April: the month a New Zealand business's costs reset

Across the Tasman, businesses brace for 1 July. In New Zealand the date to watch is 1 April: the day the tax year turns over and, most years, the day employment costs step up. It’s easy to treat it as just another month. The owners who protect their margins treat it as a deadline, with the work done in February and March so the new costs and the new prices arrive together.

What actually changes on 1 April?

The list varies a little each year, but these are the usual movers:

Change	What happened in 2026	What it touches
New tax year	2027 income year began 1 April 2026	Provisional tax schedule, balance date tasks, new GST and payroll periods
Minimum wage	Adult $23.50 → $23.95; starting-out and training $18.80 → $19.16	Wages, holiday pay, relativities, prices
KiwiSaver default rate	3% → 3.5% for employees and employers	Employer contributions, ESCT, payroll settings
KiwiSaver for 16 and 17-year-olds	Employer contributions now apply if other requirements met	Payroll for younger staff
ACC instalment plans	Interest applies to all instalment plans from 1 April 2026	How you choose to pay your levy invoice

Looking ahead, the KiwiSaver default rate is scheduled to rise again to 4% on 1 April 2028, and the minimum wage is reviewed every year. The specific numbers will change; the timing almost certainly won’t.

Why does April matter so much for margins?

Because most of a service business’s costs are people, and most of the people changes happen on one day. If prices don’t move at the same time, the business absorbs the increase until they do, and many businesses take months to get around to it.

Illustrative example. A Hawke’s Bay packhouse and orchard services business has a payroll of $1.4 million a year, much of it near the minimum wage. The April 2026 changes, plus matching lifts for team leaders to keep relativities, add about 2.5% to labour costs including KiwiSaver and holiday pay: roughly $35,000 a year, or $2,900 a month.

If it reprices on 1 April, the margin holds. If its new rates only flow through grower contracts from July, it absorbs about $8,700 over three months. If it waits until the next season, it absorbs the full $35,000. That’s often the difference between a good year and an ordinary one.

What’s the February-to-May checklist?

February: work out the new costs.

• Note the announced minimum wage rates (usually announced in the summer before April).
• List every employee affected directly, and every employee whose rate you’ll lift to keep relativities.
• Recalculate KiwiSaver employer contributions at the new default rate, remembering anyone on a temporary rate reduction.
• Estimate the knock-on to holiday pay and ACC. Our true cost of an employee shows the full stack.
• Ask key suppliers whether price changes are coming.

Late February to early March: reprice.

• Rebuild charge-out rates and product costings with the new figures. See charge-out rate.
• Set new prices to hold your gross margin percentage, not just your dollar profit. See repricing after the minimum wage rise.
• Test the rise in the price-rise calculator: how many sales could you lose and still be ahead?
• Give regular customers notice, typically 30 days, and check contract terms.

March: tax year housekeeping.

• Review your provisional tax option with your accountant. If you want the ratio option for the coming year, it must be elected before the year begins. See the four provisional tax options.
• Plan the balance date stocktake and debtor review.
• Check your GST filing frequency still suits the business.

1 April: switch over.

• Update payroll rates and KiwiSaver settings.
• Publish new price lists, menus and quote templates.
• Check every employee’s effective hourly rate is at or above the new minimum, including salaried staff whose hours may have crept up.

April and May: fund the transition.

• April’s payroll at new rates is due to Inland Revenue on 20 May.
• 7 May brings GST for the period ending March and the third standard provisional tax instalment.
• If your agent has an extension, last year’s terminal tax was due on 7 April.

Why are April and May so heavy for cash?

Put the dates together and the picture is clear. For a two-monthly GST filer on the standard option with a tax agent:

Date	Payment
7 April	Terminal tax for the year before last (with agent’s extension)
20 April	March PAYE and employer deductions
7 May	GST for period ending March, and provisional tax instalment 3
20 May	April PAYE, at new wage and KiwiSaver rates

Five weeks, potentially three tax payments and two payroll deduction payments, at the same moment costs have stepped up and before new prices have fully flowed through. Our business money calendar shows how this fits into the rest of the year.

How do you smooth April and May?

• Set aside weekly all year, so the tax account already holds most of what’s due. The GST & provisional tax set-aside planner works out the amount.
• Raise prices on time, so the extra cost doesn’t come out of cash for months.
• Pay ACC in full if you can, now that instalment plans carry interest from 1 April 2026; if you can’t, set up the plan before the due date. See ACC levies.
• Check whether estimation suits you if last year was unusually strong and this year looks flatter.
• Talk to Inland Revenue early if you expect to be short on any tax date.

What about businesses with many younger staff?

From 1 April 2026, 16 and 17-year-old KiwiSaver members qualify for employer contributions if they meet the other requirements. For cafés, retailers, supermarkets, cinemas and seasonal horticulture, that’s a new cost line. Check which younger staff are members, update payroll, and include it in your April costings. Our page on KiwiSaver employer contributions covers the details.

What about suppliers and contracts that change in April?

Your own costs aren’t the only ones resetting. Cleaning contractors, security firms, labour hire agencies, couriers and many service suppliers face the same wage and KiwiSaver changes, and many build an April review into their contracts. Ask your main suppliers in February whether increases are coming and how large, so your repricing reflects them. Check your own customer contracts too: a contract with an annual review clause tied to 1 April is an opportunity to recover your costs on time, while one with fixed pricing for two years needs managing differently. Rent reviews on commercial leases also often fall around the start of the year, so check yours.

Finally, look at your insurance renewals and software subscriptions. They don’t all move in April, but February is a good time to list every regular cost with its renewal date, so the year’s increases arrive as expected lines in your budget rather than as surprises on your card statement.

How should you plan for April 2028?

The next scheduled KiwiSaver step, from 3.5% to 4%, takes effect on 1 April 2028. If you sign multi-year contracts, long fixed-price jobs or leases with fit-out obligations between now and then, price them with the 2028 step included. It’s a small change per employee and a meaningful one across a team over a contract’s life.

When April’s costs land before April’s prices

Even with good planning, there’s often a lag of a month or two between costs rising and new revenue coming through. For larger employers, that lag can be tens of thousands of dollars. A short-term working capital facility can carry it so tax and payroll stay on time; you can find out what’s possible in about a minute, with no credit check.

Start the new year with the funding sorted

April is when many owners also plan the year’s growth: a new hire for spring, equipment, a second van, a bigger premises. If your April review shows the business is ready for a step like that, talk to us. We look at unsecured options for trading businesses, typically $5,000 to $500,000, and loans secured on residential or commercial property from $20,000 to $5,000,000. Enquiring won’t affect your credit file, your details aren’t fired off to other lenders, and a real person on our New Zealand team reads them. Answer the form accurately and our first call can be specific about what’s realistic. Start your enquiry.