Sick leave in New Zealand: What employers must provide

Published Wednesday 15 July 2026

Table of contents

• What is sick leave in New Zealand?
• Who is eligible and when does it start?
• How many paid sick days do you need to provide?
• What can employees use sick leave for?
• Can an employee take sick leave in advance?
• How do you pay sick leave correctly?
• What happens when a sick employee also has an ACC claim?
• When can you ask for proof and how do you keep records?
• Simplify sick leave compliance with Xero
• FAQs on sick leave in New Zealand

Key takeaways

• All eligible employees in New Zealand are entitled to a minimum of 10 days of paid sick leave per year, with up to 10 days carry-over to a maximum of 20 days, and this entitlement is not pro-rated for part-time workers.
• Eligibility for sick leave begins after 6 months of continuous employment or when an employee meets the alternative hours test of averaging 10 hours per week with at least 1 hour per week or 40 hours per month over 6 or 12 months.
• Employees can use sick leave for personal illness or injury, to care for a dependant, for medical appointments related to illness when they cannot reasonably be scheduled outside work hours, and for mental health conditions that prevent them from working.
• You can ask for a medical certificate or proof of illness after three consecutive calendar days of sick leave, or earlier if you agree to cover the reasonable costs of obtaining it.

What is sick leave in New Zealand?

Sick leave is a legal entitlement that lets employees take paid time off when they're unwell or injured, or when they need to care for a dependant who is sick. It's a core part of employment law in New Zealand, designed to protect employee wellbeing and ensure people can recover without financial stress.

The Holidays Act 2003 sets out the rules. Every employer must provide sick leave to eligible employees, track balances accurately, and pay staff correctly when they take time off. Getting it right protects your business from compliance issues and builds trust with your team.

For the latest updates and official guidance, visit Employment New Zealand.

Who is eligible and when does it start?

Employees qualify for sick leave once they meet the required service and hours criteria. Eligibility depends on how long someone has worked for you and how many hours they've put in.

The 6-month continuous service rule

Most employees become entitled to sick leave after six months of continuous employment with your business. This applies to full-time, part-time, fixed-term, and casual staff, as long as they've worked for you without a break for six months.

The alternative hours test

If an employee hasn't completed six months of continuous service, they may still qualify if they've worked:

• an average of 10 hours per week, and
• at least one hour per week or 40 hours per month

over the previous six months or 12 months.

This hours test ensures that regular casual or part-time workers aren't excluded simply because their employment pattern doesn't fit a traditional full-time schedule.

Confirming sick leave entitlement NZ

When onboarding new staff, track their start date and hours worked so you can confirm when their sick leave kicks in after six months. Clear records make it easier to answer questions and avoid disputes.

For more on your responsibilities when hiring, see this guide on employer responsibilities.

How many paid sick days do you need to provide?

Once eligible, employees are entitled to 10 days of paid sick leave per year. This is a minimum entitlement set by law – you can offer more if you choose, but you cannot offer less.

Carry-over and the 20-day cap

Unused sick leave carries over to the next year, up to a maximum of 20 days. This means an employee who doesn't use any sick leave in year one will have 20 days available in year two (10 from year one plus 10 from year two). Once they hit the 20-day cap, no further days accumulate until they use some of their balance.

No pro-rating for part-time workers

Sick leave entitlement in NZ is not pro-rated based on hours worked. A part-time employee working 15 hours per week gets the same 10 days per year as a full-time employee working 40 hours per week. The difference is in how much they're paid for each day, not how many days they receive.

Unused sick leave is not paid out

When employment ends, any unused sick leave balance is not paid out. It simply expires. This is different from annual leave, which must be paid out on termination.

Key point: Keep accurate records of sick leave balances and remind employees of their entitlement. This transparency supports good employee relations and ensures you're meeting NZ sick leave rules at all times.

What can employees use sick leave for?

Sick leave isn't just for when someone has the flu. The law recognises several valid reasons for taking sick leave, and it's important you understand them so you can respond fairly and consistently.

Cover personal illness or injury

Employees can use sick leave when they're too unwell or injured to work. This includes physical illness, injury, and mental health conditions such as stress, anxiety, or depression that prevent them from performing their duties.

