From 1 April 2026, a number of key employment and payroll changes will take effect in New Zealand. Updates to KiwiSaver contribution rates and increases to the minimum wage will impact both employers and employees. Here’s a summary of what’s changing and what you need to be aware of.
Default contribution rate increase
From 1 April 2026, the default KiwiSaver contribution rate will increase from 3% to 3.5% for both employees and employers.
Temporary rate reduction option
If an employee wishes to continue contributing at 3% from 1 April 2026, they can apply for a temporary rate reduction from 1 February 2026. This may be appropriate if they are unable to afford the increase or prefer to allocate savings elsewhere.
- Temporary reductions can be approved for a period between 3 months (92 days) and 12 months.
- Employees may apply for a temporary rate reduction as many times as needed.
- Employers can choose whether to match the temporary reduced rate.
- When the employee moves back to a higher contribution rate, Inland Revenue will notify the employer.
Minimum wage increase
The Government has confirmed increases to minimum wage rates effective 1 April 2026
New rates:
- Adult minimum wage: $23.95 per hour (up from $23.50)
- Starting-out and training wage: $19.16 per hour (80% of the adult rate, up from $18.80)
What this means:
- A full-time employee (40 hours per week) on minimum wage will earn:
- $18 more per week
- $936 more per year (before tax)
Approximately 122,500 workers are expected to benefit from this increase
What employers should do before 1 April 2026
✅ Update payroll systems to reflect new minimum wage rates
✅ Adjust KiwiSaver employer contribution rates to 3.5%
✅ Be aware of employees applying for temporary KiwiSaver rate reductions
✅ Budget for increased wage and contribution costs