The headline from today’s Fair Work Commission’s (Commission) Expert Panel annual wage review decision is a 4.75% increase to all modern award minimum rates.
This takes effect from the first full pay period following 1 July 2026.
Significantly though, an even larger increase has been awarded to employees on the National Minimum Wage (NMW) and on the lowest award rates. Those rates will increase by approximately 6% from $24.95 per hour (or $948 per week) to $26.44 per hour (or $1,004.90 per week), plus 25% for casual employees.
This larger increase for the lowest paid is a consequence of the Commission deciding to benchmark the NMW rate against a higher award classification level and also to increase the rates of pay for the lowest classifications in many Awards.
For many years, up until 2025, the NMW was benchmarked against the lowest classification in the Manufacturing and Associated Industries and Occupations Award 2010 (Manufacturing Award) i.e. C14 (currently $24.28). From 1 January last year, the Commission decided to benchmark the NMW against the higher, C13 rate (currently $24.95). In today’s decision it has announced that in 3 stages (commencing 1 July 2026), the NMW will henceforth be benchmarked against the even higher, C12 rate (currently $25.85). Accordingly, we can expect the NMW and minimum award rates for the lowest paid to rise significantly more steeply than other Award covered workers over the next 3 years.
You can review the Panel’s full decision here: Annual Wage Review 2026 | Fair Work Commission
What’s next?
These changes take effect from the first full pay period following 1 July 2026 so payroll systems should be adjusted accordingly.
For employers, this is a good time to review:
- existing remuneration structures. Particularly for employees paid “all-inclusive” annual salaries as the amount paid each pay period must be sufficient to meet all award entitlements owing in that same pay period. This is especially important given the significant increases to minimum award rates in recent years.
- existing employment contracts. Particularly for employees paid amounts above award minimums to ensure your contracts contain fulsome set-off rights. You can read about the Coles & Woolworths underpayment decision here: Loaded Rates and Annual Salaries for Award Employees – Now in Dangerous Waters – HMB Employment Lawyers
As always, if you have any questions – please don’t hesitate to reach out to one of our team on (03) 9448 9600 or admin@hmblaw.com.au
