Award Wages Rise 4.75% from 1 July 2026 

On 2 June 2026, the Fair Work Commission (FWC) handed down its 2026 Annual Wage Review decision, lifting modern award minimum wages by 4.75%. If you employ staff covered by a modern award, this affects what you need to pay from the start of the new financial year — so it’s worth understanding now rather than scrambling in July.

The headline numbers

• A 4.75% increase applies to all modern award minimum wage rates.
• It takes effect from the first full pay period starting on or after 1 July 2026 — not necessarily 1 July itself. If your pay cycle starts mid-week, the new rates apply from the start of that pay period.
• The new wage floors are:
  • Ongoing employment: $1,004.90 per week, or $26.44 per hour. This also becomes the new National Minimum Wage — the first time it has sat above $1,000 per week.
  • Entry-level employment (first 6 months only): $978.10 per week, or $25.74 per hour.

The lowest classification is being phased out

As foreshadowed in last year’s review, the FWC is phasing out the C13 classification — the lowest wage rate that applies to ongoing employment in the award system. Removing it lifts the lowest ongoing rate to the figures above. A separate entry-level rate remains for employees in their first six months.

Who this affects

The increase reaches around one in five Australian employees — roughly 2.7 million people — who are paid at award minimums, along with their employers. These workers are concentrated in accommodation and food services, health care and social assistance, retail, and administrative and support services. The majority are women, most work part-time, and more than half are casuals. In short, if you have staff paid at or near award minimums, this almost certainly applies to your business.

Why the Commission landed on 4.75%

The FWC noted that 2025 brought solid economic growth, more jobs and hours worked, and healthy business profits, while wage growth stayed moderate. But inflation rose more than expected in the second half of the year — pushed along by global pressures including conflict in the Middle East — lifting living costs well above the Reserve Bank’s target band and widening the “real wage gap” for low-paid workers.

The Commission chose not to close that gap entirely, judging a larger increase unsustainable for business. Instead, it aimed to ensure award-reliant employees are not worse off in real terms than they were at 1 July 2025 — effectively holding their purchasing power steady rather than going backwards.

What you should do before 1 July

A short checklist to stay compliant and avoid underpayments:

• Confirm which awards and classifications cover your employees. If you’re unsure, this is the first thing to nail down.
• Update your payroll to the new rates from your first full pay period on or after 1 July 2026 — apply it from the correct pay period, not a blanket 1 July date.
• Review annualised or “all-inclusive” salaries. Make sure each still sits above the new award minimum once overtime, penalties and loadings are accounted for. Salaries that were comfortably above the line last year may not be this year.
• Check enterprise agreement rates. If any pay rates in an agreement are tied to the award or the National Minimum Wage, confirm whether they need to move too.
• Update contracts, budgets and cash-flow forecasts to reflect the higher wage cost.
• Don’t overlook on-costs. The increase also flows through to superannuation and anything else calculated on gross wages.