What are the current minimum wage rates in NZ?

New Zealand has three main minimum wage rates: adult, starting-out and training. The appropriate rate depends on the employee’s age, work situation and eligibility under the relevant rules.

The weekly figures are illustrative gross amounts for 40 hours at the stated hourly rate, before tax and lawful deductions. Actual pay depends on hours worked and the employee’s circumstances.

Who is entitled to the adult minimum wage?

The adult minimum wage generally applies to employees aged 16 and over who do not qualify for the starting-out or training minimum wage. Employees who supervise or train other workers as part of their job must generally receive at least the adult minimum wage.

Employers should not assume that an employee qualifies for a lower rate simply because they are new to the business or receiving on-the-job training. The starting-out and training categories have specific eligibility requirements.

When can the starting-out or training minimum wage apply?

Starting-out minimum wage

The starting-out rate may apply to certain employees aged 16 or 17 during their first six months with an employer, and to certain 18- or 19-year-olds who meet specified benefit and employment-history conditions. It may also apply to eligible young employees undertaking qualifying industry training.

Training minimum wage

The training minimum wage may apply to employees aged 20 or over whose employment agreement requires them to complete at least 60 credits per year in an approved industry training programme to become qualified in their field.

These categories have detailed eligibility conditions. Check the official rules before applying a lower rate to an employee.

Official guidance: Minimum wage rates and types.

How does the minimum wage affect business payroll costs?

The hourly wage is only one part of the cost of employing staff. A minimum wage increase can also affect related employment expenses and the amount of working capital a business needs.

Employers should consider the following areas when reviewing payroll budgets:

• Gross wages: Calculate the impact of updated hourly rates across all relevant employees and shifts.
• Holiday pay and leave: Check how changes in pay affect applicable leave calculations.
• KiwiSaver contributions: Review the employer contribution costs that apply to eligible employees.
• ACC levies: Consider whether changes in payroll affect your expected levy costs.
• Pricing and margins: Assess whether your current prices cover labour and other operating costs.
• Cash flow: Forecast payroll alongside rent, suppliers, tax payments and other business commitments.

Not every cost changes in direct proportion to the minimum wage. The actual effect depends on your workforce, contribution obligations, industry and business structure.

How can employers calculate the impact of minimum wage changes?

A simple first step is to compare the old and new hourly wage costs for the hours your employees work. This provides a starting estimate before you account for other employment-related expenses.

Example: A business employing five workers

Suppose a business has five employees who each work 40 hours per week at the adult minimum wage. At NZ$23.95 per hour, their combined gross wages would be:

• Weekly hours: 5 employees × 40 hours = 200 hours.
• Weekly gross wages: 200 hours × $23.95 = $4,790.
• Annualised gross wages: $4,790 × 52 weeks = $249,080.

This illustration assumes all five employees are eligible for the adult minimum wage and work 40 paid hours every week for 52 weeks. It excludes leave-related adjustments, employer contributions, ACC levies, overtime and other employment costs.

To estimate the effect of a wage change, multiply the difference between the old and new hourly rates by the relevant paid hours. Then update the broader payroll budget to reflect the costs applicable to your business.

What should employers do to prepare for minimum wage changes?

1. Review employee pay rates. Identify employees whose pay may be affected by the applicable minimum wage rate.
2. Check payroll software. Ensure your payroll system uses the correct rates from the effective date.
3. Update employment records. Keep accurate records of hours worked, wages payable, wages paid and leave taken.
4. Review budgets. Forecast the impact of wage changes on labour costs, pricing and cash flow.
5. Check related obligations. Review applicable holiday pay, KiwiSaver, PAYE and ACC requirements with the appropriate adviser.
6. Communicate clearly. Ensure employees understand any changes to their pay and that employment agreements and payroll records are consistent with the law.

What happens if a business pays less than the minimum wage?

Employers must generally pay employees at least the applicable minimum wage for every hour worked. Minimum wage compliance cannot simply be averaged across a season or a longer period to compensate for underpayment in other weeks.

Employers should keep accurate wage and time records and review any situation where an employee’s effective hourly pay may fall below the required rate. If you identify a possible underpayment, seek appropriate employment or legal advice and address the issue promptly.

The official Employment New Zealand website explains minimum wage requirements, exceptions and record-keeping obligations: Read the minimum wage guidance.

How can an accountant help with wage costs and business planning?

An accountant can help business owners understand how wage costs affect profitability and financial planning. Depending on the services agreed, support may include:

• Reviewing payroll costs in management accounts.
• Forecasting cash flow after changes in employment costs.
• Assessing labour costs against revenue and gross margins.
• Preparing budgets and financial scenarios for different staffing levels.
• Helping business owners understand how payroll costs interact with tax and other financial commitments.

Accounting support does not replace employment-law or payroll-specialist advice where that is required. Businesses should confirm that the provider offers the specific service they need.

People Also Ask: Minimum Wage NZ

Official sources and further guidance

• Employment New Zealand: Minimum wage rates and types
• Business.govt.nz: Minimum wages increase from 1 April 2026
• Business.govt.nz: Minimum wage and fair pay

Speak to DFK Orb360 O’Halloran

DFK Orb360 O’Halloran provides accounting, tax and business advisory support to businesses across New Zealand. If you need help understanding your financial performance, budgeting or cash flow, contact the team to discuss your business requirements.

Author: DFK Orb360 Team
Reviewed by: DFK Orb360 Team
Last reviewed: 26 October 2026

Disclaimer: This article provides general information and is not employment, legal, tax or accounting advice for a specific situation. Minimum wage rules can change, and eligibility depends on individual circumstances. Check current Employment New Zealand guidance or seek appropriate professional advice before making payroll decisions.