How we calculate pay rates for the Accredited Employer Work Visa (AEWV)

At the job check we look at the proposed employment agreement and the information given in the application form to calculate the employee's hourly rate.

Calculating pay rates

To determine the pay rate we calculate how much the employee will be paid an hour. At the job check this will be based on the proposed employment agreement and the information provided in the application form.

For employment to be assessed as meeting a minimum pay threshold, the average guaranteed pay for each hour of work within a pay period, including any paid leave, must be at or above that threshold.

Some employers may need to change employment agreements to provide these guarantees.

The median wage will increase to NZD $27.76 an hour on 4 July 2022, when the AEWV opens for applications.

Hourly rate

If someone is paid an hourly rate, for example NZD $27.76 an hour, we use that to calculate their pay rate.

Wage for standard hours and a different rate for overtime hours

If someone is paid a wage for standard hours and a different rate for any extra hours they work, such as overtime or weekend hours, we use the lowest hourly rate to calculate their pay rate. If the extra hours and pay are guaranteed they can be averaged within a pay period.

Example

Cynthia is paid NZD $27.76 an hour for 40 hours of work each week, and NZD $37.50 an hour for any additional hours she works, her pay rate will be calculated as NZD $27.76 an hour. This hourly rate would increase if Cynthia was guaranteed to be paid for at least 5 overtime hours each week.

Salary

Salary for a set number of hours

If someone is paid a salary for a set number of hours each week, we divide their salary by the number of hours they work to calculate their pay rate.

Example

They are paid NZD $57,740.80 each year for 40 hours of work a week, the calculation is: $57,740.80 ÷ 52 weeks ÷ 40 hours each week = $27.76 an hour.

Salary for a range of hours

If someone is paid a salary for a range of hours each week, we divide their salary by the maximum number of hours they could work to calculate their pay rate.

Example

They are paid NZD $64,958.40 a year for 40 to 45 hours of work a week, the calculation is: $64,958.40 ÷ 52 weeks ÷ 45 hours each week = $27.76 an hour.

Salary for hours changing each week

If someone is paid a salary and their hours change each week, we use the lowest hourly rate to calculate their pay rate.

Example

Sam is paid NZD $99,840 a year, and usually works 52 hours each week, except for 8 weeks when he works 64 hours each week, the calculation to find his lowest hourly rate is: NZD $99,840 ÷ 52 weeks ÷ 64 hours each week = NZD $30 an hour.

We may ask for evidence of the range of hours someone will work.

Salary with hourly rate for overtime

If someone is paid a salary with an hourly rate for additional work like overtime, we check what the hourly rate would be for their salary, what the hourly rate is for overtime, and use the lowest hourly rate (averaged within a pay period) to calculate their pay rate.

Example

John is paid NZD $58,240 each year for 40 hours of work a week, and NZD $37.50 per hour for overtime, then the calculation to find his lowest hourly rate is: $58,240 ÷ 52 weeks ÷ 40 hours each week = $28 an hour.

Piece rates

An employee is paid piece rates if they are paid a fixed amount for every item they produce, no matter how long it takes them to produce it.

Piece rates are not included when we calculate pay rates for AEWV, unless they are guaranteed a top up to ensure a pay threshold is met. This includes all performance payments and commissions.

Example

An employee is paid a base rate of NZD $25 an hour with additional piece rates, we will calculate the pay as NZD $25 an hour. But if the employment agreement includes a guarantee that the pay will be topped up to NZD $27.76 in each pay period in case the employee does not earn enough piece rates to meet the median wage threshold, then we will calculate the pay as NZD $27.76 an hour.

A meat worker on piece rates with a guaranteed top-up payment is paid a base rate of NZD $20 an hour, and 10c for every carcass processed (calculated on a per shift basis). The employer gives a guarantee in the employment agreement that they will pay a top-up if the employee does not process enough carcasses to earn the equivalent of NZD $27.76 an hour across the pay period.

The employee works 40 hours in one week, and processes 2,600 carcasses. Total pay before top up is $1,060 ($26.50 an hour). Employer tops up pay to $1,110.40 ($27.76 an hour).

Variable rates within a pay period

If someone is paid different rates within a pay period, but those rates and hours are guaranteed, we will average the pay across the pay period.

Example

An employee is paid per fortnight and is required to work 10 8-hour shifts per fortnight. 6 of the shifts are day shifts paid at NZD $26 an hour, and 4 of the shifts are night shifts paid at NZD $32 an hour. The employee is guaranteed these hours and pay rates.

The calculation is (6 x 8-hour shifts at $26/hour = $1,248) + (4 x 8-hour shifts at $32/hour = $1,024) = $2,272 per fortnight, averaged across 80 hours = $28.40 an hour.

Including deductions in pay rate calculations

When we calculate someone's pay rate, we include reasonable, agreed deductions, for example, for accommodation, goods and services.

The pay rate calculation does not include:

  • allowances, such as tool or uniform allowances, or
  • bonuses, which are dependent on performance.

If the employer provides accommodation as part of the employment package, and if the deduction is reasonable and agreed in writing, the cost of the accommodation is included when we calculate the pay rate.

Help for employers

The employer line is open between 8am and 6pm, Monday to Friday. Call toll-free from NZ landlines only:
0508 967 569