A report by an independent policy research centre concludes the living wage should be set at $18.40 an hour, almost $5 dollars more than the minimum wage.
The figure has been released by the Living Wage Campaign in its push to encourage employers of low paid workers to pay them more.
The report was done by Charles Waldegrave and Peter King at the Family Centre Social Policy Research Unit.
Unlike the minimum wage, at present set at $13.50 an hour, the Living Wage Campaign relies on employers voluntarily opting to pay their workers more.
Mr Waldegrave says the proposed living wage would allow a family of four - where one parent works full-time and the other half-time - to do more than just survive.
He says about one third of New Zealand workers earn less than $18.40 an hour, and for many it would not take much to move them up.
Tamara Baddeley, who provides home care for the elderly, is paid $14.80 an hour and says getting the living wage would make a big difference.
But she says given the Government will not increase spending on aged care, she does not expect to receive the living wage.
Mr Waldegrave says overseas experience proves businesses also benefit from paying a living wage because it lowers staff turnover and increases productivity.
The Government will in the next month consider lifting the minimum wage.