In its recent annual wage review, the Fair Work Commission (FWC) has determined that modern award minimum wage rates will increase by 4.75%. Further, the new National Minimum Wage (NMW) is set to increase to $26.44 per hour (from $24.95 per hour) or $1,004.90 per week (from $948 per week) based on a full-time 38 hour week.
The FWC will also adjust the structure of several of the lowest paid modern award classifications, such that the lowest wage rate payable in the modern award system will now be $26.44 per hour or $1,004.90 per week in most cases.
The changes are set to operate from 1 July 2026.
The award rate increases will apply to all modern awards and cover all employees that a modern award applies to, including full-time, part-time and casual employees.
The increases will have a direct impact on approximately 21.1% of employees in Australia (nearly 2.8 million people) who are paid minimum wage rates under modern awards.
The accommodation and food services, retail trade, health care and social assistance, and administrative and support services industry sectors, which collectively employ around two-thirds of modern award-reliant employees in Australia, are also likely to be particularly affected by the increases.
What employers need to know
The new minimum rates will take effect for employees from the start of their first full pay period commencing on or after 1 July 2026.
Employers must ensure their employees are paid in accordance with the new applicable minimum rates of pay from this time. This will likely involve a pay raise for employees paid at current minimum award rates or the NMW (as applicable).
For award-covered employees who are paid “above-award” salaries, employers should ensure these salaries are sufficient to cover the employees’ minimum award entitlements, inclusive of the relevant minimum rate increases.
If you have any questions about how these minimum rate increases may affect you or your business, please contact HLS Legal on (08) 9322 5202.
This article is intended to be informative only and does not constitute legal advice. If you are concerned about your individual circumstances, please contact a lawyer.
