The minimum wage is set by the government and reviewed each year. It applies to all employees working in New Zealand aged 16 and over.
Effective 1 April 2025, the new adult minimum wage will see a modest increase of 1.5%.
This takes the minimum wage from $23.15 to $23.50 an hour.
The starting-out and training minimum wage will increase from $18.52 to $18.80 per hour, which is 80% of the adult minimum wage.
| Minimum wage type | 2024 | 2025 |
|---|---|---|
| Adult | $23.15 per hour | $23.50 per hour |
| Starting out | $18.52 per hour | $18.80 per hour |
| Training | $18.52 per hour | $18.80 per hour |
Informing your employees
If some of your employees are on the minimum wage, let them know about the increase. You can send them an email or hard copy letter. You will also need to update any employment contracts by a letter of variation setting out the increase your employees will receive.
Updating payroll systems and processes
To avoid any possibility of wage underpayment, be sure your payroll provider, accountant, lawyer, HR, or finance staff are ready to implement the change on 1 April 2025. Whether you have a manual or computer-based pay system, check and confirm the settings will be adjusted to the new rates.
For any of your employees on a starting-out or training wage, it’s a good time to review when they will be eligible to move to the adult rate.
If any employment agreements (contracts) are not current, you should discuss any changes with the employee and obtain their agreement. Make certain that the contract is consistent with any terms and conditions that were agreed with the employee before the contracts were last updated. Ensure they include all clauses a contract should have by law. If you did not provide a contract to your employees, you should do so now to coincide with the minimum wage increase.
Minimum wage obligations
As with every year when there’s an increase to the minimum wage, ensure you know the details including that:
- Unless both parties agree to a higher rate in the employment agreement, the minimum wage applies to all hours worked,
- It applies to employees paid with a salary, piece rates or commission.
Note: Under the Minimum Wage Act 1983, there are some circumstances where the minimum wage does not apply. This includes:
- Employees under 16 years of age.
- If a minimum wage exemption permit has been issued to an employer by a Labour Inspector in respect of an employee with a disability, which limits them from carrying out their work.
Changes to work visas and median wage
Effective from 10 March 2025, employers hiring employees under the Accredited Employer Work Visa (AEWV) and seasonal Specific Purpose Work Visa (SPWV) are no longer required to pay the median wage. There will be no set pay thresholds for these employees except the New Zealand minimum wage, which is currently NZD $23.15. This will then increase to NZD $23.50 an hour from 1 April 2025.
Employers are still expected to pay migrant workers equally to their New Zealand colleagues - the New Zealand market rate.
Sector Agreements which provided an exemption to the median wage will be removed with this change. Sector Agreements which offer residence pathways will continue with no changes to the wage rate required to gain residence.
The removal of sector agreements means roles previously covered by sector agreements for below median wage jobs are no longer subject to restrictions such as caps or limitations on visa duration. They will instead be treated the same as other jobs of the same skill level.
Employees issued with a AEWV before 10 March 2025, should be paid in line with their employment agreement and visa conditions, even if it is more than the minimum wage.
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