Unpaid overtime: how to work out your real hourly rate

Salaried does not mean unlimited

A salary is a fixed amount for the hours your employment agreement sets out. Many agreements also ask for "reasonable additional hours" as the work requires, and overtime can be built into a salary, but only if the agreement says so. There is no automatic overtime rate in New Zealand; any extra pay has to be agreed.

There are limits, though. Every hour you work must be paid at least the minimum wage, which is $23.95 an hour for adults from 1 April 2026, and that applies to overtime as much as to normal hours. Employment New Zealand's rough check for salaried staff is to divide your pay by the hours you actually worked in a pay period. If the answer is below the minimum wage, you are very likely being underpaid.

It happens more easily than it sounds. A salary of $55,000 is $2,115.38 a fortnight. Over a fortnight of 100 hours, two 50-hour weeks, that is $21.15 an hour, below the minimum wage.

Recording your actual hours for a month

You cannot argue with a feeling that you work too much. You can argue with a record. For four weeks, write down when you start and finish each day, your breaks, and any work done at home, in the evening or at the weekend, such as emails, calls and reading. Use a notebook or a note on your phone, and write it at the time rather than from memory.

Your employer has records too. For salaried staff, it must record extra hours where that is needed to show you are paid at least the minimum wage, and you can ask to see your wages and time record at any time. It must give you access immediately. Comparing the two records is often revealing.

Salary divided by real hours, after tax

With a month of hours, work out your average week, then your real hourly rate. Use take-home pay, because that is what your time actually earns you. At 2026/27 rates, after PAYE, ACC and KiwiSaver at 3.5%:

Ten unpaid hours a week cut the real rate by a fifth. Our article on hourly rates and salaries covers converting between the two.

Comparing that rate with the market

Now compare your real hourly rate with what similar jobs pay for their stated hours. If ads for your role pay $75,000 for a genuine 40-hour week, and you work 50 for the same salary, you are effectively being paid about $60,000 for 40 hours. That is the number to take into a pay conversation or a job search. Our article on whether you are being underpaid covers how to find the market rate.

Look at the pattern, too. Occasional busy weeks are part of many jobs. A permanent 50-hour week, with no time off in lieu and no end in sight, is worth checking against what your agreement actually says about additional hours.

Raising it, or pricing it into the next move

If you want to stay, raise it with your manager, using your record: the average hours, the causes, and a proposal, such as more resource, reduced scope, time off in lieu, or a salary that reflects the hours. If your hours put your pay below the minimum wage, that is a breach of minimum entitlements. You can report it to the Labour Inspectorate on 0800 20 90 20, or recover the arrears, which can go back six years, through the Employment Relations Authority. Our guide to employment rights in New Zealand covers the process.

If you decide to move, use the real rate in your next negotiation, and ask about typical hours before you accept. In jobtracker.co.nz, Your Career keeps your pay over time and what it is worth after prices, ready to set against the hours you record yourself. You can see a worked example in the demo, which needs no account.

Keep your pay on record