Working 9 to 5
Why salaried workers, can run in to trouble with immigration thresholds.
This week the world farewelled a music legend - Dolly Parton, who died on 25 August at the age of 80. Much has rightly been said about her extraordinary career, her philanthropy, her humour and her ability to remain unmistakably herself through decades in an industry that is not always especially forgiving of that sort of thing. She was once quoted on NZ radio as saying she had to get rich, in order to sing like she was poor…I personally love that statement, being a very big music fan myself.
Beyond her musical legacy, Dolly also gave us perhaps the most famous shorthand for the working day: 9 to 5. More than 45 years after the song was released, we still use the phrase even though a very large number of people no longer actually work nine to five (or remotely near it).
That is particularly true for salaried professional employees and this is where the link between a country music legend and the NZ visa process will hopefully start to become clear.
A project manager on $90,000 a year is employed to manage projects. An accountant is employed to deliver accounts. A manager is employed to manage. Their employment relationship is generally built around performing a role, rather than selling their employer a precisely measured number of hours every week in exchange for payment for each of those hours.
Their employment agreement might say 40 hours a week. It might say 40 hours plus additional hours as reasonably required. It might provide a range of hours. In practice, they may work longer one week and shorter the next. My employment agreement reflects a 40-hour per week engagement, but I can’t remember the last time I worked only 40 hours.
For most people, none of this is especially remarkable, except when you are a migrant and Immigration New Zealand asks someone on a salary, what they might be earning per hour. Suddenly, Dolly’s old nine-to-five working day becomes surprisingly relevant.
New Zealand’s skilled residence system and our Accredited Employer Work Visa’s use hourly wage thresholds in a number of places. Under the Skilled Migrant Category, wage thresholds are based on the median wage, currently $35 per hour, although the actual threshold an applicant must meet depends on the pathway, occupation and, in some cases, when their qualifying New Zealand work experience began. AEWV’s require applicants to earn a minimum hourly rate, regardless of whether they are paid wages or a salary.
For someone genuinely paid by the hour, that is easy math. For somebody paid an annual salary, things can get considerably more complicated.
The Practical Problem
The complication over using hourly rates, and trying to wedge them in to an annual salary is something we see all the time. Take an employee earning $90,000 a year. If their salary is based on a fixed 40 hours a week, the effective hourly rate is about $43.27 and that is nice and clean.
However, if the maximum contracted hours are 45 hours a week, that same salary produces an hourly rate of about $38.46. At 50 hours, it drops to about $34.62. Nothing else has changed and it is the same person, same salary and the same job.
Yet the immigration result can be dramatically different.
Wages vs. Salaries
INZ’s desire to use an hourly rate calculation to measure skill and set eligibility criteria, doesn’t always work with the real world and can create potential issues for applicants.
For context, the current SMC threshold for many ANZSCO skill level 1 to 3 roles under the points-based pathway is $35 per hour. It is likely to increase in early 2027 as the median wage is monitored and adjusted by Statistics New Zealand, and generally rises one or twice a year.
The Skilled Work Experience pathway currently requires 1.1 times the SMC threshold, or $38.50 per hour, with some Amber List occupations requiring $42 per hour.
That means our hypothetical $90,000 salary could comfortably meet one immigration threshold when calculated over 40 hours, narrowly miss another when calculated over 45 hours, and fall below the basic $35 threshold if calculated over 50.
Immigration New Zealand specifically tells salaried applicants to use the maximum contracted hours stated in their employment agreement when calculating their hourly pay rate. That creates a particular problem with the way many professional employment agreements are drafted and in fact means Immigration New Zealand are often dictating employment terms to employers that generally don’t exist and aren’t legally required to be there.
A contract may contain perfectly ordinary wording allowing an employer to require additional hours from time to time. This scenario is pretty common, for those earning higher salaries in professional roles. The expectation is that the employee is paid to do a job and if that job needs a few hours extra per week to be done, then the annual salary compensates for that extra work.
In immigration instructions, variable hours and the maximum number of hours that may be worked can become relevant to calculating remuneration, the hourly rate and whether that extra work, sinks an applicant below the required threshold. The result is that wording an employer may regard as standard contractual practice, all perfectly legal, can have a very different significance when an immigration application is prepared.
You can have an employer looking at the contract and thinking, “We are paying this person $90,000.”
You can have the employee thinking, “I earn $90,000.”
