How we calculate your Essential Skills pay rate
We look at your employment agreement to calculate how much you will be paid.
Calculating your pay rate
The conditions of your Essential Skills visa depend on if you are paid below the median wage or the median wage or above.
To determine your pay rate we calculate how much you will be paid per hour, based on your employment agreement.
To be considered above the median income, every hour you work must be paid above the NZ median wage, which is currently NZD $25.50 an hour.
Updating Essential Skills pay rate thresholds
If you are paid hourly
If you are paid an hourly rate, for example NZD $25.50 an hour, then we use that to calculate your level.
If you are paid a wage for standard hours and a different rate for overtime hours
If you are paid a wage for standard hours and a different rate for any extra hours you work, such as overtime or weekend hours, we use the lowest hourly rate to calculate your level.
For example, if you are paid NZD $25.50 an hour for 40 hours of work each week, and NZD $37.50 an hour for any additional hours, then we use NZD $25.50 an hour to calculate your level.
If you are paid a salary for a set number of hours
If you are paid a salary for a set number of hours each week, we divide your salary by the number of hours you work to calculate your level.
For example, if you are paid NZD $55,000 each year for 40 hours of work a week, the calculation is: $55,000 ÷ 52 weeks ÷ 40 hours each week = $26.44 an hour.
If you are paid a salary for a range of hours
If you are paid a salary for a range of hours each week, we divide your salary by the maximum number of hours you could work to calculate your level.
For example, if you are paid NZD $55,000 an year for 40 to 45 hours of work a week, the calculation is: $55,000 ÷ 52 weeks ÷ 45 hours each week = $23.50 each hour.
If you are paid a salary and your hours change each week
If you are paid a salary and your hours change each week, we use the lowest hourly rate to calculate your level.
For example, if you are paid NZD $54,000 a year, and usually work 52 hours each week, except for 8 weeks when you work 64 hours a week, the calculation to find your lowest hourly rate is: NZD $54,000 ÷ 52 weeks ÷ 64 hours each week = NZD $16.23 each hour.
We may ask for evidence of the range of hours you will work.
This situation often applies to farm workers, who may have employment agreements that state the different hours expected during different parts of the year.
If you are paid a salary with an hourly rate for overtime
If you are paid a salary, with an hourly rate for additional work like overtime, we check what the hourly rate would be for your salary, what the hourly rate is for overtime, and use the lowest hourly rate to calculate your level.
For example, if you are paid NZD $55,000 each year for 40 hours of work a week, and NZD $37.50 per hour for overtime, then the calculation to find your lowest hourly rate is: $55,000 ÷ 52 weeks ÷ 40 hours each week = $26.45 each hour.
Including deductions in pay rate calculations
When we calculate your pay rate, we include reasonable, agreed deductions, for example, for accommodation, goods and services, if you meet a particular pay rate threshold.
The pay rate calculation does not include:
- allowances, such as tool or uniform allowances, or
- bonuses, which are dependent on performance.
Piece rates for Essential Skills Work Visas
You are paid piece rates if you are paid a fixed amount for every item you produce, no matter how long it takes you to produce it.
Piece rates are not included when we calculate pay rates for Essential Skills Work Visas.
If you want to get a second job
If you are granted an Essential Skills Work Visa that lets you have a second job (secondary employment), the level will be determined by your main job's pay rate.
For example, we determine your employment to be above the median wage if you had 2 jobs and:
- 1 was 40 hours a week and paid more than the median wage, and
- the other was 10 hours a week paid just above minimum wage.
You are granted an Essential Skills Work Visa based on your main employment, which must meet the visa's conditions.
If your employment package includes accommodation
If your employer provides you with accommodation as part of your employment package, then deduct the cost of this from your salary. If the deduction is reasonable and you have agreed to it in writing, then the cost of the accommodation is included when we calculate your pay rate.