Three key changes for employers in 2026

A few recent and upcoming changes may impact your payroll, pricing, and employer obligations.
A quick check now sets you up for a smoother year ahead.

1. Minimum wage is increasing

From 1 April 2026, the adult minimum wage rises to $23.95/hr (from $23.50). Starting-out and training wages increase to $19.16/hr (from $18.80).

Make sure your payroll and employment agreements reflect the new rates. Higher wages can affect your margins, so now’s a good time to reassess your pricing structure. Speak to your client manager if you need help understanding what these changes mean for your bottom line.  

2. KiwiSaver contribution rates go up

Also starting 1 April 2026, the default KiwiSaver contribution rate increases from 3% to 3.5% for both employees and employers. Note employees are able to apply for temporary rate reductions to continue contributing at the 3% rate, in which case employers may also opt to match this employer contribution rate. Employer contributions will also now apply to KiwiSaver members aged 16 and 17. This is part of a phased retirement-savings policy change, with a further rise to 4% planned for 2028.

Review your payroll processes to make sure your contributions are applied correctly.

 3. Fringe Benefit Tax updates continue

Updated FBT thresholds and rate structures came into effect on 1 April 2025, with further refinements expected to be rolled out in 2026. Concessions such as equalisation of FBT and PAYE on unclassified benefits give you more flexibility in how FBT is calculated and means the tax rate applied better reflects what your employees earn.

Inland Revenue has also clarified how certain employee gift cards are taxed. Open-loop cards (such as prepaid cards that can be used almost anywhere) are generally treated like cash and taxed under PAYE, while retailer-specific cards usually still fall under FBT. If you provide vouchers or gift cards as staff rewards, it’s worth checking they’re being taxed under the right rules.