Papua New Guinea (PNG) is rich in natural resources, which shapes the country’s job market. Most jobs follow formal labor laws in the Employment Act 1978 and the Industrial Relations Act 1962.

In 2025, the government conducted a review of the national minimum wage for the first time in over ten years. This review was driven by rising inflation and increasing living costs, which have made it harder for many workers to afford basic necessities. Businesses hiring in PNG should monitor these developments closely as wage changes take effect from 2026 onward.

Here’s What to Know About the Minimum Wage in Papua New Guinea

As of 2026, the minimum wage is K5.00 (Papua New Guinea Kina) per hour. This rate was set to take effect on January 1, 2026, following a comprehensive review and determination by the Minimum Wages Board. The hourly rate of K5.00 marks the first increase in nearly a decade after the previous rate of K3.50 per hour, which had remained unchanged since 2016.

PeriodAmount (K)
Weekly220.00
Monthly953.00

The Minimum Wages Board under the Department of Labour and Industrial Relations is responsible for setting and reviewing this rate. Future scheduled increases will see the minimum wage rise to K5.25 per hour in 2027 and K5.50 per hour in 2028 as part of a staged adjustment process.

How the Wage System Works

PNG uses a flat-rate wage system. The minimum wage is the same for every worker, no matter where they live, what job they do, or how skilled they are. Before 1992, PNG had different wage rates for rural and urban workers.

But today, all workers must get at least K5.00 per hour, following the official increase that took effect on January 1, 2026. However, many industries, especially mining, pay much more. So, this rate is the legal minimum, not the average salary.

The Minimum Wages Board has completed its recent review to address how inflation reduced the value of wages. As a result, the rate is legally scheduled to increase again to K5.25 in 2027 and K5.50 in 2028.

Employee Benefits in Papua New Guinea

Working Hours and Overtime

The standard workweek is 44 hours: 8 hours a day from Monday to Friday, and 4 hours on Saturday.

Overtime pay rates are:

  •  1.5× the normal rate for work beyond regular hours (Mon–Sat)
  •  2× the normal rate on Sundays
  •  Normal hourly pay + public holiday pay on public holidays

Leave Entitlements

  • Annual Leave: 14 paid days after 1 year of continuous work
  • Sick Leave: Up to 6 paid days per year (with a doctor’s note)
  • Public Holidays: 9 paid national holidays
  • Maternity Leave: In the private sector, maternity leave is unpaid

Termination of Employment

Termination requires a valid reason and adherence to statutory notice periods based on the employee’s length of service.

Length of Continuous ServiceMinimum Notice Period
Less than 1 year1 week
1 to 5 years2 weeks
5 years or more4 weeks

Dismissal without notice is permitted only for serious misconduct, such as willful disobedience or fraud.

Payroll Contributions

Superannuation (NASFUND)

Participation in a national retirement fund is compulsory for most private-sector employees. Both parties contribute a percentage of the employee’s gross basic salary to the fund. 

Contribution TypeRate (%)
Employer Contribution8.4
Employee Contribution6.0

Salary and Wages Tax (SWT)

Employers must withhold income tax from employee earnings and remit it to the Internal Revenue Commission (IRC). PNG uses a progressive tax system, but there’s a tax-free threshold of  K 20,000 per year for low-income earners.

Many employers offer extra benefits to attract skilled workers and make up for Papua New Guinea’s high cost of living and limited public services, including:

  • Housing allowances
  • Transport or fuel costs
  • Private health insurance
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Are There Industry-Specific Wage Rules?

No. PNG does not currently have different legal wage rates for specific industries. While some business groups have asked for industry-specific or location-based wages, the law still requires a single national minimum wage.

Employer Compliance in Papua New Guinea

Paying Wages

Employers must pay at least the minimum wage. It’s a good idea to provide payslips, even if the law doesn’t require them.

Probation Periods

PNG’s private sector labor law does not regulate probationary periods. Including a probation clause in a contract is a legal risk, as it may not be enforceable for termination. Employers should seek expert advice on performance management for new hires.

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Hiring Foreign Workers

Foreign workers must have both:

  • A Work Permit from the Department of Labour and Industrial Relations
  • An Employment Visa from the Immigration & Citizenship Authority

The process is initiated by the employer. Successful hiring requires proof that the job cannot be filled by a local worker, and can take 6–10 weeks.

Remote People Helps You Hire in Papua New Guinea

Papua New Guinea’s labor system has strict wage laws, outdated pay rates, and weak enforcement. At the same time, the government is reviewing these rules, and there’s growing public pressure to improve them.

If your company wants to hire, working with Remote People’s Employer of Record (EOR) in Papua New Guinea makes the process easier and safer. Here’s how we help:

  • We ensure you follow wage laws, paying employees at least the legal minimum, and quickly update pay when the government changes the rate.
  • Using our automated global payroll calculator, we handle all payroll, including tax deductions (PAYE), superannuation (NASFUND), paid leave, overtime, and labor filings. Everything is done according to PNG law.
  • We become your legal employer, minimizing your business risks and applying for the necessary work permits and employment visas through the right government offices.
  • We draft and manage proper employment contracts and follow the correct steps for entitlements and performance management.
  • As PNG updates its wage laws, Remote People helps you adjust quickly while staying within the law. We also reduce the time and stress of managing local labor rules yourself

Save valuable time and simply focus on growing your business. Outsource to Remote People today.