Working Remotely in New Zealand for a US Company [2024]
The US employs people from all over the world, so remote work it’s not uncommon. So, you might be wondering how to relocate to New Zealand while working for a US company or accept a job from one when already living there.
You can work for a US company from New Zealand as a sole trader, business entity, contractor, freelancer, or employee. However, you must be aware of visa requirements, tax regulations, and all the other important details before you do the shift.
The US is the world’s largest economy and home to the biggest brands like Apple and Microsoft. No wonder you might consider working for the US even when living in New Zealand. In fact, it’s not someone out of order anymore, many professionals are pursuing a career in the US economy but live elsewhere. Yet, you need to sort out some legal details, residency regulations, and taxation.
If you are considering moving from the US to New Zealand, read the article on the cost of living in the US vs NZ. Also, learn how to freelance in New Zealand.
Can you work for an American company from New Zealand?
You can work remotely from New Zealand for a US employer. However, there are plenty of complications and essential details to keep in mind.
Whether you can work for a US company from New Zealand depends on your legal status. In that situation, being a New Zealander definitely helps. To stay legally in New Zealand, you also need a visa or a residence permit that allows you to work.
New Zealand citizens and residents
New Zealand citizens and residents can work in New Zealand without needing a work visa; hence they can work for any employer, including foreign ones.
Foreigners and visa holders
As a foreigner who relies on a work visa, working for a US company will be more difficult. The basis of any work visa is to be employed in New Zealand by a New Zealand entity. Some visas even require the appropriate accreditations so the employer can hire workers from abroad.
However, some exceptions apply to people who hold a partner visa or any visa which is other than a work visa. In that case, you usually can choose the employer freely, including overseas companies.
As you can see, the legal matter of working remotely from New Zealand varies case by case.
Is your employer a US or NZ entity?
Will you be employed by the US entity or by the New Zealand entity? This plays a major role when working remotely and paying taxes. It’s also a crucial factor for your social security contributions.
If you work for a US company that has a NZ entity, your employment will be easier and more secure. You will work under New Zealand employment laws and get paid in NZ dollars. Plus, your employer will contribute to the retirement fund, and you get all the benefits of being an employee in New Zealand.
At the same time, if your US employer is only registered in the US as a company, the legal side of working remotely from New Zealand will be more complex. You will need to set up a suitable scheme and work, for example, as a contractor, a business, or an employee.
1. Getting paid
There are several ways how you can get paid when working remotely from New Zealand:
- Payroll in the US
- Payroll in New Zealand
- Independently via PayPal, Wise, etc.
The best part of the New Zealand payroll is that it’s simpler than the US, assuming your American company has an NZ entity. Otherwise, your employer will pay your income tax and social security in the US, or don’t do any of this at all.
Nowadays, many remote workers get paid conveniently via services like Wise or PayPal. In my opinion, Wise is the best option out there as it does almost transfers, costs pennies, and is secure. Plus, you can even get a debit card for your account. Check out their app on mobile.
2. Taxes and social security
The main elements and complications involved in working remotely are taxes and social security. You and your employer will need to find an optimal solution for this. Many remote workers take responsibility and do that part of the job on their own. Hence, you will manage your taxes and social security contributions.
Also, if you are a US Person (US Citizen, National, or Greencard Holder), you will continue to have US tax obligations, hence, pay taxes in the US, even if you have no US-sourced income.
Generally, if you are in New Zealand as a tourist, then tax regulations are not imposed on you the same way they are imposed on legal citizens of the country. Usually, a visitor tourist visa allows you to stay up to 9 months. During this short period, you are not subject to paying tax fees. Limited exemptions are applied for a visit under 93 days.
However, if you stay longer, then new rules apply, and you generally will have to pay taxes in New Zealand. That said, foreigners are exempt from paying taxes on their foreign income sources in the first four years of living in New Zealand, however, this doesn’t include wages.
Therefore, if you live in New Zealand on a regular basis and work in the US, you might need to calculate, return, and file your own PAYE, according to Deloitte New Zealand.
This is called being an IR56 taxpayer. This scheme is called “a New Zealand-based representative of an overseas company.” If your employer has an entity in New Zealand, they will do the PAYE.
Healthcare
If you don’t qualify for free public healthcare, you can take out affordable private insurance such as one from Cigna Global. It’s a US company offering global coverage.
3. Residency regulations and taxation
When it comes to paying taxes based on your residency regulations, the basic two options are whether you have been in the country for more than 183 days or you have a permanent residency.
If you are already a tax resident of New Zealand, your worldwide income will be taken into account, and you will be taxed based on that. Then, it doesn’t matter whether the income was earned or paid unless you apply for a four-year exemption.
You will be considered a tax resident, which differs from immigrant residency in two ways. If you have been physically present in the country for 183 days or if you have a permanent place of abode in New Zealand.
However, if you are a non-resident, your taxation is subject to only the income originating in New Zealand.
4. Visa
There are a limited number of visa options available for working remotely in New Zealand. Generally, you need a work visa, but your American employer must have a branch in New Zealand.
These include skilled migrant resident visa, accredited employer visa, post-study work, talent work visa, and specific-purpose work visa.
