Setting up a young employee in the payroll system is similar to setting up any other employee. This article gives you useful tips and links to information when employing a young person.
Updated: February 2024
In this article:
- Useful things to note when employing a young person
- Example of an Employee Profile setup
- Useful links and further resources
What do I need to know about employing a young worker
There are some special things to note when employing someone under the age of 18.
- Young employees must have an IRD number, Tax Code declaration and Employment Agreement - the same as any employee.
- When employing someone under the age of 20 years of age, the employer must record the employee's age on their leave and time record.
- Minimum wage
- There is no minimum wage for employees under the age of 16
- Between 16-19 years, young employees can be paid a starting-out wage, if this applies. The latest rates can be found here.
- KiwiSaver - Follow this link to our help article showing this setup.
- Employer Contributions only become compulsory when the employee turns 18 y/o
- If the employee (under 18 y/o) has voluntarily joined KiwiSaver, their deductions can be made from their wages.
- The employee has the option to either voluntary contribute to their KiwiSaver directly, or have you deduct this directly from their wages.
- If under 18 y/o, they have to apply directly with the KiwiSaver Scheme provider. Their parents might need to sign them up. If signed up, they still have to provide the employer with a KS2 stating the contribution rate.
- Restrictions to hours worked apply
- When employing school-aged children (under 16), their work hours must be outside of school hours AND not between 10 pm and 6 am
- A certificate of exemption must be supplied to override this rule
- There are restrictions to where a young employee may work and the type of work they are allowed to do
Employee Profile Setup
To comply with showing the employee's age on their leave and time record, we suggest adding this to their employee profile. Let's have a look at such a setup:
- Add the employee's age in the Name Field in the Employee Profile.
- Adding it here will show the employee's age on their timesheet and payslips.
- The minor employee should have their own IRD number and not use their parent or another person's number.
- The employee should have their own bank account details.
- Do not enter their age in this field, as it will not show on their payslip. This reference is only for bank transactions and will appear on the bank statement only.
- This email address is where the payslip will be sent. The employee should provide their own email address.
- Update and Save the information before moving on to the next tab.
Note: Their Standard Pay Tab
The employee's pay rate could be lower than the Adult Minimum Wage if they are receiving the starting- or training wage.
This tax code should be as supplied in the employee's tax code declaration form.
Let's take a look at what their Timesheet and Payslip will look like:
Depending on the type of employment contract, a young employee should see the same information displayed in their timesheet and on their payslips, except for their age next to their name.
- The Gross is calculated in the same way as other employees.
- As this minor employee is employed on a casual contract, their Holiday Pay is paid out in each pay and displayed as a separate figure.
- Their PAYE tax is deducted in the same way as other employees and paid to the IRD. Their pay day filing is done at the same time as all other employees.
Let's look at the Employee's Payslip
- The employee's age will be displayed on the paylip next to their Name field.
- Their pay rate is displayed under taxable pay types if so selected in the Employee Profile. We recommend this, especially as a minor employee may receive a starting-out pay rate.
