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The Government will lift the adult minimum wage by 2 percent to $23.95 an hour from April 1, 2026, a move Workplace Relations and Safety Minister Brooke van Velden says balances pressures on workers with the rising costs faced by businesses.
The increase is expected to benefit about 122,500 workers.
Van Velden says the decision reflects the coalition commitment between National and New Zealand First to deliver “moderate” minimum wage rises each year rather than the larger increases seen previously.
“This new rate strikes a balance between keeping up with the cost of living and not adding further pressure on the costs of running businesses,” she says.
“I know those pressures have made it a tough time to do business, which is why we have taken this balanced approach. With responsible economic management, recovery and relief is coming.”
Inflation is projected to sit at around 2 percent from June 2026, and van Velden says the moderate rise is intended to help workers keep pace with living costs without exacerbating wage compression, the narrowing of pay differences between low, mid and higher-skilled roles.
She says easing wage compression and supporting youth employment were key considerations.
“Past minimum wage increases have reduced the differentiation in pay between workers based on skills, experience or performance. The moderate increases agreed to by this Government for the 2024 and 2025 minimum wage decisions have started to ease this trend.
“It is also important that minimum wage rates support young people to gain employment. Ensuring a balanced minimum wage rate enables young people to have access to entry-level jobs that can set them up for greater future success.”
The starting-out and training minimum wages will rise to $19.16 an hour, remaining at 80 percent of the adult rate.
Van Velden says the Government remains focused on policies designed to boost economic growth and create more opportunities for New Zealanders.
The annual review of minimum wage rates is required by law.
