Starting 1 May 2025, the New Zealand minimum wage will officially increase, delivering important changes for workers and employers alike.
This modest yet significant adjustment reflects both economic stability and a renewed focus on ensuring fair compensation amid a recovering economy.
Here’s everything you need to know about the new minimum wage rates, how they impact workers, and what businesses should do to prepare.
Current and New Minimum Wage Rates (Effective 1 May 2025)
The Workplace Relations and Safety Minister confirmed that the adult minimum wage will increase by 1.5%, moving from $23.25 to $23.50 per hour. Meanwhile, starting-out and training wages will rise from $18.52 to $18.80 per hour, maintaining 80% of the adult wage.
| Category | Current Rate | New Rate (from 1 May 2025) |
|---|---|---|
| Adult Minimum Wage | $23.25/hour | $23.50/hour |
| Starting-Out Wage | $18.52/hour | $18.80/hour |
| Training Minimum Wage | $18.52/hour | $18.80/hour |
All figures are before tax and any deductions such as PAYE, student loans, or child support obligations.
For a typical 40-hour workweek, the $0.35/hour increase translates to an additional $14 per week before tax — a welcome boost for over 141,000 workers who currently earn between the old and new wage rates.
Why Is the Minimum Wage Increasing in 2025?
The New Zealand Government decided on this increase to balance economic growth with living cost pressures. After more than three years, inflation has returned to the Reserve Bank’s target range, offering the opportunity to implement wage growth without threatening overall economic stability.
The government’s goal is to ensure that wages keep pace with the cost of living, while also supporting business sustainability across industries like hospitality, retail, and healthcare, where minimum wage workers are most concentrated.
Minimum Wage Exemptions for Workers with Disabilities
Employers can apply for a minimum wage exemption permit for workers whose disabilities significantly affect their job performance. Conditions for obtaining a permit include:
- Employee’s agreement to the exemption
- Proof that reasonable accommodations were explored and attempted
- Justification that the exemption is necessary and beneficial for both parties
All exemption applications are assessed by the Labour Inspectorate, ensuring fairness and adherence to employment standards.
What Employers Need to Do Before 1 May 2025
To remain compliant, employers should:
- Notify employees earning the minimum wage about their upcoming increase, preferably with a formal written notice or updated employment agreement.
- Update payroll systems to reflect the new hourly rates correctly.
- Review training and starting-out wages to ensure workers transition appropriately to the full adult minimum wage as they qualify.
- Adjust pay structures to maintain fair wage gaps between entry-level and higher-skilled employees.
- Update budgets to account for higher payroll costs, including salary, annual leave, and any related entitlements.
Stay Compliant with Minimum Wage Laws
The minimum wage rules apply to:
- All hours worked, regardless of whether employees are paid hourly, salary, commission, or piece rates.
- All employees aged 16 and above, unless they hold an approved exemption permit.
The 2025 minimum wage increase in New Zealand highlights a positive step towards balancing worker welfare with economic recovery.
Although the rise is relatively modest, it will improve incomes for thousands of workers.
For employers, the time to act is now — updating payroll systems, notifying employees, and adjusting budgets will ensure a smooth transition ahead of the 1 May 2025 implementation date.
FAQs
When will the new minimum wage come into effect in New Zealand?
The new rates will officially apply from 1 May 2025 across all eligible workers.
How much is the new adult minimum wage in 2025?
The adult minimum wage will increase to $23.50 per hour starting 1 May 2025.
Are there exemptions to the minimum wage laws?
Yes, workers with significant disabilities may receive an exemption permit upon approval from the Labour Inspectorate.