Minimum wage in New Zealand: Current rates and what employers must pay

Published Wednesday 15 July 2026

Table of contents

• What is the minimum wage in New Zealand?
• Who is covered by the minimum wage?
• What are the types of minimum wage?
• How to prepare for a minimum wage increase
• How to check and calculate if you meet minimum wage
• Does KiwiSaver affect the minimum wage?
• Keep New Zealand payroll simple and compliant with Xero
• FAQs on the minimum wage in New Zealand

Key takeaways

• The adult minimum wage in New Zealand is $23.95 per hour, with starting-out and training rates at $19.16 per hour, effective 1 April 2026.
• The minimum wage applies to most employees aged 16 and over and must be met for every hour worked, regardless of whether you pay a salary, hourly rate, or piece rate.
• You need to update your payroll systems, notify your team, review pay relativity, and refresh your budget each time rates change to maintain compliance.
• When you include accommodation or deductions in your pay arrangements, you must ensure the employee's net pay still meets the minimum wage for each hour worked after lawful deductions.

What is the minimum wage in New Zealand?

The New Zealand minimum wage is the legal hourly rate you must pay employees aged 16 and over. New Zealand's current minimum wage rates are:

• Adult minimum wage: $23.95 per hour
• Starting-out minimum wage: $19.16 per hour
• Training minimum wage: $19.16 per hour

These rates took effect on 1 April 2026. The government typically reviews and adjusts the New Zealand minimum wage annually on 1 April, so plan ahead each year to update your payroll and budget.

What is the minimum wage in New Zealand versus the living wage? The minimum wage is the legal floor set by government regulation. The living wage in New Zealand is a voluntary, higher rate calculated by advocacy groups to reflect the true cost of living in Aotearoa New Zealand. As of 2026, the living wage sits around $27.80 per hour, significantly above the statutory minimum. You only have to pay at least the minimum wage, although some employers choose to pay the living wage to attract and retain talent or align with their values.

Who is covered by the minimum wage?

The minimum wage in New Zealand applies to most employees aged 16 and over. It does not apply to employees under 16 years old. Contractors and self-employed individuals are not covered because they are not employees under the Employment Relations Act.

Every employee covered by the minimum wage must receive at least the applicable hourly rate for every hour they work. This rule applies regardless of how you structure pay:

• Salary: If you pay a fixed annual or monthly salary, divide the total gross pay in the period by the total hours worked. The result must meet or exceed the minimum wage in New Zealand per hour for every hour worked.
• Hourly wages: Confirm the base hourly rate is at or above the current New Zealand minimum wage for all hours worked, including any additional or irregular hours.
• Piece rates or commission: Average earnings per hour across the pay period must still meet the minimum wage. If the piece rate or commission falls short, you must top up the employee's pay to meet the legal minimum.

Employing school-age workers

Minimum wage rules in New Zealand cover employees aged 16 years and over, so many school-aged workers are outside these rules. You’re not legally required to pay the adult, starting-out, or training minimum wage rates for these employees.

There is no set minimum wage for school-age workers under 16. That said, you still have obligations under employment law. School-age workers are entitled to a written employment agreement, safe working conditions, and limits on the hours they can work during school terms.

This is most relevant for employers in retail, hospitality, and agriculture, where young workers are commonly hired for part-time or seasonal roles. Even without a minimum wage floor, paying a fair rate helps with retention and reflects well on your business.

Exemptions

A small number of employees may be exempt from the minimum wage under specific, approved conditions. The most common exemption applies to employees with disabilities whose output or capacity is significantly affected, where an employer holds a current Minimum Wage Exemption Permit issued by the Ministry of Business, Innovation and Employment (MBIE).

Exemption permits are not automatic. You must apply for one and meet strict criteria before paying below the minimum wage. If you think an exemption may apply to your situation, check the guidance on the Employment New Zealand website or seek advice from an employment lawyer before making any changes to pay.

What are the types of minimum wage?

New Zealand has three distinct minimum wage rates. Understanding which rate applies to each employee helps you pay correctly and avoid compliance issues.

