Fixed-term versus permanent jobs in NZ: what to check before you accept

What makes a fixed term genuinely lawful

Under section 66 of the Employment Relations Act 2000, an employer may only agree a fixed term if it has genuine reasons based on reasonable grounds. Employment New Zealand's examples include covering a permanent employee's parental leave, seasonal work such as fruit-picking, and a one-off project. The employer must tell you when or how the job will end and why, and both must be written into the agreement.

Some reasons are ruled out. A fixed term cannot be used to see whether you are suitable for a permanent role, and it cannot be used to limit your rights. Employment New Zealand is clear that employers must not use a fixed term instead of a trial or probationary period.

If the fixed-term clause does not meet these rules, the employer may not rely on it if you choose to treat it as ineffective, and Employment New Zealand notes that you may be able to raise a personal grievance for unjustified dismissal, which must be raised within 90 days. Our guide to job offers and employment agreements explains how to read the clause before you sign.

Leave, KiwiSaver and notice on a fixed term

Fixed-term employees have the same rights as permanent employees, with one exception. If the fixed term is for less than 12 months, you and the employer can agree to have your annual holidays paid as you go, as at least 8% of your gross pay added to each pay or paid at the end, instead of giving you four weeks of paid leave.

• Sick leave applies after six months of continuous employment, as it does for anyone.
• Public holidays are paid when they fall on a day you would otherwise work.
• KiwiSaver works as it does for any employee. Temporary jobs of 28 days or less usually do not have to be automatically enrolled, which does not apply to a 12-month term.
• Notice matters if either side wants to end the job before the date. Check what the agreement says, because a fixed term does not automatically include a way out early.

These rules apply until August 2028, when the Employment Leave Act 2026 replaces the Holidays Act. Our guide to employment rights in New Zealand covers the rest.

Renewal patterns and the permanent conversion

Many fixed terms are renewed, some more than once. A renewal is a new fixed term, so the same test applies: there must be a genuine reason for the new end date. Employment New Zealand notes that if the work carries on indefinitely, a fixed-term employee may in fact become permanent.

If you are offered a fixed term with a hint that it could become permanent, ask about it directly: "How often have roles like this become permanent, and what would that depend on?" If the answer is vague, plan for the end date.

Comparing a 12-month fixed term against a permanent offer on take-home

Fixed-term roles sometimes pay more than permanent ones, to make up for the uncertainty. Whether that premium is worth it depends on how long you might be out of work when the term ends.

Take a 12-month fixed term at $85,000 against a permanent role at $80,000. At 2026/27 rates, on tax code M, with ACC at 1.75%, KiwiSaver at 3.5% and no student loan, $85,000 is about $62,610 a year after tax, or $2,408 a fortnight, and $80,000 is about $59,523, or $2,289 a fortnight. The fixed term pays about $3,088 more over the year, which is about two and a half weeks of its take-home. If finding the next job after it ends takes longer than that, the permanent role comes out ahead on money alone.

The Offer Comparer works out the take-home side of two offers at 2026/27 rates, including employer KiwiSaver, a bonus, health insurance and a vehicle, with no account needed. Add the gap you think is realistic yourself.

Planning the next hunt from month nine

If you take the fixed term, treat the last quarter as the start of your next search. Around month nine, ask your manager whether the role is likely to be extended or made permanent, and ask early enough that the answer still leaves you time to act.

Update your CV with what you achieved in the role while the details are fresh, let the recruiters you trust know when you will be available, and start saving ads for the kind of role you want next. A fixed term with a known end date is one of the few situations where you can plan a job hunt properly in advance.

Put both offers on the same page