As we approach the start of the new tax year, a number of payroll-related changes will take effect from 1 April 2026. These include updates to the minimum wage, KiwiSaver contribution rates, and the ACC Earners’ Levy, along with a few other adjustments employers should be aware of.
To help make the transition easier, Crystal Payroll will be implementing several automatic updates within the system where possible. In the sections below, we’ve outlined the key changes, what they mean for employers and employees, and how they will be reflected in Crystal Payroll.
As always, our goal is to keep payroll clear and help ensure your business stays compliant with New Zealand legislation.
Changes from 1 April 2026
Minimum wage increases
Starting April 1st, the Adult Minimum Wage will increase from $23.50 to $23.95, and the Training Rate and Starting-out Rate will increase from $18.80 to $19.16.
To help support this change, we will automatically update the Adult Minimum Wage for employees currently paid between $23.50 and $23.94, effective from April 1st.
If you want to opt out and wish to manage this yourself please email us at support@crystalpayroll.co.nz by end of Tuesday 24/03/2026
Note: The Training Rate and Starting-out Rate will still need to be updated manually, as these rates are not adjusted automatically by the system.
KiwiSaver Changes
The most significant change for the 2026 tax year is the update to the minimum KiwiSaver contribution rates for both employers and employees. The minimum employer and employee contribution will increase from 3% to 3.5%.
From 1 April 2026, we will update all employees currently set at 3% for both employee and employer contributions to the new 3.5% rate.
Note: Employees also have the option to apply for a temporary stay at the 3% rate. Applications for this option have been open since 1 February. Apply for this temporary delay with the IRD here: https://www.ird.govt.nz/kiwisaver-changes
If you have employees in this situation, you can either set them back to 3% after we update their contributions to 3.5%, or let us know if you would prefer to opt your account out of the update. Please note that the update can only be applied to all employees or none. It cannot be applied to selected employees, so opting out would apply to the entire account.
If you want to opt out and wish to manage this yourself please email us at support@crystalpayroll.co.nz by end of Tuesday 24/03/2026
Another minor change is that employees aged 16–17 who are enrolled in KiwiSaver will now also be eligible for compulsory employer contributions if they meet the usual eligibility criteria.
ACC Earners’ Levy
Attention salaried staff. From April 1st, the ACC Earners’ Levy rate will increase from 1.67% to 1.75%.
As this levy forms part of the PAYE calculation, employees who receive the same pay each period may notice a slight reduction in their take-home pay.
The ACC Earners’ Levy Threshold will also increase from $152,790 to $156,641, meaning the levy will no longer apply to earnings above this amount.
Student Loan Repayment Threshold – No Changes for 2026
The Student Loan Repayment Threshold will remain the same this year at $24,128 per year.
Here’s how it breaks down:
If you’re paid weekly, repayments begin at 12% of every dollar above $464.
If you’re paid fortnightly, repayments start at $929.
For those paid every 4 weeks, the threshold is $1,856.
And if you’re paid monthly, it’s $2,010.66.
Updating ESCT Rates in Crystal Payroll
With the start of the new tax year on 1 April, employers should remember to reset their ESCT (Employer Superannuation Contribution Tax) rates. ESCT rates are calculated based on each employee’s earnings from the previous tax year, so they may need to be updated annually to ensure the correct tax rate is applied to employer KiwiSaver contributions.
- First, complete your final pay period for the current Tax Year (prior to April 1st). Note that this should be the final payment date before April 1st, not the period date.
- Navigate to “Company Settings” > “Payroll Settings” > “Advanced Settings” > “KiwiSaver, Superannuation & SWSAS Settings”.
- Select the “ESCT Yearly Reset” option to apply the updates.
Aiming for Fairness & Simplicity: Our Statement on the Employment Leave Bill
As many of you know, the Holidays Act 2003 has been widely recognised as being due for an overhaul for quite some time. Because of this, the Government has introduced the Employment Leave Bill, which aims to simplify the way leave entitlements are calculated and administered. The goal of the Bill is to create a clearer and more practical framework for both employers and employees.
As a payroll provider, we understand the importance of modernising legislation so it better reflects the realities of today’s workplaces.
We provided feedback during the consultation phase, and following the recent announcement of the Employment Leave Bill, we felt it was important to share our perspective and contribute to the conversation around these proposed changes. Please see our official statement below.
“Crystal Payroll welcomes the renewed efforts to refresh and simplify the existing legislation, and the intent to make it easier for business owners and employees alike to understand their entitlements and obligations. However, we strongly believe fairness should not be sacrificed for simplicity, so we intend to continue providing feedback and make a submission during the Select Committee process in the hope of helping to refine the Employment Leave Bill and support a well-rounded successor to the existing Holidays Act.”
The Bill may still change as it moves through the parliamentary and Select Committee process. However, it is a good idea for employers to start learning about the proposed changes. As more details emerge, we will continue to monitor developments and keep our customers informed about any changes that may affect payroll processing in the future.
If you have any questions about these changes, our support team is happy to sort you out. Just flick us an email or give us a call.