Adult minimum wage

The adult minimum wage is $23.95 per hour. It applies to most employees aged 16 and over who do not qualify for the starting-out or training rates. This is the standard rate you'll use for the majority of your team.

Starting-out minimum wage

The starting-out minimum wage is $19.16 per hour. It applies to eligible 16 – 19-year-olds in specific circumstances:

• They are in their first 6 months with a new employer and have not been with that employer continuously for 6 months or more
• They are required by their employment agreement to undertake industry training for at least 40 credits per year
• They are aged 16 or 17 and receiving a specified social security benefit

Once an employee completes 6 months with you, or no longer meets the other criteria, you must move them to the adult minimum wage.

Training minimum wage

The training minimum wage is also $19.16 per hour. It applies to eligible 16 – 19-year-olds who are doing at least 60 credits per year of recognised industry training that leads to a qualification. The training must be part of their employment agreement.

Always confirm eligibility criteria with Employment New Zealand before applying the starting-out or training rates. If you're unsure, it's safer to pay the adult rate to avoid underpayment and potential penalties.

For detailed eligibility rules, visit Employment New Zealand's minimum wage types page.

How to prepare for a minimum wage increase

The New Zealand minimum wage usually increases annually on 1 April. Use this checklist to update pay correctly, keep your team informed, and maintain compliance.

1. Notify your team

Tell employees what is changing, why it's changing, and when the new rate takes effect. Provide updated pay details in writing and point them to official sources like Employment New Zealand so they can verify the information themselves. Clear communication builds trust and reduces confusion.

2. Update payroll systems and records

Update pay items, employment agreements, and rosters to reflect the new rates. Check that leave rates, allowances, and any pay templates tied to the old rates are also updated. If you use payroll software, confirm that rate changes flow through automatically or make manual adjustments where needed.

Review employment agreements for any clauses that reference the minimum wage or require variation when rates change. Provide written notice of any changes to terms and conditions as required by employment law.

3. Review pay relativity

If you lift entry-level pay to meet the new minimum, consider how this affects pay relativities across your team. Employees in higher-skilled or more experienced roles may expect their pay to increase proportionally to maintain fair differentials. Plan for these adjustments in your budget and communicate any changes clearly.

4. Update your budget and pricing

Re-forecast your labour costs based on the new rates. Factor in the impact on gross wages, employer KiwiSaver contributions, ACC levies, and any other payroll-related expenses. If your margins are tight, consider whether you need to adjust pricing, reduce hours, or find efficiencies elsewhere in the business.

In hospitality and retail, even small wage increases can significantly affect your cost of goods sold and operating margins. Run the numbers early so you can make informed decisions about pricing, staffing levels, and service offerings.

5. Refresh obligations and save references

Bookmark the Employment New Zealand minimum wage page and save your internal checklist. This makes it easier to repeat the process quickly next April. Set a reminder in your calendar for February or March each year so you have time to prepare before the 1 April deadline.

Here’s more guidance on running payroll for employees.

How to check and calculate if you meet minimum wage

Use these scenarios to confirm compliance for each pay method. New Zealand minimum wage rules require you to pay at least the applicable minimum wage for every hour worked, regardless of how you structure pay.

If you pay a salary

Divide the total gross pay in the period by the total hours worked. The result must be at least the current New Zealand minimum wage hourly rate for every hour worked.

Example: An employee earns $50,000 per year and works 40 hours per week. That's $961.54 per week ($50,000 ÷ 52). Divide $961.54 by 40 hours to get $24.04 per hour. This exceeds the adult minimum wage of $23.95, so you're compliant.

If the calculation falls below the minimum, you must increase the salary or reduce the contracted hours to meet the legal requirement.

If you pay hourly

Confirm the base hourly rate is at or above the minimum wage in New Zealand per hour for every hour worked in the period, including regular hours, overtime, and any additional shifts. This is the simplest scenario, but remember to check that casual or variable-hour employees also meet the minimum for every hour they work.

If you pay piece rates

Average earnings per hour across the pay period must still meet the New Zealand minimum wage. If the piece rate or commission falls short, top up the employee's pay to meet the minimum.

