The living wage is being increased to $26 per hour from 1 September.

The Living Wage Movement said the wage has undergone a full recalculation, resulting in thousands of workers receiving a pay increase.

It is an increase of $2.35 or 9.9 percent on the 2022/23 rate.

Employers who take part in the Living Wage Movement agree to pay their employees the set amount per hour.

According to their website, it is set apart from the minimum wage, and worker and whānau focused to ensure workers can live with dignity and participate in society.

A full recalculation of the living wage happens every five years.

In other years, the living wage is linked to movement in New Zealand's average hourly wages.

Chairperson of the Living Wage Movement Rev Stephen King said "the full recalculation ensures the living wage will continue to address in-work poverty, and offer working people greater security and wellbeing."

He said "with rising costs and pressures on low waged workers, we are seeing increased hardship in the community".

King said the recalculation quantified how much costs had gone up.

Rose Kavapalu, a cleaner who is paid the living wage, said the increase of $2.35 an hour would make a huge impact in covering costs such as food and petrol.

"Since petrol prices have gone up, we've cut down on visits to extended family.

"Now, I'll be able to take the grandkids to visit their cousins. We would feel like a family again."

Kavapalu would like to see more employers pay the living wage.

She said with many employers short staffed, acknowledging the value of their employees could make a difference to retention.

"The living wage might feel like five cents to some people, but to me and my family, it means finally living a life."

Ria Lingad, owner of Your Local Coffee Roasters in Pukekohe, is an accredited living wage employer.

She said retention of staff was a big focus for her business.

Lingad said they had already started incrementally increasing staff wages ahead of the September deadline.

She said it wasn't just the commitment to the living wage that enticed employees, but also the company's culture.