Not being paid correctly in New Zealand, final pay and holiday pay owed

Last updated 20 June 2026. This is general information, not legal advice.

Being underpaid is far more common than most people realise, and it is often not a dramatic refusal to pay but a slow drip of small wrongs. Hours that go unrecorded, a final pay that is light, holiday pay worked out on the wrong figure, a deduction for a till shortfall or a broken plate that you never agreed to. Much of it is recoverable, the law is firmly on the worker’s side, and as of last year deliberately doing it is a crime.

This guide explains what you must be paid, what your employer can and cannot take out of your pay, what a correct final pay looks like, and the free way to claw back money you are owed going back six years. It is general information, not legal advice.

What you must be paid

The floor is the minimum wage. From 1 April 2026 the adult minimum wage is $23.95 an hour, and the starting-out and training minimum wages are $19.16 an hour. These are set under the Minimum Wage Act 1983 and apply to almost all employees aged 16 and over. It is unlawful to be paid less, and you cannot agree to be paid below the minimum wage even if you wanted to.

The minimum applies to every hour you actually work, and a few things commonly missed are caught by it. You must be paid for time spent training, opening or closing, cashing up, and required to be at work. If you are paid a salary, your pay still has to come out to at least the minimum wage across the hours you actually work, which can be breached if a salaried employee is worked very long hours. Being on a piece rate or commission does not get an employer out of the minimum wage either.

On top of wages you are entitled to your leave under the Holidays Act 2003, including four weeks of paid annual holidays a year, paid public holidays, and sick and bereavement leave. Holiday pay is part of your pay, not a bonus, and getting it wrong is one of the most common forms of underpayment.

Unlawful deductions from your pay

Under the Wages Protection Act 1983, the basic rule is that your employer must pay your wages in full and cannot make deductions from them without your written consent. There are lawful exceptions, such as PAYE tax, student loan and KiwiSaver deductions and court-ordered payments, but anything else generally needs your specific agreement in writing.

This is where a lot of quiet wage theft happens. An employer docks your pay for a till that came up short, a customer who walked out without paying, breakages, a uniform, or a cash float that went missing. Unless you genuinely agreed in writing to that specific kind of deduction, it is unlawful, and even a general clause in your agreement does not let an employer help themselves to whatever they like. An employer must also consult you before relying on a general deduction clause, and a deduction still has to be reasonable. If money has been taken out of your pay that you did not clearly agree to, you can claim it back.

Final pay, what it must include

When you leave a job, whether you resign or are dismissed, your final pay has to be complete. It must include all of the following.

• All your outstanding wages up to your final day, including any hours not yet paid.
• Payment for any annual holidays you were entitled to but had not taken, paid at the proper rate.
• 8% of your gross earnings for the period since your last holiday anniversary, for the leave you had built up but were not yet entitled to take.
• Payment for any public holiday that falls within a period you are being paid out for and would otherwise have worked, plus any other entitlement your agreement provides.

Final pay is generally paid in the pay that relates to your last period of work, or on the timing your employment agreement sets. It is taxed like normal pay. A common trick is a final pay that quietly leaves out the holiday pay, or that has a deduction taken from it that you never agreed to, so check your final payslip line by line against what you are owed.

Holiday pay, the part most often wrong

Holiday pay is genuinely complicated, which is why even large employers have underpaid it on a huge scale. The key points for a worker to know are these.

When you take annual holidays, they must be paid at the greater of your ordinary weekly pay or your average weekly earnings over the past 12 months. That matters if your income varies or includes regular overtime or commission, because using the lower figure underpays you. Annual holiday pay must be at least 8% of your gross earnings, which is the figure used to pay out leave you have accrued but not yet become entitled to take.

Some employers pay holiday pay as you go, adding 8% to each pay rather than paying it when you take leave. This pay-as-you-go method is only lawful in limited situations, mainly genuinely casual or short fixed-term work, it has to be agreed and shown as a separate, identifiable amount on your payslip. If a permanent employee has been put on pay-as-you-go holiday pay, that is usually unlawful and you may be owed proper holiday pay on top. If your holiday pay looks low, or you cannot see how it was worked out, ask for the calculation, because this is the entitlement most often got wrong.

Wage theft is now a crime

This is a significant recent change. Since 14 March 2025, intentionally failing to pay an employee money they are owed is a criminal offence under section 220AA of the Crimes Act 1961, inserted by the Crimes (Theft by Employer) Amendment Act 2025. Money owed under an employment agreement, or under laws such as the Holidays Act, the Minimum Wage Act or the Wages Protection Act, is now covered by the theft provisions.