Cover care of a spouse or partner, child, or dependant

Sick leave can also be used to care for a spouse, partner, dependent child, or other dependent who is sick or injured. A dependant is someone who relies on the employee for care – this could be an elderly parent, a disabled family member, or a child.

Cover medical or dental appointments tied to illness or injury

If an employee needs to attend a medical or dental appointment related to an illness or injury, and the appointment cannot reasonably be scheduled outside of work hours, they can use sick leave. Routine check-ups or elective appointments that could be rescheduled generally don't qualify.

Cover illness related to stress or mental health that prevents work

Mental health is just as important as physical health. If an employee is experiencing stress, burnout, or another mental health condition that stops them from working, they are entitled to use sick leave. Treat these requests with the same seriousness and confidentiality as any physical illness.

How to handle part-days and appointments fairly

Employees can take sick leave in part-day increments. For example, if someone needs to leave early for a medical appointment, you deduct only the portion of the day they were absent – not a full day. Be clear about how you record and pay part-days to avoid confusion.

Practical tip: Set a clear policy on what counts as a valid reason for sick leave and communicate it during employee onboarding. This reduces misunderstandings and helps employees feel supported when they need time off.

Can an employee take sick leave in advance?

You can choose to grant sick leave before an employee has accrued their full entitlement. It’s not mandatory, and the law leaves it up to you. If you do agree to advance sick leave, take these steps to protect your business:

1. Confirm it in writing. Record the agreement in writing so both parties are clear on the amount advanced and the terms.
2. Agree on repayment terms. If the employee leaves before accruing the leave taken, you may be able to deduct the advance from their final pay, but only if this is agreed in writing beforehand.
3. Update your records. Adjust the employee's sick leave balance immediately so your payroll records stay accurate.

For more information on offering advanced sick leave, see this Ministry of Business, Innovation & Employment (MBIE) page.

How do you pay sick leave correctly?

Paying sick leave correctly is a legal requirement and a key part of getting payroll right. The amount you pay depends on whether the employee has regular, predictable hours or variable hours.

Calculate pay using ordinary daily pay

Ordinary daily pay is the amount the employee would have earned if they had worked on the day they took sick leave. Use this method when an employee works regular, predictable hours with a consistent pay structure.

Follow these steps:

1. Identify what the employee would have earned on the day they took sick leave,
2. Include their regular hourly rate, salary, and any regular allowances (such as a tool allowance or site allowance).
3. Include predictable overtime if the employee regularly works overtime on that day of the week.
4. Pay that amount for the full day, or the agreed portion if they took a part-day.

Example: Sarah works Monday to Friday, 8 hours per day at $25 per hour, plus a $50 weekly site allowance. On a sick day, her ordinary daily pay is (8 × $25) + ($50 ÷ 5) = $210.

If an employee takes half a day off sick, record a deduction of 0.5 days from their balance and pay them for half their ordinary or average daily pay.

Calculate pay using average daily pay

Average daily pay is used when an employee's hours or pay vary from week to week, making it difficult to predict what they would have earned on a given day. This is common for casual, part-time, or shift workers.

Follow these steps:

1. Calculate the employee's gross earnings over the last 52 weeks (or their total period of employment if less than 52 weeks).
2. Divide that total by the number of whole or part days the employee was paid during that period.
3. Apply that average rate to the sick day or part-day taken.

Example: Tom earned $36,400 over 52 weeks and was paid for 200 days during that time. His average daily pay is $36,400 ÷ 200 = $182. If he takes one sick day, he receives $182.

Public holidays and sick leave

If a public holiday falls on a day the employee would normally work, and they are already off sick, pay them public holiday pay, not sick leave. Do not deduct a sick day from their balance.

Here’s more information on how to do payroll.

What happens when a sick employee also has an ACC claim?

Accident Compensation Corporation (ACC) provides weekly compensation to employees who are injured and unable to work. When an employee's absence is covered by ACC, sick leave and ACC compensation apply in a specific sequence.

