Minimum Wage NZ 2026 – What You Must Pay
From 1 May 2026, New Zealand’s minimum wage rates increase. This guide covers the adult minimum wage, starting-out wage, and training wage, plus rules for tip workers, piece rates, and commission. It also explains how the Labour Inspectorate enforces these rules. Use this to stay compliant and avoid penalties.
Key rule: All employees (including casual, part-time, fixed-term, and homeworkers) must be paid at least the minimum wage for every hour worked — unless an exemption applies (e.g., starting-out or training wage). See s 6 of the Minimum Wage Act 1983.
Minimum wage rates from 1 May 2026
The following rates apply from 1 May 2026 (as set by the Minimum Wage Order 2026):
- Adult minimum wage: $24.50 per hour (up from $23.50 in 2025)
- Starting-out wage: $19.60 per hour (80% of adult rate)
- Training wage: $19.60 per hour (80% of adult rate)
Warning: Paying below these rates is a breach of the Minimum Wage Act 1983. The Labour Inspectorate can issue a penalty of up to $20,000 for an individual or $40,000 for a company per breach (s 13). You may also be ordered to pay arrears.
Who gets the adult minimum wage?
All employees aged 16 years or over who are not starting-out workers or trainees must be paid the adult minimum wage. This includes:
- Full-time, part-time, casual, and fixed-term employees
- Homeworkers (s 5 of the Act)
- Piece rate and commission workers (see below)
There is no age exemption for the adult rate — if you’re 16 or over and not a starting-out worker or trainee, you get $24.50/hour.
Starting-out wage
The starting-out wage ($19.60/hour) applies to:
- Employees aged 16–19 years who have been with their current employer for fewer than 6 months (continuous employment)
- Employees aged 16–19 years who are on a recognised industry training programme (e.g., apprenticeship) for the first 6 months
- Employees aged 20 years or over who are on a recognised industry training programme for the first 6 months (if they have not completed a similar programme before)
Key rule: The 6-month period resets if the employee changes employers. But if they stay with the same employer, after 6 months they must be paid the adult rate. See s 4A of the Act.
Warning: You cannot pay the starting-out wage to someone aged 20+ who is not on a recognised training programme. Doing so is a breach. Also, the starting-out wage does not apply to employees who have already completed 6 months with any employer — check their work history.
Training wage
The training wage ($19.60/hour) applies to employees aged 20 years or over who are doing recognised industry training (e.g., a Level 2–4 qualification) for the first 6 months of that training. After 6 months, they must be paid the adult rate.
For employees aged 16–19 on a training programme, the starting-out wage rules apply instead (see above).
Key rule: The training wage only applies if the employee is enrolled in and actively working towards a recognised qualification. You must keep records of the training agreement. See s 4B of the Act.
Tip workers, piece rates, and commission
Minimum wage rules apply differently for these payment types:
Tip workers
Tips and gratuities do not count towards the minimum wage. You must pay at least the minimum wage before tips. If an employee receives tips, those are extra — you cannot use them to top up wages to meet the minimum. See s 6(2) of the Act.
Piece rates
Piece rate workers (paid per item produced, e.g., fruit picking) must still earn at least the minimum wage for each hour worked. If the piece rate does not achieve this, you must top up the pay. Calculate the total pay for the hours worked and divide by hours — if it’s below $24.50/hour, you owe the difference. See s 6(3) of the Act.
Commission
Commission-only or base-plus-commission workers must also meet the minimum wage test. If commission is less than the minimum wage for the hours worked, you must pay the shortfall. Commission cannot be used to avoid paying the minimum wage. See s 6(4) of the Act.
Warning: If you pay piece rates or commission and do not top up to the minimum wage, the Labour Inspectorate can require you to pay arrears plus penalties. Always track hours worked and calculate the effective hourly rate.
Labour Inspectorate enforcement
The Labour Inspectorate (part of MBIE) enforces minimum wage compliance. They can:
- Conduct investigations (with or without notice)
- Issue improvement notices requiring you to fix breaches
- Issue penalties of up to $20,000 (individual) or $40,000 (company) per breach
- Order payment of arrears (back wages owed)
- Take you to the Employment Relations Authority for serious or repeated breaches
You must keep accurate wage and time records for at least 6 years (s 130 of the Employment Relations Act 2000). Records must show hours worked, wages paid, and any deductions.
Key rule: If an employee complains or the Inspectorate finds a breach, you must pay arrears from the date the breach started (up to 6 years back). Interest may also apply.
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Frequently asked questions
What is the minimum wage in NZ from May 2026?
The adult minimum wage is $24.50 per hour. The starting-out wage and training wage are both $19.60 per hour (80% of the adult rate). These rates apply from 1 May 2026.
Who qualifies for the starting-out wage?
Employees aged 16–19 who have been with their current employer for fewer than 6 months, or employees aged 16–19 on a recognised industry training programme for the first 6 months. Also, employees aged 20+ on a recognised training programme for the first 6 months (if they haven’t completed a similar programme before).
Can tips be used to meet the minimum wage?
No. Tips and gratuities do not count towards the minimum wage. You must pay at least the minimum wage before tips are added.
How do piece rates and commission work with minimum wage?
Piece rate and commission workers must still earn at least the minimum wage for each hour worked. If the piece rate or commission does not achieve this, you must top up the pay to meet the minimum.
What happens if I pay below the minimum wage?
The Labour Inspectorate can issue penalties of up to $20,000 for individuals or $40,000 for companies per breach, and order you to pay arrears (back wages) for up to 6 years.
Do I need to keep records of hours worked?
Yes. You must keep accurate wage and time records for at least 6 years, including hours worked, wages paid, and any deductions. This is required under the Employment Relations Act 2000.