The line is intent. The offence is about an employer who deliberately withholds pay without reasonable excuse, not an honest payroll mistake, so an employer who can show a genuine error has not committed the crime. But where it is deliberate, the penalties are serious. Where the amount withheld is more than $1,000 the maximum is up to seven years’ imprisonment, an individual can face up to a year in prison or a fine of up to $5,000, and a company can be fined up to $30,000.

For most workers this matters less as a route to take yourself, since it is a criminal matter for the authorities, and more as a measure of how seriously the law now treats deliberate underpayment. Recovering your money is still mainly done through the channels below.

How to get your money back

Here is the practical sequence, and most of it is free.

1. Get your records. Your employer has to keep wage and time records and holiday records, and you can ask for a copy of yours. Work out what you were actually paid against what you should have been paid, hour by hour if you need to.
2. Raise it in writing with your employer. Set out clearly what you believe you are owed and why, and ask for it to be paid. Many underpayments are errors that get fixed once they are pointed out in black and white.
3. Contact the Labour Inspectorate. For minimum wage and holiday pay breaches, the Labour Inspectorate at the Ministry of Business, Innovation and Employment can investigate for free, can issue a demand notice requiring the employer to pay, and can take action in the Employment Relations Authority on your behalf.
4. Use free mediation. MBIE mediation can resolve a pay dispute without a hearing and make any agreement binding.
5. Go to the Employment Relations Authority. If it is not resolved, the Authority can order the employer to pay what you are owed. Unpaid wages and holiday pay can be claimed going back six years, so an old underpayment is not necessarily lost.

Free help to work all this out is available from Community Law Centres, Citizens Advice Bureaux, and your union if you are a member. You do not need to pay a lawyer to get started.

The takeaway

You are entitled to be paid for every hour you work, at least at the minimum wage, with your holiday pay calculated properly and nothing deducted that you did not agree to in writing. When you leave, your final pay has to be complete, holiday pay included. If any of that is wrong, get your records, put it in writing, and bring in the Labour Inspectorate, which will chase it for free. Underpayment is recoverable for six years, and deliberate wage theft is now a crime, so the worker who checks their pay and speaks up is in a strong position.

Related guides

• Unfair dismissal in New Zealand, the personal grievance process
• Can my employer make me redundant in New Zealand

Frequently asked questions

What is the minimum wage in New Zealand

From 1 April 2026 the adult minimum wage is $23.95 an hour, and the starting-out and training minimum wages are $19.16 an hour. You must be paid at least the minimum for every hour you actually work, and you cannot lawfully agree to be paid less.

Can my employer deduct money from my pay for a till shortage or breakage

Not without your written agreement to that specific deduction. Under the Wages Protection Act an employer cannot dock your pay for things like till shortages, breakages, uniforms or customers who do not pay unless you agreed in writing, and even then it must be reasonable and they should consult you first. A deduction you did not agree to is unlawful and you can claim it back.

What should my final pay include

All outstanding wages up to your last day, payment for any annual holidays you were entitled to but had not taken, 8% of your gross earnings for leave accrued since your last holiday anniversary, and any public holiday or other entitlement owing. Check it line by line, because holiday pay is the part most often left out or underpaid.

How far back can I claim unpaid wages in New Zealand

You can claim unpaid wages and holiday pay going back six years, regardless of whether the underpayment was deliberate or a mistake. The Labour Inspectorate can pursue minimum wage and holiday pay breaches for you, and the Employment Relations Authority can order the employer to pay.

Is it illegal for an employer not to pay wages

Yes, and since 14 March 2025 intentionally withholding wages or entitlements without reasonable excuse is a crime under the Crimes Act, with penalties up to seven years’ imprisonment where the amount is over $1,000. Honest payroll mistakes are not criminal, but they still have to be put right, and you can recover the money.

Who do I contact about unpaid wages

Start with your employer in writing. For minimum wage and holiday pay breaches, contact the Labour Inspectorate at MBIE, which investigates for free and can require the employer to pay. You can also use free MBIE mediation and, if needed, the Employment Relations Authority. Community Law and Citizens Advice can help you for free.

Do I get paid for training, opening and cashing up

Yes. Time you are required to spend training, opening or closing, and cashing up is work, and it must be paid at no less than the minimum wage. Being made to arrive early or stay late to do these things without pay is a form of underpayment you can claim for.

Have you recovered unpaid wages or a short final pay in New Zealand? Tell us how it went in the comments below.