If you employ staff or apprentices and haven't updated your wage rates yet, you're already behind. The adult minimum wage increased to $23.95 per hour on 1 April 2026 — up from $23.50, a 2% rise.
That might sound small, but it flows through into job costings, quotes, and annual payroll in ways that catch some businesses off guard if they don't update their numbers promptly.
The New Rates from 1 April 2026
| Wage type | Old rate | New rate from 1 April 2026 |
|---|---|---|
| Adult minimum wage | $23.50/hr | $23.95/hr |
| Starting-out wage | $18.80/hr | $19.16/hr |
| Training wage | $18.80/hr | $19.16/hr |
The starting-out and training wages remain at 80% of the adult minimum wage.
Around 122,500 NZ workers are directly affected — those currently earning below the new threshold automatically get a pay increase.
What This Means If You're Paying Apprentices
Apprentices in their first year are often paid at or near the training minimum wage ($19.16/hr from April 2026). If your apprentice was on $18.80, you now need to be paying at least $19.16.
For a first-year apprentice working 40 hours per week, that's an increase of $36/month or approximately $432/year — modest, but real.
Beyond the minimum, most apprentices in trades like building, electrical, and plumbing are typically paid above minimum wage even in year one. The real wage pressure is usually in years 2–4 when their productivity has increased and they expect their pay to reflect it.
Use the Labour Cost Calculator to model the full employment cost including KiwiSaver (3% employer contribution), ACC levies, and leave entitlements. The total cost of an employee is typically 20–25% above their gross wage.
The Knock-On Effect on Your Quote Rates
Here's what often happens: the minimum wage goes up, businesses update payroll, but forget to update their charge-out rates. A few weeks later they're delivering jobs priced on old labour costs and wondering why margins are tighter.
If your quoted charge-out rate for labour was based on wage costs from six months ago, it's worth reviewing now.
Example: How $0.45/hr feeds into a job
Say you have two employees (or yourself + one employee) working a job priced three months ago.
- Additional wage cost: $0.45/hr × 2 people = $0.90/hr
- On a 40-hour job: $0.90 × 40 = $36 in additional labour cost
- On a 200-hour job: $0.90 × 200 = $180
For a sole trader this doesn't directly apply (you set your own rate), but for businesses with staff, unreviewed labour rates are a slow margin leak.
Updating Your Hourly Rate
The Hourly Rate Calculator lets you input your actual wage costs and desired margin to calculate what you should be charging per hour. Key inputs to update:
- Gross wage (your employees): Check against the new minimums
- Employer KiwiSaver: 3% of gross wage
- ACC employer levy: Currently around 1.39% for most trade categories (check your rate with ACC)
- Leave provision: Annual leave (8% of gross), sick leave, public holidays
Once you've got the true employment cost, you can check whether your current charge-out rate still covers it with the margin you need.
What If You Pay Well Above Minimum?
If your team earns $30–$40/hr, this change doesn't directly affect your payroll — you're already above the new threshold. But it does affect the broader market in a few ways:
Subcontractor rates will drift up. Subbies who employ staff will face the same wage pressure and will likely adjust their rates. If you're quoting jobs that rely on subcontractor pricing, get updated rates from your subs before locking in quotes.
Labour availability. The construction industry runs on wage competition for skilled workers. A minimum wage rise tends to compress the gap between unskilled and semi-skilled rates, which can trigger wage drift across the board as workers seek rates that reflect the relative premium of their skills. Don't be surprised if journeyman tradies start asking for rate reviews.
Apprentice cost floor. The training wage increase raises the floor cost of taking on a first-year apprentice. In combination with the Apprenticeship Boost ($500/month for year-one apprentices in targeted trades), the economics still work — but it's worth re-running your numbers.
Compliance: Make Sure You're Paying Correctly
Paying below the minimum wage — even accidentally — can result in a complaint to the Labour Inspectorate and a back-pay order. If you have staff on rates close to the old minimum ($23.50), double-check that payroll has been updated effective 1 April.
The compliance steps:
- Check all employee rates against the new $23.95 floor (or $19.16 for starting-out/training wages)
- Update payroll software — most NZ payroll systems (Xero Payroll, MYOB, PayHero) should have prompted you to confirm compliance, but verify it's been applied
- Issue updated pay slips confirming the new rate
- Update any employment agreements that specify an exact dollar rate tied to the old minimum
If you're using Xero or MYOB for payroll, they typically flag the rate change and walk you through updating employee records.
Updating Your Quotes for the Rest of 2026
A practical approach: review your standard quote templates and the labour rate you're using as the basis for pricing. If you've been quoting $X/hour all-in for labour, run the numbers on whether that still holds with the April wage increase factored in.
For most well-priced tradie businesses, a 2% wage increase on the minimum wage won't be the thing that breaks a quote. But in tight-margin work — particularly in competitive tender environments — every dollar matters.
Use the Job Cost Calculator to rebuild your standard job cost template with updated inputs and confirm your margins are where you need them.
Key Dates
- 1 April 2026: New minimum wage took effect ($23.95 adult / $19.16 starting-out and training)
- Now: If you haven't updated payroll, do it immediately — you're already a few weeks behind
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