company name (which can be reserved for 20 working days), a registered office address, and a share structure.
Estimated time: 1 week
Once your company is incorporated, you register with Inland Revenue (IRD) as an employer. This enables you to withhold PAYE (Pay As You Earn) tax from employee wages and remit it to IRD.
You may also need to register for GST depending on your expected turnover. The GST registration threshold is $60,000 NZD annual turnover. If your New Zealand subsidiary only employs staff and does not generate local revenue, GST registration may not be immediately necessary.
The IRD registration process is done online and typically completed within a few days. For foreign-owned entities, IRD may conduct additional customer due diligence, which can extend this timeframe.
Estimated time: 1 week
KiwiSaver is New Zealand's workplace retirement savings scheme, similar in concept to Australian superannuation but with some important differences.
As of 1 April 2026, the minimum employer contribution rate increased from 3% to 3.5% of gross pay. This is the first of two planned increases: a further increase to 4% takes effect from 1 April 2028. Both changes were confirmed in Budget 2025.
Unlike Australian superannuation, KiwiSaver is voluntary for employees. They can choose to opt out. However, new eligible employees are automatically enrolled, and if they remain enrolled, you must make employer contributions.
Employees can choose their own contribution rate (3.5%, 4%, 6%, 8%, or 10%) and their own KiwiSaver provider. Employees can also apply to IRD for a temporary rate reduction back to 3% for a period of 3 to 12 months. If an employee opts for this temporary reduction, you as the employer can choose to match their reduced rate or continue contributing at 3.5%.
As an employer, you deduct the employee's contribution from their wages and remit it along with your employer contribution to IRD, which then distributes the funds to the employee's chosen provider.
From 1 April 2026, employers must also make KiwiSaver contributions for eligible employees aged 16 and 17, a change from the previous threshold of 18.
Estimated time: 1 week
ACC (Accident Compensation Corporation) is New Zealand's no-fault accident insurance scheme. All employers must pay ACC levies.
There are two components relevant to payroll.
Employer levy. Covers work-related injuries. The rate depends on your industry classification and is typically between 0.5% and 2% of liable earnings.
Earner levy. Covers non-work injuries. This is deducted from employee wages. As of 1 April 2026, the earner levy increased to $1.75 per $100 of liable earnings (inclusive of GST), up from $1.67. The maximum liable earnings cap is $156,641 NZD for 2026/27.
You register for ACC as part of your employer registration process. Levies are calculated based on your payroll and invoiced by ACC.
Estimated time: 1 to 3 weeks
You need a way to pay your New Zealand employees in New Zealand dollars.
The most direct approach is to open a New Zealand bank account in the name of your subsidiary. New Zealand banks require standard AML (anti-money laundering) checks, which can sometimes be completed remotely if you have an existing Australian banking relationship with an institution that operates in both countries. For foreign-owned entities, banking setup can occasionally take longer due to enhanced due diligence requirements.
Alternatively, if your Australian company already holds a NZD account, you could potentially use that temporarily while the subsidiary's banking is established. This is not ideal as a long-term solution, but it can bridge the gap during setup.
Estimated time: 1 to 2 weeks
Your New Zealand team members need to become employees of the new subsidiary. This means issuing new employment agreements under the New Zealand entity.
New Zealand employment law differs from Australian law in several ways. Key differences include:
If you are transitioning existing staff from an EOR, the process is usually straightforward. The employee resigns from the EOR arrangement and signs a new contract with your subsidiary. Continuity of employment can often be maintained for the purposes of leave entitlements and tenure.
This transition is often welcomed by employees. Moving from a third-party provider to direct employment gives them greater security and a clearer sense of belonging. Standard employment agreement templates are available from Business.govt.nz and can be adapted for your needs. For senior or complex roles, you may want a New Zealand employment lawyer to review the contracts.
Your New Zealand subsidiary will need to file annual financial statements and a tax return (IR4) with IRD. It will also need to file an annual return with the Companies Office (currently $49.74 plus GST).
