As you start preparing budgets, workforce planning and cost forecasts for the 2026/27 financial year, now is the ideal time to factor in confirmed changes taking effect on 1 April 2026. These changes will increase payroll-related costs for all employers, and early planning will help you avoid surprises later.
Minimum Wage - from 1 April 2026, the adult minimum wage will rise to $23.95 per hour.
Even small increases at the lower end of your pay structure can affect the rest of your workforce. Remember to consider:
- Overtime and penal rates
- Allowances and premiums
- Pay relativities if you have roles grouped closely together on your pay scale
If you have employees on, or slightly above, the minimum wage, now is a good time to assess:
- Whether pay adjustments are needed to maintain internal equity
- The impact on salaried employees whose annualised pay may sit close to minimum wage when converted to hourly rates
- How this change fits within your broader remuneration strategy
KiwiSaver Contributions Increasing to 3.5%
Another confirmed change from 1 April 2026 is the increase to compulsory employer and employee KiwiSaver contributions, which will move from 3 percent to 3.5 percent.
This applies to all eligible employees who are contributing to KiwiSaver and represents a direct payroll cost increase.
Temporary rate reductions can be applied for from 1 February 2026. This is for employees who want to keep the 3% employee contribution rate for a period of 3 months to 1 year from 1 April 2026.
Consider reviewing:
• Payroll cost projections for the 2026/27 year for the extra 0.5%
• Offers to new hires, especially if you use total remuneration packages
• Cash flow timing and monthly payroll impacts
Living Wage movements are normally announced in early April so we will further update on that once that movement is known.
What You Should Do Now
To stay ahead of these changes:
1. Update your 2026/27 budget forecasts to include the increases.
2. Review your remuneration framework, particularly roles clustered around minimum wage.
3. Check pricing, contracts and service rates, especially where payroll cost increases may need to be passed through.
4. Ensure staff know how to apply for a Temporary rate reduction if they wish to do so.
We regularly support employers with remuneration planning, pay structure reviews, pay benchmarking and preparing communications for employees. If you would like support modelling the impact for your business or reviewing your approach before the new rates take effect, get in touch.