Living Wage Aotearoa NZ has announced the 2025/26 Living Wage will rise to $28.95 per hour from 1 September, up $1.15 from the current rate of $27.80. The new figure is a 4.2% increase in New Zealand’s average ordinary time hourly wage, according to the latest data from Stats NZ’s Quarterly Employment Survey.
The Living Wage is independently calculated each year by the Family Centre Social Policy Research Unit. It represents “the income necessary to provide workers and their families with the basic necessities of life, enabling workers to live with dignity and participate as active citizens in society.” The updated rate is about 68% of the national average hourly earnings.
At $28.95 per hour, the Living Wage stands $5.45 above the minimum wage, which rose to $23.50 on 1 April. While both rates increased this year, the difference between them has widened, highlighting the gap between legally mandated income and what some advocacy groups consider necessary for a decent life.
Gina Lockyer, Executive Director of Living Wage Aotearoa NZ, said the rate makes a tangible difference for low-income families. “For many workers and their families, it’s the difference between being able to make ends meet or falling behind. It’s being able to afford school uniforms and medical expenses. It means not having to decide between doing a grocery shop or paying the power bill,” she said.
The increase applies to all employees and regular contractors working for any of the 342 accredited Living Wage Employers across New Zealand. These organisations span industries such as hospitality, finance, and retail, and are required to meet strict criteria, including applying the Living Wage to procurement contracts. This ensures that roles like cleaners and security guards employed through contractors also receive the Living Wage.
However, the boost comes at a time of growing uncertainty. The Government has proposed removing the requirement for its contractors to pay the Living Wage, a policy that currently covers outsourced workers such as cleaners, catering staff, and security personnel. Finance Minister Nicola Willis said the proposed change is aimed at reducing red tape and supporting local businesses competing for government work.
“We want to properly look at the impact New Zealand businesses have when they get a Government contract,” said Willis. “And that’s in terms of the jobs they create, the incomes they create, the social impact for the communities.”
The government has indicated that any changes would apply only to new contracts, not existing ones.
Living Wage advocates have expressed deep concern over the proposal. “If the changes go ahead, these workers will miss out on the new Living Wage rate, and any future increases,” Lockyer warned. “The Government has two choices – a Living Wage that improves community outcomes and service delivery, or hardship for the people who keep their agencies safe, healthy, and secure.”
Public opinion appears to support maintaining Living Wage standards in government procurement. A recent poll of over 1000 voters found that 62% opposed the removal of Living Wage requirements, while only 23% were in favour. The findings suggest strong public sentiment around wage fairness, especially in publicly funded employment.
As the September deadline approaches, businesses will begin adjusting pay structures to comply with the new rate. But whether the Government follows suit remains uncertain.