If your employer has no presence in the country, you can temporarily live in New Zealand on a visa that isn’t directly connected to the employment, e.g., a working holiday visa. Also, if you have a partner or a student visa, you can work for a US company from New Zealand.
5. Time difference
The time difference between the US and New Zealand is huge! We are far ahead in New Zealand, and when it’s a Monday morning in Auckland, it’s still Sunday night in San Francisco. That means you have to plan your schedule and lifestyle wisely before you move here.
Generally, you will either need to work American hours or NZ hours or something in between if you set it up with the employer. You can expect delays in communication with team members because of the time difference.
East Coast US might find it easier to work with New Zealand since the time difference is less significant. During the winter, it’s 7 am in Auckland and 3 pm in New York, which allows some time to work together.
Lastly, when working for a US company, you also need to consider how many hours you work. It’s typical for an employee to do overtime, and an average working week in the US is 47 hours.
Compare it to New Zealand, 38-40 hours, and you will easily find yourself in burnout. Therefore, keeping track of your work-life balance, even when working remotely, is crucial.
Working remotely for US employer: what to know?
It becomes more common for people from all over the world to work for the US mainly because the US economy is so big. That said, you need to know several critical things in order to be successful in this.
The first thing you need to know is whether or not you have the right to work remotely in New Zealand or the US. You will need to have a work permit for either of these countries. If you are a citizen or a permanent resident of New Zealand, life gets easier.
And if not, then you need to have a work visa or visa that allows you to work. In any other case, you can be held accountable for penalties.
Besides visas, professional insurances and licenses are also quite a hassle. Always remember that an employer’s insurance policies and necessary licenses hold power only in the particular foreign country they abide in. If an employee works from outside the US, the insurance and licenses might not cover them.
Before you accept the job, you need to know what legal options are available for remote working. Typical setups include freelancers, employees, businesses, and contractors.
Who can work remotely? Opportunities include working in IT, for example, as a software developer, programmer, or data analyst, or in other areas, e.g., as an administrative assistant, in customer service, in the HR department, or as a content creator. That said, the list is growing.
Visas for working remotely in New Zealand
While you can work remotely from New Zealand for an American employer, you need a valid visa. However, getting a visa based on your employment overseas is quite a rare occasion in New Zealand.
Generally, you must be either a New Zealand citizen, a permanent resident, or have a job with an employer based in New Zealand, yet, it can be a foreign company. You might also work and live in New Zealand on a non-employment-related visa, e.g., a partner visa.
Option 1: Working as a sole trader
Working as a sole trader means you will be self-employed, which in turn means you will have to manage your tax obligations all by yourself. Bummer, right?
But the good news is that if you are a resident or citizen of New Zealand, then you don’t need any other work visa. Moreover, starting out as a sole trader is easier and cheaper than, for example, opening a company.
The process follows registering your business with the Inland Revenue Department. Once you have an IRD number, you need to keep track of your budget, income, expenses, and so on.
The profit you earn from your work will be subject to income tax regardless of the amount of profit you make. But, if your annual yield exceeds NZ$90,000, you are required to pay GST.
Option 2: Setting up a company
Some people decide to work for another company as a legal entity. Hence, they choose to set up a Proprietary Limited Company (Pty Ltd) (or any other business construct). There are some benefits to working as a company for clients in the US vs as a sole trader:
- Tax rates – sole traders are taxed as individuals, and the individual tax rate is higher than the full company rate.
- Limited liability – company structure provides legal protection because it’s a separate legal entity.
- Withholding and Superannuation – as a Pty Ltd, you will pay yourself a Superannuation and withhold income tax. As a sole trader, you will be responsible for making these payments on your own and ensuring you have enough money left for these payments.
Option 3: Working as an employee
Working as an employee is the safest, most hassle-free, and most secure way to land a job remotely. This is because the company takes you under its wing and provides a steady paycheck, insurance, social security, retirement, and a legal job letter to you (for visa purposes).
The visa options or work permits required for a job as an employee include a specific purpose work visa or the accredited employer work visa.
As a permanent resident of New Zealand, you don’t need to do anything, but general foreigners must get a job offer from a company represented in New Zealand and keep track of both visa processing and tax regulations.
However, if a US company hires you as an employee and they don’t have an entity in New Zealand, it won’t be easy to get a work visa in NZ based on that.
Option 4: Working as a freelancer
Freelancing is yet another field of work that is self-employed and makes you responsible for managing your taxation. The rules are the same as that of a sole trader. You will need to set aside money from every pay cheque that you receive.
About 144,000 New Zealanders work based on self-employed contractors, which is equal to one in 20 of all employed people.
Generally, employment income like this one is taxed through the PAYE system, where the employer takes care of the entire tax process.
But this depends on your employer. For employees working remotely, there may or may not be a responsibility for the employer to manage PAYE.
In case you don’t receive PAYE income as a contract employee, your employment status changes automatically to self-employed, and you are legible to manage your taxes yourself.
Unfortunately, there is none if you are a foreigner moving to New Zealand and looking for a freelance/digital nomad visa. Currently, non-residents can’t get a visa to work as freelancers from New Zealand.
However, there are some ways around that. For instance, you can apply for a visitor visa or a working holiday visa. The first is valid for up to one year and the latter between 12 to 23 months, depending on your nationality.
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