New Zealand raises minimum wage from April 1
- Charles Chau
For people working 40 hours a week on the minimum wage, the government has estimated that they will get NZ$44 (US$30.8) more in income per week before tax. The move is expected to benefit 175,500 workers.
For workers entering the workforce, the starting-out and training minimum wages will rise in tandem to NZ$16 per hour (US$11.2), remaining at 80% of the adult minimum wage.
With borders still closed due to the pandemic, businesses have urged the government to postpone raising the minimum wage. The Ministry of Business, Innovation and Employment has advised delaying the increase until October and reducing it by 25 cents due to the economic uncertainty caused by COVID-19.
However, the government is sticking its election promise to increase the minimum wage. In addition, from April 1, a new top tax rate of 39% on individual income earned above NZ$180,000 (US$125,927) will apply.
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The government has estimated this revision would affect 2% of earners and would add an extra NZ$550 million (US$384.8 million) to tax revenues for the 2021 financial year, with the amount rising to NZ$634 million (US$443.5) by 2024, according to Stuff.
