Business NZ is advising employers to be prepared for the minimum wage increase set to come into effect in April this year.
The minimum wage increase is set to take effect on 1 April 2026. Business NZ has advised employers to get ready in order to ensure they are paying staff the correct rate next month.
What’s Changing
The adult minimum wage will go up from NZD 23.50 to NZD 23.95 per hour, and the starting-out and training minimum wage will go up from NZD 18.80 to NZD 19.16 per hour. All rates are before tax and any lawful deductions, for example, PAYE tax, student loan repayment, and child support.
What Employers Need to Do
Employers should take this opportunity to review their business processes, employment records and systems. This includes checking that their payroll system is ready and updated for the 1 April changes, whether they have a manual or computer-based system, and re-calculate and update their budgets and cash flow as the increase may have an impact, including on items such as ACC levies, KiwiSaver contributions and holiday pay. Employers should also check if they need to adjust other pay rates to keep things fair, and consider reviewing their pricing strategy.
Workplace Relations and Safety Minister Brooke van Velden said that the new rate will benefit around 122,500 working New Zealanders and strikes a balance between keeping up with the cost of living and not adding further pressure on the costs of running businesses.
“I know those pressures have made it a tough time to do business, which is why we have taken this balanced approach. With responsible economic management, recovery and relief is coming,” said van Velden.
“I am pleased to deliver this moderate increase to the minimum wage that reflects this Government’s commitment to growing the economy, boosting incomes and supporting Kiwis in jobs throughout New Zealand.”
Youth unemployment and impacts on wage compression were two considerations when setting the new rate.
“Young people are much more likely than other population groups to earn at or below the adult minimum wage rate. Ensuring a balanced minimum wage rate enables young people to have access to entry-level jobs that can set them up for greater future success.”
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