Salaried employees are protected by the Employment Relations Act and enjoy a range of employment benefits such as paid annual, sick, and maternity leave, paid public holidays and Kiwisaver etc.

Being an employee 

Employees pay PAYE income tax and do not need to be registered for GST. Student loan and KiwiSaver payments are paid automatically from your pay (if applicable). Employees can negotiate the terms and conditions of their contract with their employer.

As an employee you may want to consider asking for additional benefits such as reimbursement of GPEP2 fees, conference leave etc. Employees can expect a patient contact time of 3.5 hours per tenth (four hour session or half day) during which they will see between 12-13 patients.

Being a contractor

Self-employed contractors enjoy greater flexibility in their working arrangements and, to offset the lack of employee benefits (no paid annual, sick, and maternity leave, paid public holidays and KiwiSaver etc), are generally paid between 10-15% more than employee rates.

Contractors have less job security however, and are not extended protection under the Employment Relations Act. As a contractor you have the option of functioning as a sole trader or through a company structure, paying GST and working out other tax liabilities.

Keeping good records of your income and work-related expenses is important, as is seeking advice from an accountant. The Inland Revenue website also has information about your tax obligations.

Some contracted GPs are paid a commission rate (rather than a sessional rate). This varies but is often 55-60% (average 57%) of the income generated by the patients they see.

Established GPs and GPs working in busy practices find this arrangement quite lucrative. When you start out in GPEP2 , however, you could have a relatively small number of your own patients and may want to consider negotiating a minimum fee per session.

When working for a practice as a short-term contractor or locum, rates are usually higher than when working for a practice long-term. It’s very important that you understand the actual nature of the work you do – whether your employment is closer to a contractor or an employee.

More information

There are significant risks for you as well as your practice if this relationship is misplaced. See and for guidance notes on business structures.