Public sector versus private sector careers in New Zealand

Pay bands versus market pay

Public service agencies generally set pay bands for each role, and some have steps inside the band. Many agencies show the range in the ad, a practice they were asked to adopt under Kia Toipoto, the pay gaps action plan that ran from 2021 to the end of 2024. The same guidance asked agencies to remove salary negotiation from the process, so there may be less room to negotiate than in a private offer.

Private employers are freer. Pay follows the market, what the business can afford and what you negotiate, so the spread is wider in both directions. A strong negotiator in a profitable company can do much better than a public band. The same person in a struggling business may do worse, with less visibility of what colleagues earn.

The published figures need care. The Public Service Commission reports an average public service salary of $103,300 and a median of $90,200 at 30 June 2025, full-time equivalent. That is higher than the private sector average it quotes, about $85,700, but the two measures cover different mixes of jobs, so they are not like for like. A median salary of $90,200 takes home about $65,821 a year at 2026/27 rates. These figures cover government departments in the Public Service, not councils, hospitals, schools or most Crown entities.

Pay rises since 2024

The bigger recent difference is how pay moves. The government's 2024 workforce policy statement says public sector pay outcomes should be fiscally sustainable and should not lead the labour market. Since December 2024, departments have been told to keep growth in staff costs within forecast inflation, with no new pay progression based on time served.

The effect shows in the data. The average public service salary rose 1.6% in the year to June 2025, the equal lowest rise since records began in 2000, while private sector average earnings rose 4.6%. If you are weighing a public sector offer, assume increases will be modest for now, and value the offer on its starting point rather than on hoped-for rises.

Leave, KiwiSaver and flexibility

Both sectors must meet the same legal minimums: four weeks of annual holidays, public holidays, ten days of sick leave after six months, and, for KiwiSaver members, an employer contribution of at least 3.5% of gross pay (3% if you have chosen a temporary rate reduction), rising to 4% on 1 April 2028. Some public sector roles are covered by collective agreements, which can add extra leave, allowances or set rules on hours, so ask for the collective or the individual agreement and read it.

A small group of long-serving public servants, 6.9% in 2025, are in the older State Sector Retirement Savings Scheme, which closed to new members in 2008; new starters get KiwiSaver. Check whether an offer in either sector is a total remuneration package with KiwiSaver inside the figure, or on top of it.

Flexibility varies more by team than by sector. Any employee can make a flexible working request from their first day. Ask each employer what hybrid and flexible arrangements its people actually use, not just what the policy allows.

Job security and restructures

The public sector has a reputation for security, and in normal times most roles are permanent: 95.4% of public service employees were on permanent contracts in 2025. That reputation took a knock in 2024 and 2025. As agencies cut costs, 1,533 public service employees were made redundant in the year to June 2025, the highest number since measurement began in 2000.

So judge security by the organisation rather than the sector. Look at the agency's funding, any recent change proposals, and whether the role is fixed-term. A private company with a strong order book may be steadier than an agency facing budget cuts, and the reverse is also true.

Culture, pace and scoring the two

Public sector work often moves more slowly, with more consultation, written process and ministerial priorities that can change direction. Many people value its purpose and its structured development. Private sector work is often faster and more commercial, with quicker decisions and more reward for results. Applications differ too: some public sector roles ask you to address each selection criterion. Our guide to public sector applications covers how.

When you have an offer from each, compare them on what reaches your account first. The Offer Comparer sets two offers side by side after tax, with employer KiwiSaver, a bonus, health insurance and a vehicle, and needs no account. Then score both against your own priorities: security, flexibility, purpose, progression and pace. Our article on comparing two job offers walks through the rest.

Weigh the two offers on the same scale