The real gender pay gap in New Zealand, and what you can do about It - Blog - BetterSaver
Skip to content

The real gender pay gap in New Zealand, and what you can do about It

March 3, 2021

While we look forward to the day when we no longer have to discuss the gender pay gap, it’s not here just yet. Things have improved over the last couple of decades but the fact is that women today are still paid less than men. This affects the lifetime earnings of women and their ability to set themselves up for a comfortable retirement.

The gender pay gap is a universal issue. What does it look like here in NZ? What causes it, and what can you do about it?

BetterSaver is here to educate you on NZ’s gender pay gap.

The State of Pay in NZ

As of August 2020, Stats NZ reported that the gender pay gap in NZ was 9.5%. In a positive light, this is down from when it was first tracked in 1998 and the pay gap was 16.2%. However, the fact is that dollar-for-dollar, women are still paid less. Some suggest it’s even worse than these statistics show.

To arrive at the gender pay gap figure, Statistics NZ uses the median hourly earnings. This means that half of the people get paid more than the median, while half get paid less. Their figure does not account for differences in jobs, positions, or hours worked.

A consultancy group called StrategicPay recalculated the gender pay gap, taking into consideration bonuses, vehicles and KiwiSaver. They found the difference was almost twice as much - nearly 18%. Their findings showed that men were more likely to receive more incentives, KiwiSaver contributions and higher-value vehicles.

Of further concern is the fact that higher wage gaps occur among higher-paid jobs, like professionals (think doctors and accountants) and technicians and trades workers - positions like mechanics, electricians and chefs. In 2020, the University of Canterbury released research that found that among researchers at New Zealand universities, the average pay gap between men and women was $400,000 over a career. They were able to account for half of this figure by adjusting for research performance, age, and field, leaving a $200,000 gap unaccounted for.


In past decades, the gender pay gap was often attributed to the division in education levels and traditional occupation choices for men and women. These days, women are still more likely to work part-time or take lower paid, flexible positions that allow them to manage a family. Women who take a break from work to have children may miss out on opportunities for advancement and professional development. But, according to the Ministry for Women, these factors only explain about 20% of the current gender pay gap.

A major contributing factor to the gender pay gap is bias - which sometimes people are not even aware they have. Our unconscious stereotypes of traditional gender roles - for instance, women care for the home and children - can funnel women into ‘expected’ roles and affect decisions on hiring, promotions and salary negotiations.

Consider this example. In 2013, researchers at Yale University created a fictional student profile and asked professors at top American universities to assess their competence, report on how likely they would be to hire or mentor the student, and how much pay they would offer them. The hidden catch was that half of the applicants were named Jennifer and the other half named John - all other details were exactly the same. The shocking results? The average pay for John was $4,000 higher than for Jennifer! John was given higher scores for competency and more likely to be hired than Jennifer. This bias stretched across both male and female professors.

This shows how unconscious bias can affect our behavior, and demonstrates how easily the gender pay gap continues to be a problem.

Covid’s Role

In our current times we cannot overlook the role that the Covid-19 pandemic has played when it comes to women and wages. Following the first lockdown in 2020, over 11,000 jobs were lost in NZ, and 90% of those unemployed were women. This is largely due to the fact that the industries most severely impacted were those typically dominated by females - hospitality, tourism, and sales. Also roles in areas such as cleaning and childcare were diminished. Some have termed this a “she-cession” or “pink recession.”

Effects of Gender Pay Gap

Statistically, women live longer than men, so they require more finances to see them through retirement and for additional health care. But the gender pay gap affects a woman’s lifetime earnings and ability to save up adequate funds for a comfortable retirement.

Financial stress affects our health. Money stress can lead to mental health issues, problems with relationships, and physical health problems. In NZ, 74% of women report being concerned about money, with 55% of women saying they are stressed about money compared to just 42% of men. This stress can result in more time away from work, resulting in less earnings and more money spent on healthcare.

Men can also be affected by the gender pay gap. Traditional roles dictate that men are the breadwinners, so they may feel pressured to overwork to provide for the family. This can result in a lack of a healthy work-life balance. Men may feel unable to take time away from work to spend with the children, meaning they miss out on raising their families.

What Can You Do?

The gender pay gap won’t be fixed overnight. Progress has been made over the last 20 years and will continue with further effort. Here are a few bits of practical advice to help close the gap.

Know the law

In November 2020, the Equal Pay Amendment Act came into force. It provides a means for employers and staff to negotiate if there is a gender pay gap without involving the courts. Many people are intimidated by the thought of taking their employer to court, so this amendment outlines a collaborative process that makes it easier for employees to approach the issue. Making it easier for people to work together to address the issue paves the way for progress.

Make sure you are paying your staff equitably

If you run a business, do your part. There is helpful information and guidelines on Statistics NZ website to help you determine if there is a gender pay gap in your workplace. You may think it’s not possible, but remember we talked about unconscious bias. No one’s going to blame you if you preemptively address the issue yourself.

Get financially lit

Financial literacy means having the skills and knowledge to make informed and effective decisions in all areas of your finances. Research shows that in New Zealand 74% of males are financially literate - compared to 52% of females. So consider the gender pay gap, the fact that women statistically live longer than men, and are less financially literate. Increasing your financial literacy can help you make better decisions to make your money go further, today and in the future. Getting advice from a financial advisor is never a bad idea.

BetterSaver Is Here to Help

We’re grateful for the progress that has been made on closing the gender pay gap and confident that it will continue. In the meantime, we are here to provide you with all the tools and knowledge you need to make the most of your money.

At BetterSaver, we believe everyone should have the opportunity to reach their financial goals and save up for a comfortable retirement - without extra stress. We make it easy for you to access expert advice so you can make the best decisions for your situation.

In our next article, we’ll talk about the gender gap when it comes to investing. Stay tuned.