Minimum Wage Increase Cost Calculator NZ 2026

This calculator works out what a minimum wage rise costs your business, which is always more than the staff on the minimum wage. The rate changes on 1 April every year and is normally announced around December, so there is roughly a quarter's notice to budget for it. The adult rate is $23.95 an hour from 1 April 2026, with starting-out and training rates at $19.16, both set at 80 percent of the adult figure. You enter how many staff sit on or near the floor, their hours, the current and new rates, and the calculator returns the direct cost of lifting them. The part most budgets miss is relativity. When the floor rises, the gap between a brand new starter and an experienced team member on a couple of dollars more narrows, and if a supervisor ends up on the same rate as the person they are training the pay structure stops doing its job. There is no legal requirement to pass the rise up the line, but many employers do, so the flow-on is modelled here as a separate figure you can turn up or down rather than being buried in the total. The last piece is on-costs: employer KiwiSaver and the ACC work levy apply to every extra dollar, and holiday pay quietly rises too because annual leave is paid at the rate in force when it is taken. It is built for owners and managers planning a March budget.

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$9,750
extra cost a year, including employer on-costs
Staff on the floor$5,616
Relativity flow-on$3,744
On-costs$390
Extra per week$188

The adult minimum wage is $23.95 an hour from 1 April 2026, with starting-out and training rates at $19.16. Holiday pay rises with the rate too, because annual leave is paid at the rate in force when it is taken, so any banked leave is revalued as well.

How it works

The direct cost lifts the staff who are on or near the floor from their current rate to the new minimum, across their weekly hours and fifty-two weeks. The relativity flow-on applies the rise you choose to the staff above the floor whose differentials you want to protect, over their own hours. On-costs then apply employer KiwiSaver and the ACC work levy to the whole increase, because both ride on every extra dollar of gross pay. The weekly figure divides the annual total by fifty-two, which is usually the more useful number for a business that manages to a weekly wage budget. Anyone already paid at or above the new minimum contributes nothing to the direct cost, so the calculator never produces a negative figure for a rate that did not need to move.

Worked example

A business has eight staff on $23.50 an hour working 30 hours a week, and the minimum wage rises to $23.95. That is 45 cents an hour each, which across 30 hours and 52 weeks is $702 a year per person, or $5,616 for the eight. To keep the gap intact, the owner also gives the same 45 cents to four more experienced staff working 40 hours, which is $936 each and $3,744 in total. The wage increase is therefore $9,360. Employer KiwiSaver at 3.5 percent and an ACC work levy of 0.67 percent add about $390, bringing the real cost to roughly $9,750 a year, or about $188 a week.

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Data sources: minimum wage rates are maintained against Employment New Zealand. Figures are checked twice monthly.

Frequently asked questions

When does the minimum wage change in New Zealand?

On 1 April each year. The new rate is normally announced around December, which gives employers roughly three months to budget for it. The adult rate is $23.95 an hour from 1 April 2026, and the starting-out and training rates are $19.16, both set at 80 percent of the adult rate.

Do I have to give a rise to staff already above the minimum wage?

There is no legal requirement to, but many employers do, because a rise in the floor compresses the gap between a new starter and an experienced team member. If a supervisor ends up on the same rate as someone they train, the pay structure stops working. This calculator lets you model that flow-on separately so you can see what maintaining relativities actually costs.

Does a minimum wage rise cost more than the wages themselves?

Yes. Employer KiwiSaver of at least 3.5 percent and the ACC work levy both apply to the increase, so the cash cost is several percent above the headline wage figure. Holiday pay also rises with the rate, because annual leave is paid at the rate in force when it is taken, which quietly revalues any leave your team has banked.