INDUSTRY NEWS • 19 MARCH 2024 • 2 MIN READ
Minimum wage is increasing from 1 April 2024
From the 1st of April, employers across New Zealand need to be prepared for the upcoming minimum wage increase. This change will impact businesses of all sizes, from sole traders to large corporations. To ensure compliance and avoid potential penalties, it's essential to understand the details of the minimum wage hike and take appropriate action. We've outlined everything employers need to know to get ready for this transition.
Details of the minimum wage increase
- On April 1st, 2024, the minimum wage in New Zealand will increase
- The new minimum wage rates will apply to all employees aged 16 and over
- The new minimum wage rates will vary depending on the employee's age and whether they are starting out or training
- For adult employees (aged 16 and over) not starting out or training, the new minimum wage rate will increase from $22.70 to $23.15 per hour
- For starting-out and training employees, the minimum wage rates will also increase from $18.16 to $18.52 per hour
These rates represent gross wages or gross income, which are the amounts earned by employees before any taxes or deductions, such as PAYE tax, student loan repayments, or child support. Employers need to ensure that their employees receive at least the minimum wage rate to comply with employment law.
If you haven't already done so, now is the ideal time to consult with your Beany accountant. We also suggest taking this opportunity to review your employment records, processes, and systems to ensure they are all up to date.
Impact on New Zealand businesses
As the minimum wage increase approaches, it's important for businesses to be proactive. The upcoming minimum wage increase may pose financial challenges for businesses, particularly those with a significant workforce. Now is the time to evaluate how the higher wage rates will impact your budget and financial projections.
Here are three steps you should take to ensure a smooth transition:
- Advise any employees on minimum wage that the rate is changing, inform them of the increase they will receive and update contractual agreements as needed.
- Conduct a thorough review of your payroll systems to ensure you can accommodate the updated wage rates. Take the time to check for any necessary adjustments or updates needed to accurately reflect the new minimum wage in your payroll processes.
- Planning ahead is key to mitigating any potential disruptions to business operations. Factor in the increased labour costs into your budgeting and forecasting to maintain smooth operations and avoid any unexpected challenges as a result of the minimum wage increase.
Meeting compliance
Employers must ensure compliance with the new minimum wage rates effective from April 1st onwards to avoid penalties and legal consequences associated with failing to pay employees at least the minimum wage. It’s necessary to promptly update employment contracts and payroll systems to accurately reflect the new wage rates and ensure adherence to legal requirements. You can learn more about the minimum wage increase here.
If you’re unsure of what steps to take, or have questions, please contact our support team at 0800 755 333, or support@beany.nz.
Who are Beany?
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