On 2 June 2026, the Fair Work Commission announced a 4.75% increase to the decision the National Minimum Wage and Modern Award wages, effective from 1 July 2026. This change applies to all employees covered by Modern Awards and the National Minimum Wage.
The decision has been made against a backdrop where many award‑reliant employees are still experiencing lower real wages compared to pre‑inflation levels in 2021. Rising living costs, particularly for essential goods and services, have continued to outpace wage growth, placing increased pressure on lower‑paid workers.
While the 2025 increase helped reduce this gap at the time, higher inflation since then has widened it again. In light of ongoing economic uncertainty, the latest increase does not fully close the gap but is intended to ensure that award‑reliant employees are, at a minimum, not worse off in real terms than they were as at 1 July 2025.
What Employers need to Know
Not implementing updated wage rates can expose businesses to underpayment risks and compliance issues. To support compliance ahead of the new financial year, key actions include:
Steps to Take:
- Confirm your employees are correctly classified under the applicable Modern Awards.
- Update pay rates and allowances in payroll systems.
- Communicate any pay changes clearly to employees.
- Review annualised salary arrangements to ensure they remain compliant with the Better Off Overall Test (BOOT).
This increase will apply from the first full pay period starting on or after 1 July 2026. This means if your weekly pay period starts on Wednesday, the new rates will need to apply from Wednesday 1 July 2026.
For further information, please contact Perks People Solutions