Pay Parity Calculator NZ

How the pay parity comparison works

A raw salary comparison is misleading when two roles involve different hours or leave entitlements. Someone earning $65,000 for 45 hours a week is actually paid less per hour than someone earning $60,000 for 37.5 hours. This calculator solves that by converting every pay package to a common measure: the effective hourly rate, after removing all non-working time.

Effective working weeks

The calculation starts from 52 weeks per year, then deducts annual leave (converted from days to weeks by dividing by 5) and the 11 New Zealand public holidays (also divided by 5 to convert to weeks). The remaining weeks are the effective working weeks during which each person is actually paid to work.

Working weeks = 52 minus (annual leave days divided by 5) minus (11 divided by 5)

For a standard arrangement of 20 days leave, this gives 52 minus 4 minus 2.2, which is 45.8 effective working weeks per year.

Hourly rate

Total annual compensation (salary plus allowances and bonuses) is divided by the total annual hours (hours per week multiplied by effective working weeks) to produce the effective hourly rate. This is the most like-for-like measure when comparing roles with different hours or leave.

Full-time equivalent salary

To give a dollar figure that is easier to compare, the hourly rate is multiplied by a standard 1,832 hours per year (40 hours per week times 45.8 effective working weeks). This is the FTE equivalent: what each person would earn if they both worked a standard 40-hour week with 20 days of annual leave.

Equal pay law in New Zealand

The Equal Pay Act 1972, substantially amended in 2020 and again in 2025, governs pay parity in New Zealand. It covers two separate claim types. Equal pay claims address pay differences between employees doing the same or substantially similar work, regardless of the gender composition of the workforce. Pay equity claims address the systemic undervaluation of work that is, or has historically been, predominantly performed by women, even where there is no direct male comparator doing the same job.

The Equal Pay Amendment Act 2025, passed under urgency in May 2025, significantly changed the pay equity track. It raised the threshold for a predominantly female occupation from around 60 to 66 percent up to 70 percent, required that threshold to have been met for ten consecutive years, terminated 33 existing claims affecting approximately 150,000 workers, removed back-pay awards by the Employment Relations Authority, and introduced a ten-year moratorium on re-raising settled claims. These changes are subject to ongoing legal challenge.

Separate from the Equal Pay Act, the Human Rights Act 1993 prohibits pay discrimination on 13 grounds including sex, age, ethnicity, disability and family status. The Employment Relations Act 2000 requires good faith employment relationships and prohibits discrimination in pay.

What can justify a pay difference?

A genuine pay gap is not automatically unlawful. Factors that can lawfully justify different rates of pay include: demonstrably different skills or qualifications, material differences in experience, performance-related pay applied consistently, seniority and length of service schemes, and genuine market rate differences for specialist skills. What cannot justify a pay difference is the employee's gender, age, ethnicity, disability, family status, or other protected characteristics. Market rates are not an independent defence if those market rates are themselves the product of historical undervaluation of female-dominated work.

Worked example

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