2026/27 Payroll Changes: What It Means for Your Business

As businesses begin planning for the 2026/27 financial year, it is important to factor in confirmed payroll-related changes taking effect from 1 April 2026. While these updates may appear modest, they will have a direct impact on employment costs and should be considered early as part of budgeting and workforce planning.

From 1 April 2026, the adult minimum wage will increase to $23.95 per hour. Even small movements at the lower end of the pay scale can have wider implications across a business. Increases to minimum wage often flow through to overtime rates, penal rates, allowances, and other pay structures. They can also create pressure on pay relativities, particularly where multiple roles sit close together within the same band.

For employers with staff currently on, or slightly above, minimum wage, this is a good time to review overall remuneration. Adjustments may be needed to maintain internal equity and ensure fairness across roles. It is also important to consider salaried employees, particularly where annual salaries may sit close to minimum wage thresholds when converted to hourly rates.

In addition, the Living Wage is typically updated in early April. While not mandatory, it can influence employee expectations and may be relevant when considering broader remuneration strategies.

From a planning perspective, these changes should be built into financial forecasts for the year ahead. Payroll cost increases may also affect pricing, contracts, and service rates, particularly where margins are tight or costs are passed through to clients.

Although these changes are incremental, their combined impact can be significant if not addressed early. Taking the time now to review pay structures, assess cost implications, and align your remuneration approach will help ensure a smoother transition into the new financial year.

If you would like to discuss what this means for your business, get in touch with us.