The FWC has decided: minimum wage will increase by 3.5%

Today, the Fair Work Commission’s Minimum Wage Panel (FWC) handed down its decision on the annual wage review. The decision provides an increase of 3.5 per cent to the National Minimum Wage, taking it to $24.94 per hour, effective from the first full pay period commencing on or after 1 July 2025.

This increase flows onto Modern Award minimum wages for all classification levels, with those increases also effective from the first full pay period commencing on or after 1 July 2025.

In reaching its decision, the FWC considered economic and social concerns including:

• the cost of living;
• the strong labour market and continuing employment growth;
• inflation and real wage growth;
• reductions in interest rates;
• upcoming changes to the Superannuation Guarantee contribution rate;
• the need to achieve gender equality; and
• the economic conditions, both currently and those projected for the 2025/26 financial year.

What are the next steps for businesses? 

To help employers prepare for the wage increase, we suggest undertaking the following steps:

• review minimum rates of pay, terms and conditions for award-covered employees and process increases from the first full pay period in July if necessary;
• review the salary of award-covered employees to ensure that the salary continues to result in the employee being better off as compared to what the employee would have received under the award;
• review the base rates of pay provided under any enterprise agreement to ensure that the base rate of pay is at least equivalent to the updated base rate of pay under the award; and
• engage and inform team members who will undoubtedly receive information from the media.

In the event your employees are covered by an enterprise agreement, it’s important to ensure that the base rates in those agreements remain at least equal to the new minimum modern award rates.

About our authors

Nick Tindley is the Head of Workplace Relations and Advisory at Citation HR and Law Partner at Citation Legal. Nick has over fifteen years’ experience in providing industrial relations and employment law advice, with expertise in the retail industry.

Grant Kapp (B.Comm Law, RQF Level 6 Honours Degree Law ) is a Senior Workplace Relations Consultant at Citation HR and assists various clients via the HR Advice Line.