Members of Parliament have been given a 2.49 per cent pay rise, meaning the Prime Minister receives an extra $11,170 a year and backbench MPs get a $3890 bump.
The Remuneration Authority has released its determination on MPs' salaries, the second since a change to peg MPs' salary increases to those in the wider public sector.
The increase takes Prime Minister John Key's salary to $459,739 while Labour leader Andrew Little and Cabinet Ministers will get $288,900 - up $7020.
Backbench MPs without extra responsibilities will get $160,024, up from $156,136.
The increase is backdated to July.
MPs also get tax-free allowances which increase by the rate of inflation (0.4 per cent) and range from $22,229 for the Prime Minister to $16,697 for other MPs.
In setting salary increases, the Remuneration Authority also calculates whether there have been changes to any personal benefit in other entitlements for MPs such as travel and accommodation. In the past year there were no changes.
In its explanatory note, the Remuneration Authority said the increase was based on the Quarterly Employment Survey.
Key moved to peg salary increases to those in the public service to try to dampen criticism of MPs for their pay increases.
In the past, the Remuneration Authority had to take other factors into consideration, such as the salaries of those in leadership positions in the private sector.
In the past, it had held back MPs salary increases at their urging - such as during the global financial crisis. However, those were followed by larger 'catch up' increases and increases to compensate for the loss of some international travel perks.
The Remuneration Authority is an independent body.