How we calculate pay rates for the AEWV
When you apply for a job check we may look at your proposed employment agreement and the information you supply in the application form to calculate the worker's hourly rate (pay rate).
Calculating pay rates
To determine the pay rate, we calculate how much the employee will be paid an hour. During the job check, we base this calculation on your proposed employment agreement and/or the information you provide in the job check application.
For the job to meet the minimum pay threshold, the average guaranteed pay for each hour of work within a pay period, including any paid leave, must be at or above that threshold.
Some accredited employers may need to change their employment agreement to meet the pay thresholds.
Hourly rate
If someone is paid an hourly rate, for example NZD $25.50 an hour, we use that to calculate their pay rate.
Wage for standard hours and a different rate for overtime hours
If someone is paid a wage for standard hours and a different rate for any extra hours they work, such as overtime or weekend hours, we use the lowest hourly rate to calculate their pay rate. If the extra hours and pay are guaranteed they can be averaged within a pay period.
Cynthia is paid:
- NZD $25.50 an hour for 40 hours of work each week, and
- NZD $30.00 an hour for any additional hours she works.
Based on this information, her pay rate will be calculated as NZD $25.50 an hour.
This hourly rate would increase if Cynthia was guaranteed to be paid for at least 5 overtime hours each week.
Salary
We may ask for evidence of the range of hours someone will work.
Salary for a set number of hours
If someone is paid a salary for a set number of hours each week, we divide their salary by the number of hours they work to calculate their pay rate.
John is paid NZD $53,040.00 each year for 40 hours of work a week.
The calculation is: $53,040.00 ÷ 52 weeks ÷ 40 hours each week = $25.50 an hour.
Salary for a range of hours
If someone is paid a salary for a range of hours each week, we divide their salary by the maximum number of hours they could work to calculate their pay rate.
Karen is paid NZD $59,670.00 a year for 40 to 45 hours of work a week.
The calculation is: $59,670.00 ÷ 52 weeks ÷ 45 hours each week = $25.50 an hour.
Salary for hours changing each week
If someone is paid a salary and their hours change each week, we use the lowest hourly rate to calculate their pay rate.
Sam is paid NZD $99,840 a year, and usually works 52 hours each week, except for 8 weeks when he works 64 hours each week.
The calculation to find his lowest hourly rate is: NZD $99,840 ÷ 52 weeks ÷ 64 hours each week = NZD $30 an hour.
We may ask for evidence of the range of hours someone will work.
Salary with hourly rate for overtime
If someone is paid a salary with an hourly rate for additional work like overtime, we check what the hourly rate would be for their salary, what the hourly rate is for overtime, and use the lowest hourly rate (averaged within a pay period) to calculate their pay rate.
John is paid NZD $65,250 each year for 40 hours of work a week, and NZD $37.50 per hour for overtime
The calculation to find his lowest hourly rate is: $65,250 ÷ 52 weeks ÷ 40 hours each week = NZD $31.37 an hour.
Piece rates
An employee is paid piece rates if they are paid a fixed amount for every item they produce, no matter how long it takes them to produce it.
Piece rates are not included when we calculate pay rates for AEWV, unless there is a guaranteed top up to ensure a pay threshold is met. This includes all performance payments and commissions.
Sarah is paid a base rate of NZD $25 an hour with additional piece rates.
We calculate Sarah's pay as NZD $25 an hour. But if her employment agreement includes a guarantee that her pay will be topped up to NZD $29.66 in each pay period in case she does not earn enough piece rates to meet the median wage threshold, then we will calculate her pay as NZD $29.66 an hour.
Tim is a meat worker on piece rates with a guaranteed top-up payment. He is paid a base rate of NZD $20 an hour, and 10c for every carcass processed (calculated on a per shift basis).
His employment agreement includes a guarantee that his pay will be topped up if he does not process enough carcasses to earn the equivalent of NZD $29.66 an hour across the pay period.
Tim works 40 hours in one week, and processes 2,600 carcasses. His total pay before top up is NZD $1,060 (NZD $26.50 an hour). The employer tops up his pay to NZD $1,186.40 (NZD $29.66 an hour).
Variable rates within a pay period
If someone is paid different rates within a pay period, but those rates and hours are guaranteed, we will average the pay across the pay period.
George is paid per fortnight and is required to work 10, 8-hour shifts per fortnight. He is guaranteed these hours and pay rates:
- 6 day shifts paid at NZD $29 an hour
- 4 night shifts paid at NZD $32 an hour.
The calculation is (6 x 8-hour shifts at NZD $29 an hour = NZD $1,392) + (4 x 8-hour shifts at NZD $32 an hour = $1,024) = NZD $2,416 per fortnight, averaged across 80 hours = NZD $30.20 an hour.
Including deductions in pay rate calculations
When we calculate someone's pay rate, we include reasonable, agreed deductions. For example, for accommodation, goods and services.
The pay rate calculation does not include:
- allowances, such as tool or uniform allowances, or
- bonuses, which are dependent on performance.
If you provide accommodation as part of the employment package, and if the deduction is reasonable and agreed in writing, the cost of the accommodation is included when we calculate the pay rate.
Help for employers
Our employer helpline is open between 08:00 and 18:00, Monday to Friday.
Freephone from New Zealand landlines: 0508 967 569