Today, the Fair Work Commission’s Minimum Wage Panel (FWC) handed down its decision on the annual wage review. Modern award minimum rates will increase by 4.75 per cent, effective from the first full pay period commencing on or after 1 July 2026. The National Minimum Wage will rise to $26.44 per hour from the same date.

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 2026.

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

the cost of living and real wage gap that has emerged since the post-pandemic inflation spike of 2021, with disproportionate impact on the lowest paid;
the performance and competitiveness of the national economy;
oil supply disruptions and consequent inflationary pressures arising from the Middle East conflict that broke out on 28 February 2026, and the Reserve Bank’s resulting monetary policy tightening and its projected economic impact; and
the need to advance gender equality through increased workforce participation, social inclusion, and the ongoing targeted review of female-dominated award classifications.

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.