February 2026 Newsletter (EMP updates + Mandela Effect)
- Chung Associates
- Feb 11
- 4 min read
With 1 April 2026 approaching, there are several important payroll changes on the horizon.
In this newsletter, we outline what’s changing, provide an update on upcoming employment law changes, and share a short leadership reflection we hope you’ll enjoy.
In this issue, we explore:
IN THE NEWS
Payroll Updates
What is changing from 1 April 2026
There are several payroll-related changes taking effect on 1 April 2026. While most payroll systems will handle these updates automatically, we recommend reviewing your first April pay run to ensure everything has been applied correctly.
Key Changes
Minimum wage
• Adult minimum wage increases to $23.95 per hour
• Starting-out and training wage increases to $19.16 per hour (80% of adult rate)
ACC earners’ levy
• Levy rate increases from 1.67% to 1.75%
No change
• Student loan repayment thresholds remain unchanged
• ESCT brackets and rates remain unchanged
What employers need to do
• Review your employees pay rates ahead of time to avoid last-minute adjustments.
• Ensure your staff are aware that the increase in ACC levies will result in a small reduction in their net pay.
• If your staff salaries are set up as automatic payments through internet banking, make sure to check the net amounts have been updated.
Kiwisaver Changes
Increase to do Contribution Rate
There are also KiwiSaver changes that take effect from 1 April 2026 that you need to be aware of:
• The default minimum KiwiSaver contribution rate for both employees and employers increases from 3% to 3.5% of gross pay
• Employees may still elect higher contribution rates of 4%, 6%, 8% or 10%
• Employees can apply to temporarily reduce their contribution rate back to 3% for a period of 3–12 months. This must be applied for directly with IRD and will only take effect once approved
• Employees aged 16–17 who are enrolled in KiwiSaver will now be eligible for compulsory employer contributions
What employers should do
• Communicate these changes to staff, including the option to apply for a temporary rate reduction via myIR.
• Check KiwiSaver settings for any employees aged 16-17.
• Review and update payroll settings before 1 April 2026.
Payroll providers are currently implementing these updates. For example, we understand that Xero Payroll will be releasing a tool in March to assist with updating employees to the new 3.5% rate.
With these added employment costs, it’s worth reviewing your pricing to ensure these increases are being accounted for. Doing so helps prevent rising staff costs from being absorbed into your margins and supports the ongoing sustainability of your business.
Employment Law Changes
What to expect in 2026 and beyond
Over the past year, the Government announced a number of proposed changes to employment law. Many of these are still being developed, with draft legislation expected to go through Parliament over the coming months, ahead of the November election.
Proposed employment law changes
• Clarifying the difference between employees and contractors
• Introducing a salary threshold for unjustified dismissal claims
• Streamlining the personal grievance process
• Removing the 30-day rule for collective agreements
Holidays Act changes
The Government has also signalled plans to replace the Holidays Act 2003 with a new Employment Leave Act, following ongoing complexity and compliance issues.
Proposed ideas include:
• Leave accruing based on hours worked, rather than weeks
• More flexibility around part-day leave
• Simplified sick leave calculations
Importantly, any changes to leave calculations are not expected to take effect until at least 2027, meaning businesses will continue operating under the current Holidays Act rules for the foreseeable future.
What employers should do
• Keep employment agreements and policies up to date
• Ensure ongoing compliance with current employment law
• Staff informed as draft legislation is released
We will continue to monitor developments and provide updates as things progress. If you would like to read more about these changes, additional information can be found here.
Food for Thought
Lessons from Nelson Mandela
We like to occasionally step back and reflect on leadership principles that are just as relevant in business as they are in life.
The team have been reading the well-known Time magazine article on Nelson Mandela’s leadership, which highlights eight enduring lessons that continue to resonate across organisations of all sizes.
Key Lessons from Nelson Mandela
1. Courage isn’t the absence of fear — it’s moving others beyond it
2. Lead from the front — but don’t leave your base behind
3. Lead from the back — let others feel they are in front
4. Understand your opponents — their motivations, culture and strengths
5. Keep friends close — and rivals even closer
6. Project the right image through presence and action
7. See complexity — avoid black-and-white thinking
8. Know when to step down — wise leaders recognise when to pass the baton
These principles remind us that effective leadership balances confidence with humility, vision with empathy, and strength with the ability to unite people toward a common goal.
Here’s a link to the full article if you’re interesting in reading more: Mandela-his-8-lessons-of-leadership..
If you would like assistance reviewing your payroll settings, pricing structure, preparing for upcoming employment law changes, or simply want to talk through how these updates affect your business, please don’t hesitate to get in touch.
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