Example: An employee picks fruit and earns $800 in a week. They worked 36 hours. Divide $800 by 36 hours to get $22.22 per hour. This is below the adult minimum wage of $23.95. You must top up their pay by $62.28 (36 hours × $1.73 shortfall) to meet the legal minimum.

Track hours carefully and reconcile piece-rate pay each period to ensure compliance.

If accommodation or deductions apply

You can only offset accommodation costs or deduct expenses in limited cases and with proper written agreement. Even when lawful deductions apply, you must ensure the employee's net pay doesn’t fall below the minimum wage in New Zealand for each hour worked after deductions.

Accommodation: If you provide accommodation, you can deduct an agreed cost from their wages. Support the arrangement with a written agreement specifying the nature and value of the accommodation. Without a written agreement, default limits under the Wages Protection Act 1983 apply: No more than 15% minimum wage earnings for board and lodging combined, or 5% for lodging alone. Any deduction above this threshold may reduce the employee's effective hourly rate below the minimum wage, which is unlawful.

Other deductions: Deductions for uniforms, tools, or breakages must comply with the Wages Protection Act. Generally, you cannot make deductions that reduce pay below the minimum wage unless the deduction is for a lawful purpose and the employee has agreed in writing. Seek legal advice if you're unsure.

Does KiwiSaver affect the minimum wage?

Employer KiwiSaver contributions cannot be counted toward meeting the minimum wage in New Zealand. The minimum wage must be met from the employee's gross pay before any employer contributions.

How it works: You pay the employee their gross wage or salary, which must meet or exceed the minimum wage for every hour worked. Then, you add your employer KiwiSaver contribution (currently 3.5% of gross pay) on top. The employer contribution does not reduce or offset the employee's minimum wage entitlement.

Employee KiwiSaver deductions (currently 3.5%, 4%, 6%, 8%, or 10% of gross pay) also do not reduce your obligation to pay the minimum wage. You calculate the minimum wage based on gross pay before any employee KiwiSaver or tax deductions.

Example: An employee works 40 hours in a week at the adult minimum wage of $23.95 per hour. Their gross pay is $958 (40 × $23.95). You then add your default 3.5% employer KiwiSaver contribution of $33.53, bringing the total cost to you to $991.53. The employee's gross pay of $958 is what must meet the minimum wage, and the $33.53 sits on top.

The minimum rate of 3.5% is going up to 4% in 2028. Here’s more information from the IRD on KiwiSaver and minimum wage.

Keep New Zealand payroll simple and compliant with Xero

Managing minimum wage compliance is simpler when you automate rate updates, track hours accurately, and keep clean records each pay run. Payroll software helps you stay on top of changing rates, calculate pay correctly for salaries and hourly workers, and generate the reports you need for tax and compliance.

When you centralise payroll, timesheets, and leave in one system, you reduce manual errors and save time on admin. You can also share access with your accountant or bookkeeper so they can review payroll and answer questions. This helps you prepare for tax filings and audits more easily.

Xero payroll software helps you manage minimum wage updates, automate calculations, and keep your team paid correctly every time.

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FAQs on the minimum wage in New Zealand

Here are answers to common questions about the minimum wage in New Zealand, including when rates change, how tips and bonuses are treated, backpay obligations, and apprentice eligibility.

When do rates change in New Zealand?

The minimum wage in New Zealand usually changes on 1 April each year, with new rates announced a few weeks earlier. Check official updates each February or March so you can adjust payroll and budgets in time.

Do tips or bonuses count toward minimum wage?

Tips, gratuities, and discretionary bonuses don't count toward meeting the minimum wage in New Zealand. You must meet the minimum wage from base pay alone, then add any tips or bonuses on top.

Do I need to backpay if pay falls below minimum?

Yes. If an employee's pay falls below the minimum wage in New Zealand for any period, calculate the shortfall and pay it as soon as possible, then adjust your payroll processes to stop it happening again.

Are apprentices eligible for the training minimum wage?

Apprentices aged 16-19 can be paid the training minimum wage if they complete at least 60 credits of recognised industry training each year as part of their employment agreement. If they're 20 or over, or don't meet the training credit requirement, you must pay at least the adult minimum wage.