The start of a new financial year always brings a fresh wave of administrative updates, and April 2026 is bringing some of the most significant payroll shifts we’ve seen in recent years.

Whether you are an employer mapping out your annual budget or an employee wondering how your take-home pay will look, staying ahead of these updates is crucial. From a bump in the minimum wage to structural changes in KiwiSaver and ACC levies, here is a straightforward breakdown of exactly what changes on 1 April 2026 and how you can prepare. Many payroll systems take care of these changes, but some do have a few steps you have to take to ensure you’re up to date.

1. The Minimum Wage Increase

Following the government’s annual wage review, the minimum wage is getting a modest bump. It’s important for employers to update their payroll systems before the first pay cycle in April to remain compliant.

The New Rates (Effective 1 April 2026):

• Adult Minimum Wage: Increasing from $23.50 to $23.95 per hour

• Starting-Out and Training Minimum Wage: Increasing from $18.80 to $19.16 per hour (remaining at 80% of the adult minimum wage.

Employer Action Plan: Identify all employees currently earning below or close to the new rates and adjust them accordingly. Don’t forget to check your salaried employees who work long hours—their effective hourly rate must still meet the new minimum wage requirements. 

2. KiwiSaver Contributions Are Going Up

This is perhaps the biggest shift for 2026. As part of a staged government plan to boost retirement savings, the default KiwiSaver contribution rate is increasing.

The Key Changes:

• New Minimum Rate: The default contribution rate for both employees and employers is rising from 3% to 3.5%. (This is scheduled to rise again to 4% in 2028).

• Younger Workers: For the first time, 16- and 17-year-olds who are enrolled in KiwiSaver will become eligible for compulsory employer contributions.

• Temporary Rate Reductions: Employees who feel the pinch on their take-home pay can apply to Inland Revenue for a “temporary rate reduction” to stay at 3% for a period of 3 to 12 months. Employers can choose whether to match that 3% or maintain the 3.5% employer contribution.

Employer Action Plan: You will need to budget for the increased employer contribution costs. If you use a “total remuneration” approach for salaried staff (where KiwiSaver is bundled into their salary), you must ensure that factoring in the 3.5% rate doesn’t accidentally push their base pay below the new minimum wage.

3. ACC Levy Adjustments

ACC levies are updated annually to reflect the costs of the scheme, and this year brings a slight increase to the Earners’ Levy, which is deducted directly from employees’ wages.

The Key Changes:

• Earners’ Levy Rate: Increasing from 1.67% to 1.75% (per $100 of liable earnings).

• Maximum Liable Earnings: The cap on which the Earners’ Levy is charged is increasing from $152,790 to $156,641.

Because this levy is automatically deducted through PAYE, employees will notice a slight reduction in their net take-home pay.

Employer Action Plan: Ensure your payroll software is updated with the new ACC rates so that correct deductions are made automatically. If you have automatic payments set up for fixed wages, you will need to recalculate and amend those amounts.

Final Thoughts

Change can be a headache, especially when it impacts the bottom line and payroll administration. However, preparing your systems and your team now will ensure a smooth transition into the new financial year.

Communicate these changes clearly to your staff so they understand why their take-home pay or KiwiSaver deductions might look a little different come April. If you have any questions about how these updates impact your specific business, reach out to your accountant or payroll provider today.