Living wage VS Minimum wage NZ: What’s the difference?

The living wage and the minimum wage aren’t the same - but what’s the difference? We’ve taken a closer look and rounded up everything you need to know about the two wages. 

This is the minimum hourly rate that employers can legally pay most adult employees in New Zealand. If you’re over 16 years old, in most cases your employer must pay you at least this amount. 

That said, there are a few minimum wages for different situations, such as:

• The starting-out wage: for employees aged 16-17 who’ve worked for less than six months, employees aged 17-18 who’ve been on a benefit and worked less than six months, and employees aged 16-19 completing industry training. $18.52 per hour. 

• The training minimum wage: for employees aged 20 or over who are completing recognised industry training involving at least 60 credits in order to become qualified. $18.52 per hour. 

• Under 16 wage: there is no minimum wage for children under 16. 

The key thing about the minimum wage is that it’s not optional. If there’s not an exemption employees must pay at least the minimum wage by law, or they risk penalties. The minimum wage is set by the Government and increases regularly. 

The living wage is an hourly pay rate set by Living Wage Aotearoa New Zealand that is  separate from the minimum wage and increases every year to keep up with inflation. It is the amount a worker must earn per hour to live with dignity and participate as an active member of society.

When calculating the amount of the wage, Living Wage Aotearoa New Zealand accounts for basic expenses but leaves room for rest, activities, savings and security. It’s about thriving, not just surviving. 

The key difference between the living wage and the minimum wage is that the living wage is completely optional. Employers do not have to pay the living wage by law.