New Zealand minimum wage 2026 – what employers need to know
The New Zealand minimum wage increases on 1st April 2026, bringing updated pay rates that all employers must apply from that date. As with any annual increase, this is a timely opportunity to review payroll settings, employment agreements and wider cost impacts across your business.
Below is a practical overview of the new rates, who they apply to, and the key compliance considerations for employers.
Minimum wage rates from 1 April 2026
From 1 April 2026, the following minimum hourly rates apply:
The starting-out and training wages remain set at 80% of the adult minimum wage. These rates apply to all eligible employees, regardless of whether they are full-time, part-time, casual or on fixed-term agreements.
These figures represent the statutory minimum. Employers must ensure all hours worked are paid at or above the applicable rate.
Who the 2026 minimum wage increase applies to
Most employees will fall under the adult minimum wage, however there are limited circumstances where starting-out or training wages can be applied. It’s important these categories are used correctly, as errors are a common source of non-compliance.
Adult minimum wage
The adult minimum wage applies to the majority of employees aged 16 and over, unless they meet the strict criteria for one of the lower minimum rates.
Starting-out wage
The starting-out wage may be paid to:
16 and 17-year-olds who have not yet completed six months of continuous employment with the employer
18 and 19-year-olds who have been on a qualifying benefit for six months or more and have not completed six months of continuous employment
Once the employee reaches six months of continuous employment, or no longer meets the eligibility criteria, they must be moved to the adult minimum wage.
Training wage
The training wage applies to employees aged 20 or over who are undertaking recognised industry training of at least 60 credits per year. This must be clearly recorded in the employment agreement.
Both the starting-out and training wages are intended to be transitional. They are not blanket alternatives to the adult rate and should be reviewed regularly.
Key compliance considerations for employers
While the rate change itself is straightforward, minimum wage increases often expose broader payroll and HR risks. Areas that commonly require attention include:
Salaried employees – ensuring total remuneration does not fall below the minimum wage once actual hours worked are taken into account
Employment milestones – employees remaining on starting-out wages beyond the permitted timeframe
Record-keeping – time and wage records must clearly demonstrate minimum wage compliance for every hour worked
Failing to address these issues can result in wage arrears, penalties and reputational risk.
Payroll, agreements and communication
Payroll systems
Employers should confirm payroll systems are updated to apply the new rates from 1 April 2026, including correct treatment of salaried staff and leave calculations.
Employment agreements
Where employment agreements specify an hourly rate, issuing a variation letter confirming the updated rate is best practice. This provides clarity and creates an audit trail if questions arise later.
Employee communication
While not complex, communication should be timely and clear. Employees should be informed of any pay changes before the first payslip reflecting the new rate is issued.
Understanding the broader cost impact
Minimum wage increases affect more than base pay alone. Employers should factor in flow-on costs such as:
KiwiSaver employer contributions, which increase alongside gross earnings
ACC employer levies, calculated on total payroll
Leave liabilities, including annual leave and public holiday payments
For businesses with multiple minimum-wage roles, even small hourly increases can materially affect annual payroll costs. Forward planning is key.
Support with New Zealand minimum wage 2026 compliance
Annual wage updates are a standard part of operating a business in New Zealand, but they still require careful execution. Payroll accuracy, compliant documentation and clear communication all matter.
At Konnect Koncepts, we support employers with payroll processing, employment agreement updates and practical HR advice to ensure wage changes are implemented correctly and efficiently.
If you’d like support reviewing your payroll or preparing for the April 2026 changes, our team is happy to help.
Disclaimer
This article reflects employment law and best practice in New Zealand as at January 2026. It is general guidance only and does not replace advice tailored to your specific circumstances.
