From 1 July 2026, Australia’s national minimum wage will increase by almost 6%, with all modern award minimum wage rates increasing by 4.75%, following the Fair Work Commission’s (FWC) Annual Wage Review decision.
These increases represent a meaningful adjustment aimed at addressing ongoing cost of living pressures, while also reflecting broader economic uncertainty. Below, we outline what these changes mean for your business and how you can prepare.
What is changing?
The FWC has determined that the national minimum wage will increase by almost 6%, applying to employees not covered by a modern award or enterprise agreement.
In addition, minimum wage rates under modern awards will increase by 4.75%. Given the significant portion of the workforce that remains award‑reliant, these changes will have a broad impact across many industries and businesses.
Employers should ensure they update payroll systems and employment arrangements to reflect the new minimum rates from 1 July 2026.
Economic context
In arriving at its decision, the FWC balanced a number of competing considerations.
A key driver of the increase was the continued pressure on workers arising from inflation and cost of living increases, with the Commission seeking to ensure that minimum wage workers are not left behind.
At the same time, the FWC acknowledged ongoing economic uncertainty and the need to avoid placing undue strain on businesses, particularly small and medium enterprises already managing rising operational costs.
The resulting increases reflect an attempt to strike a balance between supporting employees’ real wages and maintaining business sustainability.
What this means for employers
With both minimum wage and award rates increasing, employers should take steps now to ensure compliance and manage cost impacts. In particular, you should:
- Review all applicable modern awards and update pay rates accordingly;
- Ensure non‑award employees remain above the new national minimum wage;
- Review employment contracts, particularly where remuneration is intended to absorb award entitlements;
- Check enterprise agreements to ensure they continue to meet minimum statutory requirements; and
- Update payroll systems ahead of 1 July 2026 to avoid underpayment risks.
Key takeaway
While the increases are significant, early preparation will assist in managing the transition and reducing compliance risk.
If you would like assistance reviewing your obligations or implementing the required changes, please contact our Employment Team on (02) 4927 2900.