New Zealand Gender Pay Gap Reporting: What You Need to Know

New Zealand’s Pay Gap Toolkit suggests that employers include all employees who have an employment agreement, including executives, fixed-term, and part-time employees, in their voluntary pay gap reporting. Contractors or anyone else who is paid by the organisation but does not have an employment agreement are excluded.

For employers who wish to voluntarily comply, the voluntary calculation should include total cash pay (remuneration) over a 12-month period (e.g., base pay including any salary sacrifice amount, fixed pay, variable pay, overtime, extra pay and allowances like shift differentials and on-call pay, bonuses, commissions, profit sharing or equity payments, KiwiSaver contributions, cash allowance, and any other cash paid). Non-montetary benefits, such as carparks, are excluded. More information is available in New Zealand’s Pay Gap Toolkit.

New Zealand’s Pay Gap Toolkit focuses on gender pay gaps for the voluntary report, but there have been calls for the New Zealand government to also focus on race and ethnicity gaps. 

Syndio’s PayEQ software allows you to analyze pay equity and opportunity gaps across multiple dimensions, including race, gender, ethnicity, age, disability, and more. This provides a comprehensive understanding of how different groups are affected by your policies and practices.

Many of the pay reporting laws around the world analyze pay gaps, not pay equity. This is the case with the voluntary reporting system in New Zealand, which focuses on median pay gaps. What’s the difference? 

An unadjusted pay gap (also called an “uncontrolled pay gap”) is the difference between the median or mean pay of two groups, such as men and women.

• Median pay gap: Imagine lining up all the earnings for two groups of employees (e.g., men and women) from lowest to highest. The median pay gap is the difference between the middle earnings in each line. It’s a good indicator of typical pay differences.
• Mean pay gap: This compares the average earnings of each group. However, it can be skewed by extremely high or low earners.

Pay equity, or the adjusted pay gap, accounts for factors that can legitimately explain differences in pay, such as performance ratings, tenure with the company, or location.

The median and mean pay gaps provide valuable insights, but they don’t tell the whole story. There may be legitimate reasons for pay differences between employees. The adjusted pay gap (pay equity) accounts for these factors, revealing whether a pay disparity truly exists (which is unlawful in many countries) so you can take corrective action. Syndio’s PayEQ software is the trusted solution for global enterprises to rapidly identify, address, and prevent pay disparities.