Starting 1 April 2025, New Zealand’s minimum wage is getting a small bump. The adult minimum wage will rise from $23.25 to $23.50 an hour. This change, though just a 35-cent increase, is part of the government’s broader plan to protect workers’ income and help them keep up with living costs.
The same increase pattern will apply to those earning starting-out or training wages. Their new rate will be $18.80 per hour, up from $18.52. This move is expected to benefit nearly 142,000 workers across the country, putting more money into their pockets weekly and yearly.
Even though the raise might seem minor, it holds great meaning. For low-income earners, every extra dollar helps cover everyday needs like groceries and rent. For the government, it shows a commitment to fair pay while carefully managing inflation and supporting a stable economy.
How Workers Will Benefit From the Change
The wage increase will bring several positive outcomes for employees:
| Wage Category | Previous Rate (2024) | New Rate (2025) | Increase Amount | Percentage Increase |
|---|---|---|---|---|
| Adult Minimum Wage | $23.25 per hour | $23.50 per hour | $0.35 | 1.5% |
| Starting-Out Minimum Wage | $18.52 per hour | $18.80 per hour | $0.28 | 1.5% |
| Training Minimum Wage | $18.52 per hour | $18.80 per hour | $0.28 | 1.5% |
- More Weekly Pay: Full-time workers on minimum wage will take home an extra $14 per week before taxes.
- Protection Against Inflation: Prices are more stable now, so this raise helps workers keep their buying power strong.
- Boost in Spending: With more money to spend, workers can support local shops and businesses.
- Help for Young Workers: Those earning starting-out or training wages will also enjoy better pay, helping reduce income gaps.
This move supports not just financial needs, but also worker morale, especially for those just entering the job market.
What Employers Should Do to Get Ready
Businesses must plan ahead to handle the new wage rates effectively. Here’s what they should focus on:
1. Inform Your Staff
Let your workers know about the new wage rates. Update their contracts and send out clear communication through email or official letters.
2. Update Payroll Systems
Ensure all payroll software or records are adjusted to reflect the new rates by 1 April 2025. Mistakes could lead to legal troubles.
3. Review Pay Structures
If some employees earn just slightly more than minimum wage, they might ask for raises too. Businesses should prepare to handle these discussions.
4. Revise Budgets
Higher wages mean increased costs. Review your business’s budget and adjust financial forecasts accordingly, especially if you’re a small business.
5. Invest in Training
Better-paid workers often stay longer and work harder. Consider offering training programs to increase productivity and make the wage increase more worthwhile.
Special Wage Rules for Workers With Disabilities
Some workers with disabilities may be eligible for a Minimum Wage Exemption Permit, but there are clear rules:
- The employer must show the disability affects the employee’s ability to do the job.
- The employee must agree to the exemption.
- Employers must first try to adjust the job to suit the worker before asking for an exemption.
This ensures that disabled workers are treated fairly and that exemptions are not misused.
Economic Impact Beyond Wages
The 2025 wage rise doesn’t just affect paychecks. It plays a bigger role in the country’s economy:
– Increased Spending in Communities
With more money in workers’ pockets, businesses—especially in retail and hospitality—could see more customers and sales.
– Challenges for Small Businesses
Small companies may feel the pressure of higher payroll costs. They might need to reduce other expenses or rethink their business models.
– Controlled Inflation
The 1.5% raise was carefully chosen to avoid pushing prices up. It balances supporting workers without causing economic instability.
– Better Workforce Motivation
When workers feel fairly paid, job satisfaction often improves. This leads to better performance, loyalty, and a stronger economy in the long run.