Minimum Wage Rates - The minimum wage rates increase from 1 April 2026.  For an adult (employees aged 16 and over), the minimum wage rate will increase from $23.50/hour to $23.95/hour; for Starting Out and Training (criteria applies), the minimum wage rate will increase from $18.80/hour to $19.16/hour.

KiwiSaver Changes - The KiwiSaver contributions increase from 1 April 2026.  

The minimum contribution will increase from 3% to 3.5% for all eligible employees, the increase will apply to the employee contribution as well as the employer contribution.  The employee can apply through myIR for a temporary rate reduction which can keep their rate at 3% for a period of 3 months and up to 12 months, of which the employers contribution can match that lower rate of 3%, you will need to confirm this application with your employees; after 12 months the default rate will be 3.5%.  This will come into effect for all pays from 1 April 2026 even if the pay period started before 1 April 2026.

Previously for employees under 18, there has been no requirement for employers to contribute to their KiwiSaver if they have opted in.  From 1 April 2026 employees aged 16 or 17 will now qualify for employer contributions of 3.5% so longs as the other eligibility requirements are met.  

From 1 April 2028 the default contribution rate will be 4% for employee and employee contributions.

What do employers need to do?  In Xero payroll, you will need to manually review and update each employee in the new KiwiSaver tab, you can select employees on default rates and apply a default increase.  In Smartly payroll, the default rate will automatically update so no manual action is required.  In Crystal payroll, the default rate will automatically update so no manual action is required.  If any employees apply for a temporary rate reduction you may need to check and amend payroll; likewise any employee 16 or 17 you may need to double check, or any employee that receives higher than the minimum employer contribution.

Also remember to check employee ESCT rates if they are KiwiSaver contributors. Check the combined annual income plus employers gross KiwiSaver contributions for the 31 March 2026 year or their expected annual income for 31 March 2027 and amend their ESCT rate if their annual income has changed.

ACC Levy Changes - The ACC earner levy rate will increase from $1.67 to $1.75 per $100 of liable earnings from 1 April 2026. Additionally, the minimum liable earnings threshold will rise from $49,365 to $50,501 and the maximum liable earnings threshold will rise from $152,790 to $156,641 for the 2026/27 tax year, meaning the maximum ACC levy will increase from $2,551.59 to $2,741.22.  If you have employees receiving the same gross pay each period, they may notice a slight decrease in their net take home pay as a result of the extra 8 cents being deducted for every $100 earned.

The rates have also been set for future years.  The ACC earner levy rate will increase from $1.75 to $1.83 per $100 of liable earnings from 1 April 2027 (2028 year).  Minimum liable earnings will rise to $51,652 and the maximum liable earnings rates also rise to $160,244 over this same period, for the 2028 year the maximum levy payable will be $2,932.47.

Student Loans Changes - The annual repayment threshold is not changing, this remains at $24,128.  

Residential Rental Interest Deductibility - Changes to the residential property interest deductibility to came into effect from 1 April 2024.  Interest deductibility was reintroduced from the 2025 financial year to be phased back in.  For the 2026 year onwards the interest claim will be 100% (previously this was to be 0%). 

While there appears to be a number of tax changes there are more to come.  IRD will release new rates for as part of their annual release for the likes of Motor Vehicle Mileage reimbursement, Home Office reimbursements and Standard Cost Household Services for boarders and short-stay accommodation providers.  These will likely be available end of May 2026.