And yet all the while you can have immigration policy sitting quietly in the corner, asking how many hours we are dividing that by. If the hours in one week go beyond that math, and lower the hourly rate, the entire eligibility for that applicant can come under scrutiny and yet nothing materially has changed in terms of skills, experience or the value that applicant brings to the equation.
Why Use Hourly Rates At All?
There is of course a perfectly understandable logic behind using hourly rates in immigration policy, even if it might not square well with the real world.
Immigration New Zealand needs objective ways of deciding whether employment is sufficiently skilled for particular residence pathways. They also want to make sure that what a person is being paid, is not being paid in a way that means they are working excessive hours, just to reach a particular salary level. There is a difference between someone earning $90,000 a year and working 40 hours a week and another earning the same salary, but grinding away for 60 hours a week. Exploitation and avoid it, plays a role in all of this. Ultimately salary and hourly rates provide something that can actually be measured.
It also creates a safeguard against relying entirely on job titles to determine skill levels as well and for many years arguments would ensue over whether an applicant was or was not skilled, based on comparing their job to the relevant ANZSCO code and description. The ability to use salary as a proxy for skill has become increasingly important to INZ, and its ability to swiftly process applications, because job titles can be wonderfully creative things.
Hourly Rate Obsession
Using hourly rates, makes it far easier for INZ to quantify an applicant’s income and potentially skill level, as well as as protecting against exploitation.
Calling somebody the “Regional Director of Strategic Operations” tells us considerably less about the true nature of their job if they are earning minimum wage and have no regional, strategic or operational responsibilities to speak of.
Pay can therefore provide useful evidence that a role carries the responsibility, experience or scarcity we would ordinarily associate with skilled employment.
The problem arises however when a useful indicator starts being treated as though it is a precise measure of skill, because ultimately it is not - labour markets are a lot more complicated and messier than that.
Different industries pay very differently for comparable levels of qualification and responsibility. Regional pay can vary, particularly as you head further south down the country, based on cost of living expectations. Some professions require years of training but are not especially highly paid. Other jobs attract substantial salaries because experienced workers are scarce or because the commercial value of those skills is particularly high.
Then there is the basic problem that much of New Zealand’s skilled workforce is in fact salaried. The labour market says, “This job is worth $90,000 a year.” and yet immigration policy replies, “Fine. But what is that per hour?”
That conversion may be administratively convenient in terms of being able to process an application and fit an applicant in to a nice neat box, but it can create strange results when eligibility starts turning on the wording of the hours clause rather than any meaningful difference in the employee’s skill or contribution.
To its credit, Immigration New Zealand has recently made some of the SMC wage rules far more sensible. From 24 August 2026, most applicants who need New Zealand skilled work experience no longer have to keep chasing a newly increased SMC wage threshold before applying for residence. Generally, the relevant threshold is set when their qualifying skilled work experience begins and, once set, does not change, provided they continue to meet it. A five-month grace period can also apply in certain circumstances where the threshold changes between the grant of a work visa and the person starting qualifying employment.
That provides considerably more certainty, but it does not solve the underlying salary problem. If immigration eligibility depends on an hourly wage threshold, then the number of hours recorded in an employment agreement can become almost as important as the salary written at the top.
Check The Contract, Not Just The Salary
For migrants planning a residence pathway, the obvious lesson is not to look at an annual salary and assume the immigration calculation will take care of itself and in fact this is one area where many salaried applicants are caught short, particularly where their annual salary skirts very close to the minimum required.
The employment agreement needs to be considered as a whole. What does it say about ordinary and maximum hours? Are the hours fixed or variable? Is there a maximum? Can additional hours be required? What hourly figure does the salary actually produce when the relevant immigration rules are applied?
Employers should pay attention to this as well. This does not mean employment agreements should be artificially rewritten to manufacture an immigration outcome. They should accurately reflect the real employment relationship, and immigration applications need to do the same.
But employers who recruit migrants should understand that clauses dealing with salary and working hours can have consequences well beyond employment law. Sometimes a sentence that looked like common practice, when the agreement was drafted becomes rather more interesting two years later when somebody is trying to qualify for residence.
Dolly Parton made working nine to five sound complicated enough. New Zealand immigration has managed to add a calculator.
If your work visa or residence strategy depends on meeting a wage threshold, do not rely on the headline annual salary figure alone. If you are heading down the SMC path, we can review the role, remuneration and employment agreement against the relevant immigration pathway and identify problems before they become expensive ones.
Until next week.