This does not require a full-time accountant relationship. Most small subsidiaries engage a New Zealand accountant on an annual basis to prepare the financial statements, complete the tax return, and handle the Companies Office filing.
For a straightforward payroll-only subsidiary, annual accounting fees typically range from $2,000 to $5,000 NZD.
Transfer pricing becomes relevant when your Australian and New Zealand entities transact with each other. For example, if your Australian company charges the New Zealand subsidiary for shared services like software development or management time, or vice versa.
The general principle is that these charges should be at arm's length, meaning what an unrelated party would charge for similar services.
For most small to medium businesses, a simple documented approach can work, but we recommend obtaining assurance from a qualified tax professional before finalising your structure. They can confirm your approach is appropriate and defensible for tax authorities in both countries.
The key is to get the structure reviewed before you start and document your reasoning. A proportionate approach might involve having a specialist review your proposed structure and provide written confirmation that the methodology is sound. You can refine the details as your New Zealand operations grow.
Timeline (total elapsed time: 4 to 6 weeks)
Costs
If you are currently paying $8,000 to $15,000 NZD per month in EOR fees, the setup costs can pay for themselves within the first few months.
Which entity structure should I use?
A common approach for Australian companies is a standard New Zealand limited company with the Australian parent as sole shareholder. This is the simplest option and provides liability protection. More complex structures involving limited partnerships or look-through companies are less common for employment subsidiaries, but may suit specific circumstances. We recommend discussing your options with a professional advisor.
Do I need a New Zealand accountant from day one?
You do not typically need an accountant for the setup process itself. You need one for annual compliance once the financial year ends. Some companies engage an accountant early to have a local contact, but it is not strictly necessary until you need to file your first return.
What happens to existing employee entitlements?
If your staff are transitioning from an EOR, their leave balances and tenure should generally transfer to the new employer. The specifics depend on your employment agreements and how the transition is structured, but continuity is usually preserved.
Do I need to visit New Zealand?
Most of the setup process can be completed remotely. Some banks may require an in-person visit for account opening, though this varies by institution. If you have team members already in New Zealand, they can sometimes assist with local requirements.
Once the subsidiary is set up, the ongoing work is comparable to what you already manage in Australia. Run payroll each pay cycle. Submit PAYE and KiwiSaver contributions to IRD. File employer returns. Pay ACC levies when invoiced.
If you already have a finance team or external bookkeeper managing your Australian payroll, adding New Zealand is incremental rather than transformative. The systems and processes are similar. Use our employee cost calculator to model the full cost of your New Zealand team under direct employment.
The difference is that you now control the process. When something needs to change, you change it. When an employee has a question about their pay, you answer it directly instead of escalating to a third-party provider. And your team knows they work for you, not for an intermediary.
How much does it cost to set up a New Zealand subsidiary in 2026?
The government incorporation fee is approximately $148 NZD including GST ($10 plus GST for name reservation and $118.74 plus GST for incorporation). If you use a service provider to coordinate the setup, including IRD registration, KiwiSaver, ACC, and employment contracts, expect to pay $3,000 to $10,000 NZD depending on complexity. Annual accounting fees for ongoing compliance range from $2,000 to $5,000 NZD.
How long does it take to set up a New Zealand company from Australia?
The full setup process typically takes four to six weeks from decision to first payroll. Incorporation itself takes one to two weeks. The remaining time covers tax registration, banking, and employment contract transitions.
Can an Australian company own 100% of a New Zealand subsidiary?
Yes. There are no restrictions on foreign ownership of New Zealand companies. An Australian parent company can hold 100% of the shares in a New Zealand subsidiary. This is a common structure for Australian businesses expanding across the Tasman.
Do I need a New Zealand resident director for my subsidiary?
Not necessarily. Under trans-Tasman director rules, an Australian resident who is already a director of an Australian company can serve as a director of a New Zealand company without needing a local New Zealand director. However, eligibility should be confirmed for your specific circumstances.
