What is a normal pay rise in New Zealand in 2026? The real numbers, and your rights

What Stats NZ's labour cost index says for 2026

The labour cost index (LCI) is the closest thing New Zealand has to an official "average pay rise". Every quarter, Stats NZ surveys employers about the pay rates for a fixed set of jobs and measures how they change. In the year ended June 2026, released on 5 August 2026:

The two headline numbers measure different things. Stats NZ says the main index tracks pay for a fixed quantity and quality of work, so it leaves out service increments, merit promotions and rises linked to an individual's performance. It answers the question "what does the same job pay now?" The unadjusted index keeps those increments and performance rises in, which is why it is higher: 3.1% is closer to what happened to people who stayed in a role and moved up its scale.

The trend is down. The main index rose 2.4% in the year to June 2025, and it has run at 2.0% or 2.1% for each of the four quarters since. Stats NZ's separate Quarterly Employment Survey, which averages what people earn rather than tracking set jobs, put average ordinary time hourly earnings at $44.62 in the June 2026 quarter, up 2.8%.

In the public sector, the gap between councils and central government is wide. For salary and ordinary time wage rates, local government rose 2.5% in the year to June 2026 and central government 1.7%. Our article on public sector bands and regrades covers how pay moves inside a band.

By type of work, the spread is narrow:

Who got a rise, and how big it was

An average of 2.0% hides two very different groups: pay rates that went up, and pay rates that did not move at all. Stats NZ's detailed tables split them. Of the salary and ordinary time wage rates it surveyed, 55% were higher in June 2026 than a year earlier, and 44% were unchanged. Almost none fell. A year before, 57% had risen.

Among the rates that did rise:

• The median rise was 3.0% and the mean 3.6%. A year earlier the median was 3.5%.
• By sector, the median rise was 3.0% in the private sector and 2.5% in the public sector.
• By size, 10% of all surveyed rates rose by 2% or less, 20% by more than 2% and up to 3%, 17% by more than 3% and up to 5%, and 9% by more than 5%.

Stats NZ also asks employers why each rate rose, and they can give more than one reason. The cost of living was a reason for 46% of the rises. Matching market rates, or keeping or attracting staff, was a reason for 29%, and for 57% of the rises bigger than 5%. Collective employment agreements were behind 24%.

Two cautions. These are shares of surveyed pay rates, not of people, and they are counted after Stats NZ strips out promotions, service increments and performance rises. So they understate how many individuals were paid more, and they say nothing about anyone who changed jobs. Read them as the picture for the same job, at the same employer, a year apart.

Put simply: in the year to June 2026, a rise of about 3% for the same job was typical among those who got one, a rise above 5% was uncommon and usually about the market, and close to half of pay rates did not move.

No legal right to a rise, with two exceptions

Employment New Zealand is plain about it: an employer has no legal obligation to give a pay rise, or to review pay at all, unless your employment agreement or a workplace policy says it will. If it does review your pay, it can decide not to increase it, as long as you are paid at least the minimum wage.

The exceptions are the ones in writing:

• Your agreement or a policy. If it promises an annual review, or a rise on a set date or scale, that is a term of your employment and your employer must follow it. A collective agreement that covers you may set rises too.
• The minimum wage. From 1 April 2026 the adult minimum wage is $23.95 an hour, and the starting-out and training rates are $19.16. Employment New Zealand says that when the minimum rises, employers must lift pay to at least the new rate from the day it takes effect.

You can always ask, and the asking has some protection. Employment New Zealand says an employer must consider and respond to a request for a pay rise in good faith. Since the law changed on 27 August 2025, you are also protected when you discuss or disclose your pay, or ask a colleague about theirs, which makes it easier to know where you stand.

Reading your rise against prices and the market

Three comparisons tell you what a rise is worth:

1. Prices. Stats NZ's consumers price index rose 4.1% in the year to June 2026, including 1.5% in the June quarter alone. With pay rates up 2.0%, the same job's pay bought about 2% less than a year earlier. Our article on whether your pay has kept up with inflation shows how to run that check over several years.
2. The same job elsewhere. The labour cost index's 2.0% is what pay for unchanged work did. A rise at or above it means your rate has at least kept pace with the market for your job.
3. Other people who got a rise. The 3.0% median among rates that rose is the fairer benchmark if your employer is giving rises this year.

A worked example, which is only arithmetic. On a $70,000 salary, a 2.0% rise takes you to $71,400. Keeping level with the 4.1% rise in prices would take $72,870, so the rise leaves you $1,470 a year short, and $71,400 is worth about $68,589 at June 2025 prices. A 3.0% rise, the median among those who got one, would take you to $72,100: above the market for the same job, still below prices.

No single figure tells you what your own rise should be. Your role may have grown, your pay may have started low, or your field may be short of people, and most of the biggest rises Stats NZ records were given to match the market or to keep or attract staff. Our article on whether you are being underpaid covers comparing your pay with the market for your role.

What to do with a below-average offer

If the number is lower than you expected, take a day before you reply. Then work through it calmly:

1. Ask what it is based on. A budget across the whole organisation, a scale, or a view of your performance call for different answers.
2. Bring your own numbers. What prices have done since your last rise, what the same job pays elsewhere, and what you have delivered this year.
3. Name a figure. A specific number, with the reasons, is easier to respond to than "a bit more".
4. Ask about what else can move. A review in six months, a title or scope that matches the work, training, or flexibility.
5. Get the outcome in writing, including any date you agreed to revisit it.

Our guide to asking for a pay rise covers the full case and the words to use, and our article on negotiating pay for an internal promotion covers the rise that comes with a bigger role. If a rise of the size you need is not coming, the market is the other test: an offer from another employer is strong evidence of what your work is worth now.

The figures in this article are from Stats NZ's June 2026 quarter releases. Stats NZ publishes the consumers price index for the September 2026 quarter on 22 October 2026 and the labour cost index on 4 November 2026, so check those releases for newer numbers before your review.

Your own history is the part no national figure can give you. Your Career keeps every change to your pay with its date, shows what your pay is worth after prices, and plans your pay review with reminders six and two weeks before, so you arrive with your numbers already worked out.

Walk into the review with your own numbers