What's Changing on 1 April 2026? A Guide for Kiwi Businesses and Families

The new financial year is almost here, and there are some important changes landing on 1 April that could affect your pay, your business, and your household budget. Whether you're an employer running payroll or an employee wondering why your pay looks a bit different, here's what you need to know — no accounting degree required.

Minimum Wage Is Going Up

The adult minimum wage is rising from $23.50 to $23.95 per hour — that's an extra 45 cents an hour. If you work 40 hours a week on minimum wage, you'll see roughly $18 more in your pay packet each week (before tax).

The starting-out and training wages (for some younger workers) are also going up to $19.16 per hour.

If you're an employer: Check your team's pay rates now. Anyone earning between $23.50 and $23.95 needs a pay rise before your first April pay run. You'll also need to send them a quick letter or email confirming the change — it counts as a variation to their employment agreement.

KiwiSaver Default Rate Goes From 3% to 3.5%

This is probably the biggest change to get your head around.

If you (or your employees) are contributing to KiwiSaver at the default rate of 3%, that's going up to 3.5% from 1 April. This applies to both the employee's contribution and the employer's matching contribution.

What does that actually mean? A bit less in your take-home pay each week, but more going into your KiwiSaver for the future. For every $1,000 of gross pay, an extra $5 will come out of your wages, and your employer will also put in an extra $5.

A few important details:

• It's the pay date that matters, not the pay period. If your pay day falls on or after 1 April, the new 3.5% rate applies to the whole pay — even if some of the days worked were in March.
• 16 and 17-year-olds who are KiwiSaver members now qualify for employer contributions too. Previously this only kicked in at age 18.
• Want to stay at 3%? Employees can apply to Inland Revenue through myIR for a temporary rate reduction. No proof of hardship needed — it lasts 3 to 12 months. If an employee gets approved, their employer can choose to match the lower rate too.
• Heads up: A further increase to 4% is already locked in for 1 April 2028.

If You Use Xero for Payroll

Xero has released a bulk update tool to help you change employee KiwiSaver rates. You can find it from the employee list screen, where you can select employees on the default rate and update them to 3.5% in one go.

However, some changes still need to be done manually through each employee's profile under the KiwiSaver tab in Payroll > Employees. You'll need to do this for:

• Employees with an approved temporary rate reduction (keeping them at 3%)
• Any 16–17-year-old employees now eligible for employer contributions
• Pay runs processed after 1 April that relate to the old financial year (these may need to be temporarily set back to 3%)

If you use other payroll software (iPayroll, PaySauce, Smartly, etc.), most will handle the update automatically — but it's worth double-checking with your provider.

ACC Earners' Levy Is Going Up Too

The ACC earners' levy — the bit that gets taken out of your pay to fund ACC's injury cover — is increasing from $1.67 to $1.75 per $100 of earnings.

This is deducted automatically as part of your PAYE, so you don't need to do anything as an employee. But you will notice a small dip in your take-home pay on top of the KiwiSaver change.

The maximum earnings that the levy applies to is also going up from $152,790 to $156,641.

If you're an employer: Your payroll software should update this automatically. But if you're running payroll manually or using the IRD's PAYE calculator, make sure you're using the updated 2027 tax year tables from 1 April. The income tax rates themselves haven't changed — the tables are just recalculated to reflect the new ACC levy rate.

$50 a Week Fuel Relief for Working Families

With petrol prices shooting past $3 a litre due to the conflict in the Middle East, the Government has announced a temporary boost to the in-work tax credit to help families doing it tough.

Starting from 7 April 2026, around 143,000 working families with children will receive an extra $50 per week. About 14,000 more families will also become newly eligible at a reduced rate.

Who qualifies?

• At least one parent must be working (employed or self-employed)
• You can't be on a main benefit from Work and Income
• You must have dependent children
• Your household income needs to be within the eligible thresholds

The money goes straight into your bank account — weekly from 7 April, or fortnightly from 14 April. It's not a discount at the pump — it's a payment through the Working for Families system.

The boost lasts for one year, or until 91 octane petrol drops below $3 per litre for four weeks in a row, whichever comes first.

If you already receive the in-work tax credit, the increase should apply automatically.

Your 1 April Checklist

For Employers

• [ ] Pay rates: Check all employee pay rates. Anyone earning between $23.50 and $23.95/hour needs a pay increase to at least $23.95
• [ ] Employment agreements: Send a letter or email to affected employees confirming their new rate
• [ ] KiwiSaver rates: Update all employees on the default 3% rate to 3.5% (both employee and employer contributions)
• [ ] Young workers: Check if any 16–17-year-old employees are KiwiSaver members — they now need employer contributions
• [ ] Temporary rate reductions: If any employees have been approved to stay at 3%, make sure their profile reflects that (and note the expiry date)
• [ ] ESCT rates: Review the Employer Superannuation Contribution Tax rate for each KiwiSaver member based on their expected income for the new year
• [ ] Payroll software: Confirm your system has been updated with the new ACC earners' levy rate ($1.75 per $100) and the updated PAYE tax tables
• [ ] Manual payroll users: If you use IRD's PAYE calculator, switch to the 2027 year tables from 1 April
• [ ] Budget: Factor in the higher employer KiwiSaver contributions and ACC levy when planning your wage costs
• [ ] Talk to your team: Let employees know their take-home pay may be slightly lower due to the KiwiSaver and ACC changes — a quick heads-up avoids confusion and frustration

For Employees and Families

• [ ] Check your pay slip after 1 April to make sure everything looks right — your KiwiSaver rate, ACC deduction, and minimum wage (if applicable)
• [ ] Want to stay at 3% KiwiSaver? Apply for a temporary rate reduction through myIR — no proof of hardship needed
• [ ] Working family with kids? Check if you're eligible for the extra $50/week fuel relief through Working for Families
• [ ] Under 18 and in KiwiSaver? You should now be receiving employer contributions — check your pay slip to confirm