From April 1, 2025, New Zealand’s minimum wage will increase to $23.50 per hour, a 35-cent rise from the current rate of $23.15.
This change will affect around 141,900 workers who currently earn at or just above the minimum wage. The starting-out and training wages will also increase, reaching $18.80 per hour, which remains 80% of the adult minimum wage.
For full-time employees working 40 hours per week, this means an additional $14 per week before tax. While the increase is moderate, it reflects the government’s ongoing approach to balancing wage growth with economic conditions.
How to Prepare for the Change
- Notify employees – Employers must inform workers about the wage increase. If employees are on the minimum wage, they should receive formal notification via letter or email as a variation to their employment contract.
- Review payroll systems – Businesses need to update payroll settings to ensure the new rates are applied correctly. Whether payroll is handled manually or through a digital system, adjustments should be checked in advance. Employers should also confirm when starting-out or training wage employees will transition to the adult rate. This is also a good time to review and update employment agreements to meet legal requirements.
- Consider pay relativity – Employees earning slightly above minimum wage may request adjustments to maintain wage differences. Assess how internal pay structures compare within the company and the broader industry.
- Update budgets – Factor in higher wage costs, including holiday pay obligations, to ensure financial planning accounts for the change in both the short and medium term.
- Review minimum wage rules – The minimum wage applies to all hours worked, including salaries, commissions, and piece-rate pay. However, it does not apply to employees under 16 years old or those with an official minimum wage exemption permit.
Taking these steps will help businesses adapt smoothly while ensuring compliance with employment laws.
Talk to us — we can help ensure your systems and processes are in place for the change.
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