Minimum Wage – Issues for farming businesses in New Zealand

Written by
MBS Advisors
Published on
April 5, 2022

All New Zealand employers should understand their obligations under the Minimum Wage Act. Farming businesses can face questions that may not arise for other employers.

From 1 April 2022 the minimum wage rates increase. The rates for adult workers are:

  • Hourly: $21.20 ($16.96 for Starting-out workers/Trainees)
  • Daily (based on an 8-hour day): $169.60 ($135.68 for Starting-out workers/Trainees)
  • Weekly (based on a 40-hour week): $848 ($678.40 for Starting-out workers/Trainees)
  • Fortnightly (based on an 80-hour fortnight): $1,696 ($1,356.80 for Starting-out workers/Trainees)

It is relatively straightforward to ensure your business is paying your workers at least minimum wage when your employees’ hours of work are regular and fit neatly within the ranges of an 8-hour day, a 40-hour week or an 80-hour fortnight.

It can be more complicated if your business is seasonal, typical for many farming businesses, with peak seasons requiring longer hours than usual, or irregular hours. It is important to have systems to ensure your business is fully compliant with minimum wage requirements. Even when you pay above minimum wage, you need to check.

In the old days some employers would average out wages over busy and quiet times. Under current law, the maximum period wages can be averaged over is a fortnight (and there are conditions on that).

If you provide accommodation or benefits such as food or firewood for your employees, you can agree with them to deduct the cost of accommodation from their wages. The Minimum Wage Act allows you to count some of these benefits as ‘wages’, but not all.

For more detail, download the guide.

Our Payroll Manager Jan is always happy to help if you have any questions, contact us today

Share this post
Blog

Explore our latest articles

Enjoy our latest news and blog posts

5 min read

Accounting Basics: Balance Sheet Reports

Understanding your finances is a vital part of running your business. But getting down into the nitty gritty of the entity's accounts isn’t every entrepreneur’s top skill. If you are new to accounting, or simply want to expand your knowledge, we can help explain the foundational reports. The balance sheet...
5 min read

Self-Employed? Get the Full KiwiSaver Contribution

If you’re self-employed, you’re in charge of your KiwiSaver contributions. KiwiSaver is not automatically deducted from your earnings if you are self-employed. You will need to decide how much you want to commit to your retirement fund, if anything, and make these contributions manually each year. The contribution payments can...
5 min read

Provisional Tax: What You Need To Know

What is Provisional Tax? Provisional tax is income tax paid in advance of the end of the financial year, or paid as you go. And, it’s important to get it right. We’ll help work out what’s best for you and your business. If you are an employee, your employer sorts...

Stay updated and sign up to our newsletter

By clicking Sign Up you're confirming that you agree with our Terms and Conditions.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.