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Minimum Wage Increase

Just a reminder, the New Zealand minimum wage rate is set to increase again. 

From the 1st of April 2024, it will rise from $22.70 to $23.15 per hour. 

The starting-out minimum wage is also getting an increase from $18.16 to $18.52 per hour. 

Both rates are before tax and any deductions, such as PAYE tax, student loan repayment or child support.

Minimum wage applies to employees paid for the hours they are contracted to work along with employees on a salary or commission.

Note the minimum wage does not apply in some situations including:

  • employees under 16 years of age

  • where a Labour Inspector has issued a minimum wage exemption permit to an employee who has a disability that limits their workload performance.

With these small increases, here are some things to think about …

  1. Talk to the team - Businesses that have employees who are on minimum wage will need to be notified about the increase they will be getting. This should be done either via letter or email so that the employee has a record of the employer letting them know about their new wage.

  1. Update payroll systems and processes - If you haven’t done so already, now is the time to make sure that your payroll provider or for those of you who do payroll yourselves, it’s important to check that your settings will be adjusted for these new rates.  

  1. Is anyone on the Starting-Out Wage? - This is also a good time for anyone employing people using starting-out wages to check when those employees will be eligible to move on to the adult rate.

  1. Contracts - Do your employees have a current contract? And are they up to date? If not, now would also be a good time to review these. Make sure you update the contract with any terms and conditions that have already been agreed upon by both parties before the contract has last been signed. Make sure to check that they include all standard mandatory clauses that a contract should have.

  1. Pay increase impact on your business - During this time leading up to the wage increase you may also want to take the time to run your numbers and also consider the potential impact on your business revenue and other employees. 

For instance, look at how employees are being paid in comparison to each other, as well as how your pay rates compare to others in the same industry. This might mean that employees with higher pay rates may choose to negotiate a pay increase to keep the relative difference.

Also, make sure to adjust both your short and medium-term budget forecasts to account for this wage increase and add any other expected cost increases. 

If you are uncertain about the minimum wage increase don’t hesitate to get in contact with us. We are more than happy to walk you through any questions you may have.


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