Minimum Wage Annual Cost Calculator

The headline minimum wage is only part of what an employee actually costs your business once you add the on-costs every New Zealand employer must cover. This Minimum Wage Annual Cost Calculator builds up the true yearly cost of a minimum-wage role from the hourly rate, including holiday pay, employer KiwiSaver contributions and the ACC work levy. You enter the hours worked each week and the hourly minimum wage, and the tool calculates base wages over 52 weeks, then adds 8 percent for annual holiday entitlement, 3.5 percent for the minimum compulsory employer KiwiSaver contribution, and an ACC work levy estimate. The result is the total annual cost to employ that person, which is well above their take-home pay. Small business owners, cafe and retail operators, and anyone pricing a job or building a budget use this to understand the real labour cost before they hire. For example, 40 hours a week at $23.95 an hour comes to $49,816 in base wages, which grows to about $55,879 once holiday pay, KiwiSaver and ACC are added. Good practice is to treat the loaded figure, not the bare hourly rate, as your planning number, and to revisit it whenever the minimum wage changes on 1 April each year. Remember the ACC levy varies by industry classification unit, so adjust the rate to your own activity. This is a planning estimate, so check current rates and your KiwiSaver and ACC obligations before committing.

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$55,878.61
Total annual cost
Base wages$49,816.00
Holiday pay (8%)$3,985.28
Employer KiwiSaver + ACC$2,077.33

Base = wage x hours x 52. Add 8% holiday, 3.5% KiwiSaver and the ACC levy. Estimate only, not financial or tax advice.

How it works

Base wages are the hourly rate multiplied by weekly hours and 52 weeks. Holiday pay adds 8 percent of base wages, employer KiwiSaver adds 3.5 percent, and the ACC work levy adds the rate you enter as a percentage of base wages. The total is the sum of all four parts.

Worked example

At 40 hours a week and $23.95 an hour, base wages are $49,816.00. Holiday pay at 8 percent is $3,985.28, KiwiSaver at 3.5 percent is $1,743.56 and ACC at 0.67 percent is $333.77, giving combined KiwiSaver and ACC on-costs of $2,077.33. The total annual cost is $55,878.61.

Related calculators

Data sources: the rates and thresholds on this page are maintained against Employment New Zealand. Figures are checked twice monthly.

Frequently asked questions

What on-costs are added to the minimum wage?

This calculator adds 8 percent for annual holiday pay, 3.5 percent for the minimum compulsory employer KiwiSaver contribution, and an ACC work levy estimate. Together these lift the true cost well above the base hourly rate. Other costs like sick leave and public holidays can add more.

Why is the employer cost higher than the wage?

Because you pay more than the cash wage. Holiday pay, employer KiwiSaver contributions and the ACC levy are all real costs on top of the base wage. The loaded figure is the right number to use when budgeting or pricing work.

Does the ACC levy rate vary?

Yes. The ACC work levy depends on your industry classification unit, so it differs between, say, an office and a building site. Adjust the levy rate in the calculator to match your own activity for a closer estimate.