Minimum Wage in New Zealand

Minimum wage refers to the lowest hourly rate an employer must legally pay an eligible employee. In New Zealand, this is regulated by the government and updated regularly.

For businesses, paying at least the minimum wage is a compliance requirement. For employees, it ensures basic fairness and protection. Getting it wrong can lead to penalties, underpayment claims, or lawsuits.

Transition
In this guide you’ll learn:

• What the current minimum wage is in NZ (2025)
• Who it applies to (and who’s exempt)
• How to calculate minimum-wage salaries, including after tax
• The difference between minimum wage and the living wage
• What employers should do to stay compliant

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What Is The Minimum Wage in New Zealand (2025)?

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From 1 April 2025, the adult minimum wage in NZ increased to NZD $23.50 per hour (gross). The starting-out and training minimum wage rates also increased to $18.80 per hour 

Here’s what it means in typical working hours:

• 8-hour day = $188 (before tax)
• 40-hour week = $940 (before tax)

These rates are set by the Minimum Wage Order 2025. The government reviews minimum wage rates every year, and changes take effect on 1 April 

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Who Is Covered And Who Is Not

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Who must be paid at least minimum wage

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Most employees aged 16 and over must be paid at least the adult minimum wage. This includes full-time, part-time, casual, and piece-rate workers. Even if someone is paid a salary or commission, their total pay must still meet the minimum hourly rate when averaged across hours worked.

If you’re unsure how to check this, our HR Compliance Support service can help audit your payroll.

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Exemptions and special cases

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Some workers are paid differently under the law:

• Employees under 16 years old: There’s no legal minimum wage, but basic employment standards still apply.
• Starting-out wage: Applies to 16–17-year-olds in their first six months of work, or 18–19-year-olds meeting specific training or benefit conditions.
• Training wage: For employees 20+ completing an approved training programme as part of their job.
• Contractors and self-employed people: Minimum wage rules don’t usually apply, but the terms of engagement must still meet fair trading and employment standards.

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How To Work Out A Minimum Wage Salary (and After Tax)

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Salary vs hourly work

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If an employee is paid a salary, employers must check that the effective hourly rate equals or exceeds the current minimum wage. This includes all work time:meetings, prep, travel, and mandatory training.

For example, if a full-time staff member in Auckland works extra hours that drop their effective hourly rate below $23.50/hr, their pay must be adjusted.

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After-tax example

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Let’s say someone earns the adult minimum wage and works 40 hours a week:

• Weekly gross pay: $940
• Annual gross salary: around $48,880

After deductions for income tax, ACC levies, and possibly KiwiSaver, the take-home (net) amount will be lower. You can use the Inland Revenue tax calculator to estimate after-tax pay.

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Why Minimum Wage Matters for NZ Businesses

• Legal compliance: It’s required under the Employment Relations Act 2000. Non-compliance can lead to fines or public listing.
• Employee trust: Paying fairly builds loyalty and engagement.
• Budgeting: Wage increases affect payroll and pricing, especially around the April 1 review.
• Reputation: Offering fair wages boosts your employer brand.
• Risk management: Keeping accurate records protects against disputes.

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Key Takeaways for Employers and Employees

• The adult minimum wage in NZ 2025 is $23.50/hour.
• Review pay rates every April to stay compliant.
• Salary roles must still meet the minimum hourly rate.
• Keep clear documentation; it’s your best protection in an audit.
• Consider paying the Living Wage ($28.95/hr) to boost retention and culture.
• You must be paid at least the legal minimum wage if you’re 16 or older.
• Check your payslips and talk to your employer if something seems off.
• Your take-home pay depends on tax, KiwiSaver, and ACC levies.

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