What is the difference between KiwiSaver and Australian superannuation?
Both are workplace retirement savings schemes, but KiwiSaver is voluntary for employees (they can opt out) while Australian super is compulsory. As of 1 April 2026, the minimum employer contribution for KiwiSaver is 3.5%, rising to 4% from April 2028. Contributions are paid to IRD, which distributes them to individual provider funds chosen by employees. Unlike Australian super, employees can apply for temporary rate reductions back to 3%.
What are ACC levies in New Zealand?
ACC levies fund New Zealand's no-fault accident compensation scheme. Employers pay an employer levy (typically 0.5% to 2% of liable earnings depending on industry) to cover work-related injuries. An earner levy is also deducted from employee wages. As of 1 April 2026, the earner levy is $1.75 per $100 of liable earnings (inclusive of GST), with maximum liable earnings capped at $156,641 NZD.
Do I need to register for GST in New Zealand?
GST registration is required when annual turnover exceeds $60,000 NZD. If your New Zealand subsidiary only employs staff and does not generate revenue from New Zealand customers, GST registration may not be required. We recommend confirming your specific situation with a tax advisor.
What is the minimum wage in New Zealand in 2026?
As of 1 April 2026, the adult minimum wage is $23.95 NZD per hour. The starting-out and training minimum wage is $19.16 per hour (80% of the adult rate). Minimum wage rates are reviewed annually by the government.
What professional advice should I get when setting up a NZ subsidiary?
We recommend obtaining professional advice from a qualified tax specialist on your entity structure, particularly around transfer pricing if your Australian and New Zealand entities will transact with each other. This provides assurance that your arrangements are appropriate and defensible. The operational setup (incorporation, payroll, KiwiSaver, ACC) can often be handled by a service provider without requiring ongoing legal or tax advice.
Why do employees prefer being employed directly rather than through an EOR?
Employees contracted directly to your entity typically feel more secure than those employed through a third-party provider. Direct employment means their payslips come from your company, their employment agreement is with you, and they have a clear sense of who their employer is. This signals commitment and helps with retention, particularly for senior hires who want job security and a real connection to the business.
How does Scale Suite help with NZ subsidiary setup?
Scale Suite manages the finance operations for Australian businesses, including those with New Zealand subsidiaries. Our embedded finance team can handle your Australian payroll, bookkeeping, and reporting while you set up the New Zealand side. If you are weighing the costs of an EOR against direct employment, we can help you model the numbers.
Scale Suite is a Sydney-based provider of outsourced finance teams and fractional CFO services for Australian SMEs. We deliver weekly bookkeeping, payroll, BAS/IAS lodgement, cashflow reporting, management accounts, and strategic fractional CFO oversight, all as a fully embedded team that works inside your business.
CA-qualified, Xero Certified, and registered BAS Agents, we replace fragmented bookkeepers and once-a-year accountants with one responsive finance function at a fraction of the cost of full-time hires. We serve growing businesses across Sydney, Melbourne, Brisbane, and Perth, with packages starting from $1,500 per month and no lock-in contracts.
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We review and check this guide periodically. At the time of writing (April 2026), all information was current. Scale Suite is a registered BAS Agent, not a licensed tax advisor or financial advisor. This content is general information only and does not constitute professional tax, financial, or legal advice. Some details may change over time.
Scale Suite is a Sydney-based provider of outsourced finance and HR services for Australian SMEs. We deliver bookkeeping, financial reporting, payroll processing, fractional CFO support, recruitment, employee onboarding, people and culture support, and fractional HR oversight, all as a fully embedded team that works inside your business.
Employment Hero Gold Partner, CA-qualified, and Xero Certified, we replace fragmented finance and HR processes with one responsive, senior-level function at a fraction of the cost of full-time hires. We serve growing businesses across Sydney, Melbourne, Brisbane, and Perth, with packages starting from $1,500 per month and no lock-in contracts.
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