Here's how it works:

1. Week 1: The employee uses their sick leave entitlement as normal. Pay them using ordinary daily pay or average daily pay, as you would for any sick day.
2. From week 2 onwards: ACC weekly compensation applies. ACC pays 80% of the employee's pre-injury earnings directly to them. You're no longer required to pay sick leave for this period.
3. Top-up pay (optional): You can agree to top up the employee's pay to bring it closer to their full earnings. This is not a legal requirement – it's a matter of agreement between you and the employee.

Keep a record of when the ACC claim starts so you can accurately update the employee's sick leave balance and avoid overpaying. For more detail on ACC entitlements, visit the ACC website.

When can you ask for proof and how do you keep records?

You have the right to ask for proof that an employee's sick leave is genuine, but there are rules about when and how you can do this.

When you can require a medical certificate

You can ask for a medical certificate or other proof of illness or injury after an employee has taken three consecutive calendar days of sick leave. This includes weekends and public holidays. So if someone is off Thursday, Friday, and Monday, that's three consecutive days.

When you can ask earlier

You can ask for proof earlier than three days if you agree to pay the reasonable costs of obtaining it. For example, if you ask for a certificate after one day, you must cover the GP visit fee and any certificate charge. Make this clear in your sick leave policy.

What sick leave records an employer should keep

To stay compliant and protect employee privacy, keep the following records:

• Accurate sick leave balances for each employee, updated after every instance of sick leave taken.
• Dates and duration of sick leave taken, including part-days.
• Medical certificates and other proof, stored securely with access limited to authorised personnel only.
• Patterns of sick leave use to help you plan staffing and identify when an employee may need additional support (such as a return-to-work plan or referral to occupational health).

Medical information is sensitive personal data, so be diligent about privacy and security. Store certificates in a secure location (physical or digital), limit access to HR or payroll staff only, and never share medical details without the employee's consent.

Use your payroll or HR system to track balances and store certificates in one place. This makes it easier to respond to employee queries, stay audit-ready, and ensure you're meeting sick leave law requirements.

For more on compliance and record-keeping, see this guide on small business bookkeeping.

Simplify sick leave compliance with Xero

Managing sick leave balances, calculating the right pay, and storing certificates can quickly become time-consuming, especially as your team grows. Xero helps you handle sick leave administration with less manual work and greater accuracy.

• Automate balances and track entitlements. Xero automatically tracks each employee's sick leave balance, accrual, and usage, so you always know where everyone stands without needing spreadsheets or manual calculations.
• Calculate ordinary or average daily pay correctly. Whether your employees work regular hours or variable shifts, Xero calculates the right pay rate for sick leave based on their earnings history, reducing errors and ensuring compliance with NZ sick leave rules.
• Store certificates and records in one place. Upload and store medical certificates, sick leave requests, and related documents securely within Xero, making it easy to access records for audits, employee queries, or compliance checks.

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FAQs on sick leave in New Zealand

Here are quick answers to common sick leave questions for NZ employers:

What is the new law for sick leave in New Zealand?

In July 2021, the minimum sick leave entitlement in NZ increased from five days to 10 days per year. The maximum carry-over also decreased from 15 days to 10 days to ensure the limit remains at 20. All employers must provide at least 10 days of paid sick leave annually to eligible employees.

The government is developing new leave legislation to replace the Holidays Act 2003. Until the bill is passed, the existing Holidays Act remains in place.

How many days can an employee be off sick without a doctor's certificate?

An employee can take up to three consecutive calendar days of sick leave without being required to provide a medical certificate. After three consecutive days, you can ask for proof. If you want proof earlier, you must cover the reasonable cost of obtaining it.

Do casual employees get sick leave?

Yes, casual employees can qualify for sick leave if they meet the eligibility criteria. They must have worked for you for six months continuously, or meet the alternative hours test (an average of 10 hours per week and at least one hour per week or 40 hours per month over six or 12 months).

Is sick leave pro-rated for part-time workers?

No. Sick leave is not pro-rated based on hours worked. A part-time employee receives the same 10 days per year as a full-time employee. The difference is in the pay rate for each day, which is calculated using ordinary daily pay or average daily pay depending on the employee's work pattern.

Can unused sick leave be paid out when employment ends?

No. Unused sick leave is not paid out when employment ends. It simply expires. This is different from annual leave, which must be paid out on termination.