The minimum wage will increase from April 1 next year, the Government has announced.
The adult minimum wage will move to $23.95 an hour – a 2% increase on the current rate of $23.50 an hour. The starting-out and training minimum wage rates were to be set at $19.16, to remain at 80% of the adult minimum wage.
The Minister for Workplace Relations and Safety is required by law to review the minimum wages annually to take effect April 1 each year.
Brooke van Velden said the increase reflected the Government’s agreement to moderate increases to the minimum wage each year as part of the NZ First-National coalition commitment.
“This new rate will benefit around 122,500 working New Zealanders and strikes a balance between keeping up with the cost of living and not adding further pressure on the costs of running businesses,” she said.
“I know those pressures have made it a tough time to do business, which is why we have taken this balanced approach. With responsible economic management, recovery and relief is coming.”
Van Velden said she was pleased to deliver the moderate increase to the minimum wage.
“The increase aims to help minimum wage workers keep up with the cost of living, with inflation projected to remain relatively stable at around 2% from June 2026.”
Youth unemployment and wage compression were considerations when setting the minimum wage, she added.
“Past minimum wage increases have driven wage compression, reducing the differentiation in pay between workers based on skills, experience or performance. The moderate increases agreed to by this Government for the 2024 and 2025 minimum wage decisions have started to ease this trend.”
Van Velden added it was important that the minimum wage supported young people to gain employment as they were more likely than other population groups to earn at or below that.
“Ensuring a balanced minimum wage rate enables young people to have access to entry level jobs that can set them up for greater future success.”
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