Getting your head around agri employment contracts

Whether you’re employing workers on a permanent, fixed term, or casual business, all employees must, by law, have a written individual employment agreement. This includes people like relief milkers who are only on a farm irregularly (casually) or for a set period of time (fixed term).

The agreement must set out the basic terms and conditions of employment, including what each party’s rights and responsibilities are, and what is expected of them. It can also protect both the employer and employee if things don’t work out.

Inclusions

An employment agreement must include the names of the employer and employee, a description of the work, place of work, agreed hours (or indication of the hours of work) and the wages/salary to be paid. The agreement must also comply with the Holidays Act 2003 and explain the process for employment grievances.

Trial periods

Trial periods can only be used by employers with fewer than 20 employees. If there is a trial period in an employment agreement, it should only be for up to 90 days from the start of employment.

If you and the employee agree to a trial period, this must be included in the agreement and signed by the employee before he or she starts any work for you (even 5 minutes after starting has been held by the courts to be too late). This employee must also be a new employee which means he or she must never have worked for you, even on a casual basis, before.

Agreements

Federated Farmers provide an array of employment agreements which can be bought online – permanent and fixed term employment agreements, a casual employment agreement, and a contract milking agreement. These are updated regularly and contain all the essential terms you need in the contract. If you need something more bespoke then your local rural professional (lawyer, accountant, farm consultant) can help you draft an agreement that meets your specific industry/job needs.

Once work has commenced

As an employer you must keep accurate records of hours worked, wages payable (and paid), and leave taken for each employee. You are legally required to keep these records for at least seven years, so it pays to have a good, secure record keeping system.

< Older Post

Newer Post >

Becoming an employer of choice

15 October 2025

How to attract great people to your business and how to keep them. Three tips to help you rise to the challenge to become an employer of choice.

What the IRD Expects from You as an Employer

10 October 2025

As an employer, there are several obligations and expectations set by the Inland Revenue Department (IRD) that you must adhere to. Understanding these requirements is essential for maintaining compliance and avoiding any potential penalties. Let's take a closer look at what the IRD expects from you as an employer. Register as an Employer Before you hire your first employee, you are required to register as an employer with the IRD. This is a crucial first step in ensuring that you can meet all tax and payroll obligations. Accurate Record Keeping The IRD requires you to keep accurate and detailed records of all employment-related transactions. This includes: Employee personal details Wages and salary paid Payroll dates and methods PAYE deductions and remittances Details of benefits or allowances provided to employees Maintaining proper records helps ensure that you are reporting and remitting the correct amounts to the IRD. Deduct PAYE Tax You are responsible for deducting PAYE (Pay As You Earn) tax from your employees' pay. This involves calculating the correct amount of PAYE and ensuring it is deducted from each employee's salary or wages before their net pay is provided. Pay Employer Contributions In addition to PAYE, you may also be responsible for contributing to your employees' social security and retirement benefits, depending on the country you operate in. These contributions are typically paid in conjunction with PAYE tax. Issue Statements and Forms At the end of the tax year or upon employment termination, you should provide each employee with a statement showing their total earnings and PAYE deductions. Additionally, filing the appropriate end-of-year PAYE schedules with the IRD is required. File Employer Returns Employers are required to file regular returns with the IRD, which could be monthly, quarterly, or annually, depending on specific regulations. These returns should accurately report all payroll activities, including PAYE deductions. Handle Tax Codes and Changes It's crucial to apply the correct tax codes for each employee's circumstances. Any changes in employment status or tax code must be updated promptly to ensure accurate tax withholdings. Comply with Audit Requests The IRD may audit your business to ensure compliance with employer obligations. As such, being prepared to provide all requested information and records in a timely manner is vital. Adhering to these expectations from the IRD is not just about compliance; it's about fostering a transparent and trustworthy relationship with your employees and the tax authorities. If you need assistance with understanding or managing your obligations as an employer, consider reaching out to a professional accountant. Our team is here to help you navigate these responsibilities seamlessly, ensuring peace of mind and allowing you to focus on growing your business. Feel free to contact us for further information or assistance.

Starting a sole trader business

7 October 2025

Thinking of starting your own sole trader business? The Sole Trader Toolkit from the Ministry of Business, Innovation and Employment has all the basic advice you might need.