2025–26 Minimum Wage Increase in Australia: What Employers and Employees Need to Know

The Fair Work Commission has announced a 3.5% increase to the national minimum wage and modern award wages, effective from 1 July 2025. This decision affects millions of workers and employers across Australia and marks a key change in workplace laws for the new financial year.

Whether you’re a business owner, manager, HR professional, or employee, this guide will help you understand what’s changing and what you need to do before July.

🔍 Summary of Key Changes / 2025-26 minimum wage

• 🗓 Effective date: First full pay period starting on or after 1 July 2025

• 💸 National Minimum Wage increases to:

  • $948 per week or

  • $24.95 per hour

• 🏗 Modern Award wages increase by 3.5%

• 💼 Superannuation Guarantee increases from 11.5% to 12%

• 🧾 New version of the Fair Work Information Statement available from 1 July 2025

  
  

🧑‍🏭 Who Does This Affect?

✅ National Minimum Wage

This rate applies to workers who aren’t covered by a modern award or enterprise agreement. From 1 July 2025, the base hourly rate becomes $24.95, up from $24.10.

✅ Modern Award Wages

Most employees in Australia are covered by a modern award—a legal document that outlines minimum pay rates and conditions in specific industries or job types (e.g., hospitality, retail, construction).

All minimum award rates will rise by 3.5%, with changes starting from the first full pay period after 1 July 2025.

Use the Pay and Conditions Tool to check which award applies to you or your staff.

💡 Why This Matters for Employers

Failing to update your payroll could result in serious penalties, employee disputes, or even legal action. Here’s what you should do now:

🧾 5 Things Employers Should Do Before July

1. Update payroll systems with the new rates (Xero, MYOB, QuickBooks, etc.)

2. Review employee awards and classifications to ensure correct pay levels

3. Adjust casual rates to include correct loading (typically 25%)

4. Increase superannuation contributions to 12% from 1 July 2025

5. Distribute the new Fair Work Information Statement to all new hires

   
   

💬 What Employees Need to Know

If you’re working in Australia, here’s how this change may affect you:

• Check your pay slip in July to ensure the increase is applied

• Understand whether you’re covered by a modern award or agreement

• Confirm whether your employer is contributing the correct super rate

• Ask your employer if you’re unsure about which rate applies to you

  
  

⚠️ Industry-Specific Note: Pharmacy Award

Employees under the Pharmacy Industry Award will experience two separate pay increases:

• One from the first full pay period after 30 June 2025

• Another from the first full pay period after 1 July 2025

This adjustment is part of the Fair Work Commission’s gender undervaluation review. If you're in this industry, make sure your payroll reflects both increases correctly.

📊 Superannuation: 12% Rate Applies From 1 July

In addition to wage changes, the superannuation guarantee rate increases to 12%. This means employers must contribute an extra 1% of each employee’s ordinary time earnings into their super fund.

Failing to meet this obligation could result in penalties from the ATO and possible back payments.

❗ What If You Don’t Comply?

Businesses that fail to implement the new minimum wage or super changes risk:

• Fines of up to $18,780 per breach (individual) or $93,900 (company)

• Back payments for underpaid staff

• Reputation damage and Fair Work investigations

Compliance is not optional—it’s the law.

📌 Staying Informed

To keep up with future workplace changes:

• Bookmark the Annual Wage Review page

• Subscribe to Fair Work’s email updates

• Follow Fair Work on Facebook, LinkedIn, Instagram, or X (Twitter)

  
  

📞 Need Help?

If you're unsure about your obligations or how these changes affect your business:

• Speak to your payroll provider or HR consultant

• Contact Fair Work for free advice

• Talk to a registered tax or business advisor to ensure full compliance

  
  

✅ Final Thoughts

The 2025–26 minimum wage and superannuation increases are important changes that affect every business—big or small. By preparing now, you can avoid compliance issues, support your staff, and build a stronger business foundation going into the new financial year.