Living wage will increase to $22.75 - $2.75 higher than the new minimum wage which came into effect on Thursday.
It's an increase of 65 cents per hour from the 2020 Living Wage and will be in place from September 1 2021.
Gina Lockyer, Chair of Living Wage Aotearoa, says it's reason to celebrate.
"We are celebrating the work done by researchers to calculate the rate, the work done by employers to lift the wages of their workers, and the work of our Living Wage Movement in making it all happen."
More than 240 employers across the country pay livable wages - meaning thousands of workers will reap the benefit of the increase.
Blair Vernon, Chief Executive of AMP Wealth Management, the first KiwiSaver provider to become an accredited Living Wage employer says financial wellbeing is absolutely crucial - and living wage helps New Zealanders achieve it.
"We know many New Zealanders either don’t have enough money to get by, only just have enough, or have sought help in the form of food, clothes, or money from an organisation...it’s time for more employers to take responsibility for improving outcomes for their people and their families by paying a living wage."
The Living Wage is assessed annually by the New Zealand Family Centre Social Policy Research Unit.
It takes into account basic expenses like food costs, transportation, housing and childcare and is updated in line with wage increases.