Paddon was introduced to motorsport through his father Chris, himself a rally driver. He competed in his first rally in 2002 at the age of 15 and began contesting the New Zealand Rally Championship in 2006 in a Mitsubishi Lancer Evolution VIII, winning both the Junior and Rookie titles in his first season. He made his WRC debut in 2007 as a wildcard entry at his home event in New Zealand.
After winning the New Zealand championship in 2008 and retaining his title in 2009, Paddon won the Pirelli Star Driver scholarship at the 2009 Rally Australia by posting the fastest times on the opening day's stages. This gave him a fully funded six-event programme for the 2010 WRC season, which he supplemented with a $50,000 Rising Stars Scholarship from Rally New Zealand.
In 2010 he won the PWRC category on home soil and followed it with third and second PWRC placings in Finland and Germany respectively, driving the Pirelli Star Driver Evo X.
For 2011, Paddon contested a full six-event PWRC season under his own New Zealand World Rally Team banner, switching to a Subaru STR11 Impreza N4 run by Belgian outfit Symtech Racing. He won four consecutive events — Portugal, Argentina, Finland, and Australia — to claim the 2011 P-WRC World Championship title.
The 2012 season saw Paddon move into the S-WRC category in a Škoda Fabia S2000, taking his first S-WRC win at the Rally de Portugal. In 2014 he scored his first WRC stage win at the Rally Catalunya.
In 2015, driving for Hyundai, Paddon became the first New Zealander to lead a WRC event outside his home country, taking the lead of the Rally d'Italia. He finished second overall behind Sébastien Ogier after a strong performance supported by multiple stage wins.
On 4 May 2016 at the YPF Rally Argentina, Paddon and co-driver John Kennard — who became the oldest co-driver to win a WRC round at 57 years of age — claimed New Zealand's first-ever WRC outright victory, winning by 13.3 seconds from Sébastien Ogier.
The 2017 season brought tragedy at the Monte Carlo Rally when a spectator was killed after being struck by Paddon's car during the first stage. Paddon was uninjured and his car was driveable, but Hyundai withdrew him from the event as a mark of respect. He took two podiums that year in Poland and Australia.
In October 2020, Paddon and Hyundai New Zealand revealed one of the world's first electric rally cars, based on the Hyundai Kona. He also organised and won the inaugural 2020 Ben Nevis Station Golden 1200 hillclimbing event in Central Otago, driving a specially prepared Hyundai i20 with a custom 2.1-litre turbocharged engine producing around 800 horsepower.
In 2023, Paddon joined the Italian BRC Racing Team with support from Hyundai New Zealand and Pirelli, and fought to his first European Rally Championship title — winning the opening round in Portugal and becoming the first non-European driver to claim the ERC crown. He also won the 2023 New Zealand Rally Championship.
Paddon and John Kennard defended the ERC title in 2024 under BRC Racing Team, winning at the Rali Ceredigion and fending off challenges from Mathieu Franceschi and Mikolaj Marczyk to claim back-to-back European titles. He also won the 2024 FIA Asia-Pacific Rally Championship.
Hayden Paddon stands as New Zealand's most successful rally driver, the only New Zealander to win an outright WRC event, and a record-setter in the ERC as the first non-European champion of that series. His combination of PWRC, WRC, and regional championship titles across a two-decade career places him among the most versatile and accomplished drivers from the Southern Hemisphere in the history of rally sport.