Am I a contractor or an employee in New Zealand?

It depends on what your working life actually looks like, not on what the contract calls you. Since 21 February 2026 there are two steps. First, the new "gateway test" asks whether the paperwork and the working terms tick five boxes. If every box is ticked, you are a contractor. If even one is missed, the older "common law" tests apply, and those look at the real relationship.

This matters because the label changes your rights. Employees get paid holidays, sick leave, the minimum wage and the ability to raise a personal grievance. Contractors generally do not. Some people are told they are contractors when they are really employees, and they lose out without knowing it.

The basics

• The gateway test applies from 21 February 2026. It is not retrospective. If your arrangement started before that date, the common law test covers the earlier period, and both tests apply from that date on. (You may see this called the 2025 test. It came in through the Employment Relations Amendment Act 2026 and took effect in February 2026.)
• The gateway test has five criteria, and all must be met. The written agreement says you are an independent contractor or not an employee. You can work for others, though not at the same time as working for the other party. You can choose when to work or subcontract the work. You can turn down extra work without the arrangement ending. You had a reasonable chance to get independent advice before signing.
• If any one criterion fails, the common law test decides. The Employment Court and the Employment Relations Authority look at four things, and no single one settles it:
• Intention: what both sides meant, usually shown in the agreement. It does not decide the matter alone.
• Control and independence: who decides when, how and where the work is done.
• Integration: whether your work is a core, ongoing part of their business or a separate project.
• Economic reality: whether you run your own business, carry financial risk, can make a profit, and have other clients.
• Employees must have a written employment agreement, at least the minimum wage, 4 weeks of annual holidays after 12 months of continuous employment, 10 days of paid sick leave a year for eligible employees, and at least time-and-a-half for working a public holiday.
• Contractors are generally not covered by the Employment Relations Act, cannot bring a personal grievance, and do not get paid holidays or a guaranteed minimum wage unless the contract says so.
• Health and safety law covers both.

Tax and ACC: what changes

Employees have PAYE and the ACC earners' levy taken out of their pay by the employer. Employers also pay the KiwiSaver employer contribution, and employees can get the KiwiSaver subsidy.

Contractors look after themselves. You tell Inland Revenue you are in business, file an IR3 each year, and pay provisional tax and end-of-year tax. You must register for GST if your turnover was over $60,000 in the last 12 months or will be over $60,000 in the next 12 months. Some contractor payments have tax withheld at source (called schedular payments). Check the current withholding rates on the Inland Revenue page listed in Sources.

Self-employed people and contractors are billed for ACC levies directly, after Inland Revenue passes on their tax return details. The amount depends on your income and your type of work, so it can come as a surprise in your second year of business. Ask ACC for your current figure rather than guessing.

How it plays out: Aroha the delivery driver

Aroha signed an agreement in March 2026 that says she is an "independent contractor". She drives a van the company owns, in their uniform, on routes they set, five days a week. She cannot send someone else, and she is told she cannot take on other courier work. Her invoices are a flat $1,200 a week.

• Gateway test: The agreement names her a contractor, but she cannot subcontract, and she cannot freely work for others. Criteria are missed, so the gateway test does not protect the label.
• Control: The company sets routes, hours and uniform. That points to employee.
• Integration: Deliveries are the core of the business. That points to employee.
• Economic reality: She has no tools of her own, no other clients and no chance of profit beyond the weekly rate. That points to employee.
• Likely result: A real chance she is an employee, whatever the agreement says.
• What it could be worth (illustration only): Four weeks of annual holidays at $1,200 a week is $4,800 a year she may not have been paid. Add sick leave, public holiday pay and the KiwiSaver contributions she missed.

The catch

• A signed contractor agreement is not the end of it. If the gateway test is met, you are a contractor. If it is not, the label is only one piece of evidence.
• Meeting the gateway test depends on facts, not just words. A clause saying you can subcontract means little if the company would never accept a substitute.
• Switching status is not automatic. Being an employee means the employer should have been deducting PAYE, so a change can affect your tax too. Talk to Inland Revenue if you match most employee signs but are not on PAYE.
• Deadlines apply. To raise a personal grievance you generally have 90 days from the issue arising, or from when it came to your attention. For a dismissal, that runs from the end of employment. Employment New Zealand does not list a time limit for the status question itself, so ask them early.
• Leave law is changing. The Employment Leave Act starts on 6 August 2028. Until then, today's rules apply.
• Costs. Early resolution and mediation are free. Applying to the Employment Relations Authority has application fees.
• You can be both. Inland Revenue says each job is assessed separately.

Do this next if you think you are really an employee

1. Find your agreement. Note the start date. Was it before or after 21 February 2026?
2. Write down how the work really happens: who sets hours, routes and methods, whose tools you use, whether you can send a substitute, and whether you can take other clients.
3. Compare that against the five gateway criteria. If any is missed, the common law test applies.
4. Gather invoices, messages, rosters and any uniform or rules the business gave you.
5. Call Employment New Zealand on 0800 20 90 20 for guidance and free early resolution.
6. If that does not work, ask for mediation. The Employment Relations Authority is the last step.
7. If your job ended, remember the 90 day window for a personal grievance.
8. Talk to Inland Revenue if tax is involved.

Common questions

Can I just ask my boss to change me to an employee?

Yes. Many people sort it out this way. Ask in writing, and keep the reply.

Can I be a contractor for one client and an employee for another?

Yes. Each arrangement is judged on its own.

Does the gateway test protect employers who get it wrong?

Only if all five criteria are really met. If one is not, the real-relationship tests apply.

Do contractors get any protection at all?

Yes. Health and safety law applies, and general civil law covers contract disputes.

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Last reviewed 21 October 2026. Written by Streetwise from the official pages listed above. General information only, not legal or financial advice.