Contractor vs Employee
Compare contractor day-rate to an employee package.
NZ$
Employees get ~6 weeks paid leave + holidays, so 46 worked weeks is typical
%
Equivalent contractor rate
$63.28/hr
That's a 31.6% premium over the employee hourly rate
| Employee weekly value (incl employer KS) | $1,980.77 |
|---|---|
| Equivalent contractor hourly rate | $63.28 |
| Premium needed | 31.6% |
About this calculator
Contractors quote rates that need to cover their own ACC, KiwiSaver, leave, sickness and admin overhead. A rough rule of thumb: contractors need ~25–40% more per worked hour to be financially equivalent to a permanent employee.
- Permanent employees get 4 weeks paid leave, 10 days sick leave, 12 public holidays — about 8 weeks/year not at the desk but paid.
- Employer 3% KiwiSaver, ACC employer levy, and admin add another 5–8% to total cost.
- Contractors handle GST, provisional tax and ACC self-employed levies themselves.
Frequently asked questions
When does a "contractor" become an employee at law?
When the substance of the relationship matches employment — control, integration, intention. Misclassification can lead to back-pay claims.
Related calculators
Calculator NZ provides general information only. For decisions with significant financial, medical or legal consequence please consult a qualified professional.