Minimum Wage NZ 2026: Rates, PAYE, and What Employers Need to Know

New Zealand's minimum wage rates are reviewed annually, with any changes taking effect on 1 April each year. If you employ staff — even part-time or casual workers — you need to make sure you are paying at least the current minimum wage and that your PAYE calculations are up to date.

Here are the current rates and what employers need to know.

New Zealand has three minimum wage rates:

The adult minimum wage applies to most employees aged 16 and over who are not on a starting-out or training wage.

The starting-out wage (80% of the adult rate) applies to:

• 16 and 17-year-olds in their first six months with a new employer
• 18 and 19-year-olds who have been on a benefit for six months or more, in their first six months with a new employer

The training minimum wage applies to employees aged 20 or over who are doing recognised industry training as part of their employment agreement, involving at least 60 credits per year.

Note: Minimum wage rates are set by the government and reviewed annually. Check Employment New Zealand for the most current confirmed rates.

The adult minimum wage increased from the previous year's rate. For employers, this means:

• Any employee on or near the previous minimum wage needs their pay reviewed
• PAYE calculations need to reflect the new gross pay
• Employment agreements that reference the minimum wage are automatically updated by law — but it is good practice to confirm with employees

If you use payroll software (Xero Payroll, MYOB, or similar), the rates should update automatically — but it is worth confirming this happened correctly, particularly for casual or variable-hours employees.

Minimum wage increases flow directly into your PAYE obligations. Higher gross wages mean:

• More PAYE to withhold and pay to IRD — your employer monthly schedule (EMS) amounts will increase
• Higher KiwiSaver employer contributions — calculated as a percentage of gross earnings
• Higher ACC employer levy — also calculated on gross earnings

For a small business with several minimum-wage employees, the cumulative effect on payroll costs can be significant. If you have not modelled the impact on your wage bill, now is the time to do so.

Minimum wage applies to all hours worked — not just contracted hours. If a salaried employee regularly works more hours than their contract specifies, their effective hourly rate may fall below the minimum wage. This is a compliance risk that Employment New Zealand actively investigates.

To check: divide the employee's weekly salary by the average hours actually worked. If the result is below $23.50, you have a problem.

Contractors are not covered by minimum wage legislation — but only if they are genuinely self-employed. IRD and Employment New Zealand have been cracking down on misclassification. If someone works regular hours, uses your equipment, and works exclusively for you, they are likely an employee regardless of what their contract says.

Getting this wrong exposes you to back-pay claims, PAYE shortfalls, and penalties.

Casual employees are entitled to the minimum wage for every hour worked. If you have casual staff on old agreements that reference a previous minimum wage rate, update them — or at minimum confirm in writing that the current statutory rate applies.

The minimum wage is a legal floor — the living wage is a separate, voluntary benchmark calculated by the Living Wage Movement NZ. The living wage for 2025–2026 is $26.00 per hour, reflecting the estimated cost of a decent standard of living.

Some employers — particularly those working with local government contracts — are required or choose to pay the living wage. If you are tendering for public sector work, it is worth checking whether living wage requirements apply.

1. Check all employee pay rates against the current $23.50 adult minimum wage
2. Update your payroll software and confirm the April 2026 rates are loaded correctly
3. Review salaried employees to ensure their effective hourly rate is above minimum wage
4. Check your contractor arrangements — if any look like employment, get advice before IRD does
5. Budget for the full payroll cost — PAYE, KiwiSaver, and ACC all increase with wages

Staying on top of minimum wage obligations is one of the basics of running a compliant business. If you are unsure whether your payroll is set up correctly — or if you want to review your contractor arrangements — contact Eastmure & Associates for straightforward advice.