Employee vs contractor

Employee.You work under a written employment agreement. The employer deducts PAYE tax, KiwiSaver and ACC from your pay. You accrue annual leave, public holidays, sick leave, and bereavement leave. You're paid at least the minimum wage for all hours worked. You have access to the Employment Relations Authority if things go wrong.

Contractor.You run your own business, even if it's just you. You invoice the operator for your work. You handle your own tax (provisional + GST if you earn over $60,000), your own ACC levies, your own insurance, your own leave (i.e. when you don't work, you don't earn). You don't get personal grievance rights.

A lot of NZ outdoor operators prefer contractor arrangements because they shift cost and risk to the worker. That isn't always wrong — genuinely independent freelance instructors are legitimately contractors. But it's misused. If your work pattern looks like an employee (set hours, the operator's gear, the operator's clients, no real ability to refuse or substitute), you may actually be an employee in law — and you have rights even if the contract says otherwise.

Courts look at the substance of the relationship, not the label on the contract. The factors that push toward employee status:

• You can't send someone else in your place (no substitution right).
• The operator sets your hours, your roster, your uniform.
• You use the operator's equipment, vehicles, and premises.
• You're paid an hourly or daily rate, not a project fee.
• You only work for this operator, or are expected to give them priority.
• You're integrated into the operator's team — staff briefings, training days, performance reviews.

Factors that push toward genuine contractor status: you have multiple clients, you use your own gear, you set your own price, you can subcontract the work, you carry your own insurance, you advertise your services.

Many new instructors are offered a contractor day rate that sounds higher than an employee rate — “we pay $400 a day” vs “$28 an hour.” Before you accept, subtract: ACC levies (~1–2%), tax (~17–33%), GST if applicable, your own insurance (~$1,200/year for public liability), zero paid leave, zero sick days, zero KiwiSaver employer contribution. The same gross often nets less than the employee equivalent.

• Is there a real reason this is contractor and not employee? (If they can't answer, the answer is usually 'to save us money.')
• Can I genuinely send a qualified substitute? (If no, you're probably an employee.)
• Am I free to work for other operators in the same season? (If they say no, that's an employee-style restraint.)
• Will I be on the same induction/training as employee staff? (If yes, you're being treated like an employee.)
• What's the day rate vs the equivalent employee rate? Run the numbers.

• Register for IRD as self-employed (free, online).
• Keep records of every invoice and every business expense.
• Set aside ~30% of every payment for tax. Don't spend it.
• Pay provisional tax in instalments after your first year (IRD will tell you when).
• Register for GST if your annual turnover exceeds (or will exceed) $60,000.
• File an annual ACC levy — your CoverPlus rate depends on your activity classification.
• Carry your own public liability insurance ($5m+ is the sector norm) and consider professional indemnity.
• Keep a paper trail of every job offered, accepted, completed, and invoiced.

A “casual” employee is still an employee — gets PAYE, leave (paid out on each paycheck at 8% if genuinely casual), and minimum wage. The difference is no guaranteed hours. Casual is the most common arrangement for school-programme assistant instructors and weekend work, and it's usually the safer offer to accept if contractor doesn't fit your situation.

• Restraint of trade clauses — can you really not work for any other operator in the region?
• Termination — how much notice do they have to give you, and you them?
• Cancellation — if the trip is cancelled by weather or low bookings, do you still get paid?
• IP and equipment — what happens to gear you provide, photos you take, course materials you write?
• Liability — are they pushing all on-job liability onto you? That's a red flag for any operator covered by Adventure Activity Regs.