Payroll Bulletin 14
MINIMUM WAGE IS INCREASING ON 1ST APRIL 2025
Adult minimum wage will go up from $23.15 to $23.50 per hour.
Starting out and training minimum wage will go up from $18.52 to $18.80 per hour.
All rates are before tax and any lawful deductions, for example, PAYE tax, student loan repayment, child support.
HOW TO PREPARE FOR THE INCREASE
Advise the team. If you have employees on the minimum wage, let them know about the increase they will be getting. Send them a letter or an email (variation of employment contract) advising them of the new wage.
Check your payroll systems and processes. Make sure your payroll provider, accountant, lawyer, HR and finance team are ready to implement the change. If any of your employees are on starting out or training wages, now is a good time to check when they will be eligible to move onto the adult rate.
Make sure all any employment agreements (contracts) are current. Update contracts with any terms and conditions that were agreed to by both parties before the contracts were last reviewed. Make sure they include all the mandatory clauses a contract should have by law. Another useful tool is the employment agreement builder if your employees do not have one.
Update your business budget. You should add any expected increased costs to your short and medium-term budget forecasts. This will help you plan for and manage the effect of higher wage and holiday pay liabilities.
Upskill on minimum wage obligations. Now is also an ideal time to ensure you know the details around the minimum wage, including that:
it applies to all hours worked, unless both parties agree to a higher rate in the employment agreement.
it applies to employees paid with a salary or piece rates or commission.
Note the minimum wage does not apply in some situations including:
employees under 16 years of age
where a Labour Inspector has issued a minimum wage exemption permit to an employee who has a disability that limits them carrying out their work.
Source of information
Employment New Zealand https://www.employment.govt.nz/news-and-updates/minimum-wage-is-increasing-on-1-april-2025-are-you-readyIf you have any questions or need further information, please don't hesitate to contact Olga at olga@topflight.co.nz
