Overtime vs New Hire Calculator NZ 2026

This calculator answers a question most managers settle by instinct: at what point does paying overtime cost more than taking on another part timer. You enter the hours you need covered each week, the ordinary rate and the overtime multiplier you pay, the rate you would pay a new person, your employer KiwiSaver and ACC work levy, and the one off cost of hiring someone including advertising, interviewing, induction and equipment. It returns the weekly cost of each option, which one is cheaper and by how much a week and a year, and the break-even number of overtime hours at which the answer flips. The logic is simple once the numbers are on the page. Overtime is paid at a multiple of the ordinary rate, so its premium grows with every hour, while a new employee is paid at the ordinary rate and carries a one off setup cost instead. Spread that setup cost over the time you expect them to stay and there is always a number of hours above which hiring wins. Two cautions. Employer on-costs apply to both options, so leaving them out of either side distorts the comparison rather than cancelling out, because the two wage bases differ. And the money is the easier half of this decision: sustained overtime carries fatigue and health and safety risk, concentrates knowledge in one person and raises the chance of losing them, while a second person gives you cover for leave and sickness. Treat the break-even figure as one input rather than the answer.

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$130
a week cheaper to hire another part timer
Overtime, per week$563
New hire, per week$433
Break-even overtime3.69 hours
Difference over a year$6,750

Above 3.69 overtime hours a week, hiring is the cheaper option on these numbers. Both figures include employer KiwiSaver and the ACC work levy. The new hire figure spreads the one off hiring cost over 52 weeks.

How it works

The overtime option costs the hours needed times the ordinary rate times the overtime multiplier, plus employer KiwiSaver and the ACC work levy on that amount. The new hire option costs the same hours at the new hire's ordinary rate, plus the same on-costs, plus the one off cost of hiring divided by the number of weeks you are spreading it over. The difference between the two is the weekly saving, and multiplying by 52 gives the annual figure. The break-even point is the number of overtime hours at which the two options cost the same: it is the weekly share of the hiring cost divided by the loaded difference between the overtime rate and the new hire's rate. Below that number of hours, overtime is cheaper because the setup cost has nothing to spread across; above it, the overtime premium wins.

Worked example

A business needs 12 extra hours covered each week. The current team is on $30.00 an hour and overtime is paid at time and a half, so those hours cost $540 in wages, and with employer KiwiSaver at 3.5 percent and an ACC work levy of 0.67 percent the loaded figure is about $563 a week. A new part timer on the same $30.00 ordinary rate would cost $360 in wages, about $375 loaded, plus $3,000 of recruitment and setup spread over 52 weeks, which is another $57.69, so about $433 a week. Hiring is therefore about $130 a week cheaper, roughly $6,750 over a year. The break-even sits at 3.69 hours: below that the overtime premium is too small to cover the hiring cost, and above it the new hire wins.

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Data sources: the rates on this page are maintained against Inland Revenue and Employment New Zealand. Figures are checked twice monthly.

Frequently asked questions

When does hiring become cheaper than paying overtime?

At the point where the overtime premium you pay each week exceeds the weekly share of the one off cost of hiring someone. Because overtime is paid at a multiple of the ordinary rate while a new employee is paid at the ordinary rate, the premium grows with every extra hour, so there is always a number of hours above which hiring wins. This calculator returns that number for your own rates and recruitment cost.

What costs should I include for a new hire?

Wages, employer KiwiSaver of at least 3.5 percent, the ACC work levy for your industry, and the one off cost of getting them started: advertising, agency fees, the manager hours spent interviewing, induction, equipment and uniforms. Spreading that one off cost over the period you expect them to stay is what makes the comparison fair, because overtime carries no setup cost at all.

Is there more to this than the money?

Yes, and the money is usually the easier half. Sustained overtime carries fatigue and health and safety risk, raises the chance of losing the person doing it, and concentrates knowledge in one head. A second person adds cover for leave and sickness and reduces that risk. Treat the break-even figure as one input to the decision rather than the decision itself.