Minimum Wage to Increase by 1.5% to $23.50 per Hour in April 2025 Workplace Relations

Minister Brooke van Velden announces moderate wage increase as part of coalition commitment.

Workplace Relations and Safety Minister Brooke van Velden has announced that the adult minimum wage will rise by 1.5 percent to $23.50 per hour, effective from April 1, 2025. This increase fulfils the NZ First-National coalition’s commitment to moderate annual adjustments to the minimum wage, reflecting current economic conditions and the state of the labour market.

A Balanced Approach to Economic Recovery

Minister van Velden explained that the modest increase strikes a balance between supporting workers and managing the potential costs for businesses in an economy still recovering from high interest rates and recessionary pressures.

“The New Zealand economy is still recovering from a sustained period of economic challenges, including high interest rates and a period of recession. In this context, a measured increase in the minimum wage ensures we support workers without imposing excessive costs on businesses that are still finding their feet,” van Velden said.

The Government also acknowledged the progress made in managing inflation, which has now returned to the Reserve Bank's target range for the first time in over three years.

“Supporting New Zealand’s economic recovery means we must balance wage increases with the need to provide a stable environment for businesses to thrive and continue offering employment opportunities,” the Minister added.

Consideration for Young Workers and Future Prosperity

The minimum wage increase is also designed to reflect the Government’s commitment to reducing the number of people on Jobseeker Support while ensuring youth employment opportunities are not hindered. Young people, who are often more likely to be employed at the minimum wage, will benefit from this balanced approach, which ensures they have access to jobs that can provide valuable experience and life skills.

“The skills young workers gain in minimum-wage jobs are crucial to their future success. It’s essential that we avoid a situation where young people are locked out of employment opportunities as the minimum wage rises,” van Velden said.

Early Announcement to Support Employers

In a move to assist businesses in preparing for the upcoming wage increase, van Velden announced the change ahead of Christmas, providing employers more time to adjust their payroll systems. Historically, minimum wage adjustments were announced in February, leaving businesses just two months to prepare.

This announcement will give employers a more substantial lead time, allowing them to plan for the wage increase more effectively.

Rates for Starting-Out and Training Minimum Wage

Additionally, the starting-out and training minimum wage rates will be set at $18.80, maintaining the standard of 80 percent of the adult minimum wage, ensuring that young and trainee workers also receive fair compensation for their work.

Summary of Key Details:

Adult minimum wage will increase by 1.5% to $23.50 per hour, effective April 1, 2025.

The starting-out and training rates will remain at $18.80, or 80% of the adult minimum wage.

The increase reflects a balanced approach between supporting workers and managing business costs amid current economic conditions.

This announcement provides employers with early notice to make adjustments, allowing them time to prepare.

Van Velden concluded, “This increase strikes the right balance and ensures that New Zealanders are supported through ongoing recovery while safeguarding job opportunities for young people and keeping our businesses competitive.”