When you lose your job

Your entitlements first, then how many months you actually have.

Ends with: Knowing how many months your money lasts, and who to ring if that is not enough.

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If you think the process was unfair or your agreement was not followed, that is an employment law question with time limits attached. Employment New Zealand answers questions free, and a personal grievance generally has to be raised within 90 days.

The order here matters more than in any other pathway, so it is worth saying why it breaks from how this subject is normally written.

Almost everything published for people who have just lost a job opens with budgeting advice. Cut the subscriptions, cancel the gym, make a spreadsheet. That is both premature and faintly insulting, because you cannot plan around a number you have not worked out yet, and because the first thing someone in this position needs is not a lecture about discretionary spending.

So this opens with what you are owed. Redundancy compensation in New Zealand is contractual rather than statutory, which means there is no legal minimum and what you receive depends entirely on what your employment agreement says. A great many people assume otherwise and plan around money that is not coming. Then your final pay, line by line, because errors in final pay are common and awkward to correct once you have left. Then what a lump sum is actually worth after tax, which is usually less than expected because extra pay is taxed at a rate based on annualised income.

Only then does it get to how many months you have, which is the number this whole pathway exists to produce, and only after that does it talk about cutting costs. The entitlements come before the belt tightening because entitlements are money you are owed and cutting is money you give up.

The free help is named early rather than saved for the end. If you think the process was unfair or your agreement was not followed, that is an employment law question with a deadline: a personal grievance generally has to be raised within 90 days, and that clock runs while you are busy doing everything else this pathway asks of you.

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  1. What you are entitled to

    Start here, not with budgeting. Redundancy compensation is contractual in New Zealand rather than automatic, so what your agreement says is the whole question.

    Work out your own: Redundancy Entitlement Calculator 9 min read

  2. Your final pay

    Notice, untaken annual leave, any redundancy compensation and outstanding wages. Check it line by line, because errors in final pay are common and awkward to fix later.

    Work out your own: Final Pay Calculator 8 min read

  3. How a payout is taxed

    A lump sum is taxed differently from ordinary wages and the rate can surprise you. Knowing the net figure is what makes the next step honest.

    Work out your own: Lump Sum and Redundancy Tax Calculator 8 min read

  4. How many months you actually have

    The most important number in this pathway. What you have, minus what you must spend, tells you whether this is a short gap or a situation needing help now.

    Work out your own: Redundancy Runway Calculator 8 min read

  5. What gets paid first

    Housing, power and food before unsecured debt. Cut in the order that protects the roof, not in the order that feels most virtuous.

    Work out your own: Budget Calculator 8 min read

  6. What you can claim

    Jobseeker Support has a stand down period that depends on your final pay, so apply early even if you expect to be declined at first. There are supplementary payments many people never claim.

    Work out your own: Benefit Entitlement Estimator 9 min read

  7. Tell your bank before you miss anything

    Banks have a formal hardship process and would rather use it than chase you. Ringing before the first missed payment gives you options that ringing after does not.

    7 min read

  8. If the mortgage is the problem

    What actually happens when a payment is missed, in what order, and how much time there really is. Far more than most people fear, but only if you engage.

    8 min read

  9. Pausing KiwiSaver

    A savings suspension frees up cash quickly, and it is reversible. Understand the long term cost before you use it, and treat it as temporary.

    Work out your own: KiwiSaver Savings Suspension Impact Calculator 7 min read

  10. Free help, and who to ring

    MoneyTalks provides free confidential financial mentoring, funded by the Ministry of Social Development, with no referral needed. Mentors can also negotiate with creditors for you.

    7 min read

  11. The money side of the next job

    Tax code, KiwiSaver, notice and the gap between the last pay and the first. Worth reading before you accept, not after.

    7 min read

  12. If the answer is retraining

    Sometimes the job is not coming back. Work out what a course costs against what it changes, before committing time you are short of.

    Work out your own: Course ROI Calculator 9 min read

When to stop and get someone else

Employment New Zealand answers questions about entitlements and process free of charge, and a union will read an agreement for you whether or not you were a member at the time. If you believe the redundancy was not genuine or the process was flawed, get advice quickly, because a personal grievance generally has to be raised within 90 days.

This pathway is information, not financial advice. Rates, thresholds and rules change; every guide carries the date it was last reviewed.

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Frequently asked questions

Am I entitled to redundancy pay in New Zealand?

Only if your employment agreement provides for it. Unlike some countries, New Zealand has no statutory minimum redundancy compensation, so what you receive depends on what your agreement says. You are always entitled to notice, any untaken annual leave and outstanding wages in your final pay.

How is a redundancy payment taxed in New Zealand?

A redundancy payment is an extra pay lump sum and is taxed at a rate based on your annualised income rather than at your usual PAYE rate. That often means more tax is withheld than people expect, so work out the net figure before planning around it.

How soon can I get Jobseeker Support after redundancy?

There is usually a stand down period, and its length depends on the size of your final pay. Apply as soon as you can rather than waiting for the stand down to pass, because the application takes time and there are supplementary payments such as the Accommodation Supplement that many people never claim.

What should I do first if I lose my job?

Check your entitlements before you start cutting spending. Work out your final pay and what it is worth after tax, then work out how many months that gives you. That figure decides whether this is a short gap you can manage or a situation where you should be ringing your bank and a financial mentor now.

Should I pause my KiwiSaver if I lose my job?

A savings suspension is reversible and frees up cash quickly, so it is a reasonable short term move. It does cost you long term growth and, if you return to work, the employer contribution you would have received, so treat it as temporary and restart when you can.