Hiring your first employee: a checklist for NZ tradies

Taking on your first worker is a big step. It can free you up to quote, run jobs and grow, but it also brings new costs and legal duties. This checklist covers what to sort out before, during and after you hire.

Can you afford it?

A worker costs more than their hourly rate. Before you hire, add up:

• Wages, including paid holidays, public holidays and sick leave
• Your KiwiSaver contributions
• ACC levies
• Tools, gear, uniforms and safety equipment
• Vehicle and fuel if they travel
• Time spent training and supervising, especially in the first months

Then check the work is there. A steady pipeline of booked jobs is safer than hiring for one busy month. When you price jobs after hiring, include these costs. See how to work out your hourly charge-out rate.

Employee or contractor?

This matters. An employee works for you, under your direction, usually on set hours, with your tools. A contractor runs their own business, controls how the work is done and invoices you. Calling someone a contractor does not make them one. If the relationship looks like employment, the law treats it as employment. If you are unsure, get advice before you start. See also working with subcontractors.

Before the offer

• Check the person is legally allowed to work in New Zealand.
• Decide the role, hours, pay rate and where they will work.
• If you plan to use a 90-day trial period, tell them before the offer, and check the current rules on who can use one.
• Check references, and any licences or tickets the job needs.

The written employment agreement

In New Zealand you must give every employee a written employment agreement. It should include:

• Names of you and the employee
• A description of the work
• Where they will work and the hours
• The pay rate and how they will be paid
• Holidays and leave
• A trial period clause, if you are using one
• How problems will be resolved

Give them time to read it and get advice, and have it signed before they start. Keep a copy. Free templates and an agreement builder are available from Employment New Zealand.

Set up payroll

• If this is your first employee, register as an employer with Inland Revenue.
• Have the employee complete a tax code declaration.
• Deduct PAYE and other deductions each pay, and file and pay them to Inland Revenue on time.
• Enrol the employee in KiwiSaver if they are eligible, and pay your employer contribution.
• Keep wage, time and holiday records. You are required to keep these.

Payroll software can do most of this for you and is worth it from the first employee.

Health and safety

As an employer you have duties to keep your workers safe. Before their first day:

• Walk them through the hazards on your typical jobs and how you control them
• Provide the right safety gear and check they know how to use it
• Show them how to report incidents and near misses
• Check they hold any tickets needed for the plant or tools they will use

See how to keep a simple hazard register and how to run a toolbox talk.

The first week

• Pair them with you on site so they learn your way of working
• Explain your standards for finish, tidiness and dealing with clients
• Show them how you record time and materials
• Check in at the end of each day for the first week

A good start makes a big difference to how long people stay.

Keeping good staff

Hiring is expensive, so keeping a good worker matters. Pay fairly and on time, every time. Give clear feedback, both when work is good and when it needs fixing. Teach them new skills as they are ready, and tell them where the business is heading. Many good tradespeople leave because they feel stuck or unappreciated, not because of money. A short chat over lunch once a week about how things are going costs nothing and catches problems early.

Quick checklist

• Costs added up and work booked in
• Employee, not contractor, confirmed
• Right to work checked
• Written agreement signed before day one
• Registered as an employer, PAYE and KiwiSaver set up
• Records kept for wages, time and leave
• Safety induction done