Paying your team correctly and fairly is the foundation of responsible business practice in New Zealand. At the core of this responsibility is the minimum wage –  the lowest hourly rate an employer can legally pay their staff. It is not a suggestion but a mandatory employment standard that applies across almost every industry and sector in the country.

Following the minimum wage rules is critical for compliance and while it may seem simple, it does require a little admin. The rate changes every year, so employers must ensure that they change their systems and payroll to match. There’s also a few notable rules around the application of the minimum wage, as well as the different wage rate categories. 

That’s where our guide is designed to help. We’ll set out everything you need to know about the minimum wage in New Zealand. 

Download our guide by filling in the form on the right. 

What is the minimum wage in New Zealand?

The minimum wage is the lowest hourly rate an employer can legally pay their employees. The adult minimum wage rate is currently set at $23.50 per hour, while the training and start-out rates are $18.80 per hour. 

Understanding and correctly applying these rates is a non-negotiable aspect of running a business in New Zealand.

How the minimum wage is set in NZ

The minimum wage rates are not static – instead, they’re reviewed by the Government every year. The review considers various factors, including inflation, the cost of living and the overall health of the economy. Once the review is complete, the new rate typically comes into effect on 1 April. 

This yearly cycle requires employers to be vigilant and prepared to update their payroll systems and processes to align with the new requirements.

When the minimum wage applies

The minimum wage applies to the vast majority of employees in New Zealand. If someone is 16 years of age or older and is not a specified exception, they are legally entitled to be paid at least the relevant minimum wage rate. This entitlement covers employees in all types of work arrangements, including full-time, part-time, fixed-term and casual roles. 

Minimum wage types in New Zealand

New Zealand employment law includes three distinct minimum wage categories: the adult minimum wage, the starting-out wage and the training minimum wage. The different categories are designed to account for age, experience and training status.

It’s crucial for employers and payroll teams to understand which rate applies to each employee, as paying the incorrect rate can lead to non-compliance.  

Adult minimum wage

The adult minimum wage is the primary rate that applies to most employees. Any employee aged 16 or over who is not eligible for the starting-out or training rates must be paid at least the adult minimum wage. 

Starting-out wage

The starting-out wage is a specific rate that can apply to certain younger employees who are new to the workforce. This rate is designed to help young people gain work experience. An employer may pay the starting-out wage to:

• 16 and 17-year-old employees during their first six months with that employer. 
• 18 and 19-year-old employees who have been on a qualifying social security benefit for six months or more and who have not yet completed six months of continuous employment with any employer since they started receiving that benefit.
• 16 to 19-year-old employees in a recognised industry training programme that involves at least 40 credits per year.

Training minimum wage

The training minimum wage is another specific rate for employees aged 20 or over who are undertaking a recognised industry training programme. To be eligible, the training must be part of an approved programme that requires at least 60 credits a year. 

This rate aims to encourage businesses to invest in upskilling their workforce. Like the starting-out wage, strict conditions apply and employers must ensure the employee and the training programme meet all legal requirements before applying this wage rate.

Current minimum wage rates in New Zealand

As of 1 April 2025, the current minimum wage rates are:

• Adult minimum wage: $23.50 per hour
• Starting-out minimum wage: $18.80 per hour
• Training minimum wage: $18.80 per hour 

Comparison to previous years

Minimum wage rates have consistently increased since at least 1997, although at varying rates. For a detailed look at annual changes, review the historical minimum wage rates provided by Employment New Zealand.

Key rules and employer obligations

Compliance with minimum wage laws is governed by the Employment Relations Act 2000 and the Minimum Wage Act 1983. The key rule is that every employer must pay their eligible employees at least the correct minimum wage for every hour they work. 

Non-compliance can be a big risk to your business. It can result in significant penalties, including arrears payments, fines and damage to your business’s reputation. Staying informed, monitoring your payroll and maintaining accurate records are your best defence.

As an employer, there are a few other key obligations that you should be aware of.

Employment agreements and record-keeping

Every employee must have a written employment agreement and it should clearly state their wage rate and how it is calculated. The agreement must specify whether they are on the adult, starting-out or training wage. 

Beyond the agreement, you are legally required to keep accurate records of all hours worked and wages paid for every employee for at least seven years. These records should be kept even if the employee has left your business. 

Paying below the minimum wage

Paying an employee less than the applicable minimum wage is unlawful. There are only a few exceptions to this. 

First, the minimum wage doesn’t apply to employees under 16 years of age. Their employment should not occur during school hours however, or impede their ability to attend their education. 

Second, there are rare cases where the Labour Inspectorate can grant an exemption permit for a worker with a significant disability that limits their ability to carry out the requirements of their work. These permits are uncommon and require a formal application and assessment process. 

How to stay compliant with changing wage rates

Proactive management is the key to seamless minimum wage compliance. Instead of scrambling every 31 March, it’s helpful to implement a straightforward annual process to prepare for the 1 April changes. Our guide includes a handy checklist that you can use. 

Here are a few key tasks you’ll have to complete with every minimum wage update.

Update payroll software and employment contracts

Before 1 April, conduct a thorough review of your payroll system. Ensure it is ready to apply the new rates automatically from the effective date. If you use Employment Hero, it’s quick and easy to update with the minimum wage change and apply the new rules to the next pay run. 

This is also an opportune time to review your individual employment agreements, to ensure they are current and reflect the correct wage information. You should also check whether any employees are now eligible for different minimum wage rates. Getting your systems and documentation in order ahead of time prevents errors and last-minute stress.

Communicate updates to staff

Transparency is crucial for building trust with your team. Inform all employees of the upcoming minimum wage increase well before it takes effect. For those directly impacted, it’s important to let them know about their new rate of pay. This proactive approach helps prevent payroll queries and disputes down the line. 

Conduct regular payroll audits

Don’t wait for a problem to arise. Conducting periodic payroll audits is a powerful compliance strategy. Review historical pay runs and timesheet records to verify that all employees, including casual and part-time staff, have been paid at or above the minimum wage for all hours worked. Audits help you catch and correct any discrepancies before they become significant liabilities.

Minimum wage increases don’t have to be an administrative challenge

No more last minute panic. Our minimum wage guide includes a comprehensive checklist that you can use every year to ensure that you’re ready for the next increase. 

Download the guide by filling in the form on the right.

The information in this article is current as at 21 October 2025, and has been prepared by Employment Hero Pty Ltd (ABN 11 160 047 709) and its related bodies corporate (Employment Hero). The views expressed in this article are general information only, are provided in good faith to assist employers and their employees, and should not be relied on as professional advice. Some information is based on data supplied by third parties. While such data is believed to be accurate, it has not been independently verified and no warranties are given that it is complete, accurate, up to date or fit for the purpose for which it is required. Employment Hero does not accept responsibility for any inaccuracy in such data and is not liable for any loss or damages arising directly or indirectly as a result of reliance on, use of or inability to use any information provided in this article. You should undertake your own research and seek professional advice before making any decisions or relying on the information in this article.