Australia’s minimum wage is increasing

The Fair Work Commission has handed down its 2026 Annual Wage Review decision, confirming an increase to modern award wages and the National Minimum Wage from 1 July 2026.

For the approximately 2.8 million Australians who rely on minimum rates under a modern award, the decision will mean a pay rise in the new financial year.

 

What is changing?

The Fair Work Commission has ordered a 4.75% increase to minimum wage rates in modern awards, effective from 1 July 2026.

The Commission has also increased the National Minimum Wage to:

• $1,004.90 per week, or
• $26.44 per hour

for full-time employees.

The Commission has also begun restructuring the lowest classification levels in the modern award system. The C13 classification, currently the lowest ongoing employment rate in many awards, will be phased out in three stages. As part of the first stage of that process, workers classified at C13 will receive an increase greater than 4.75%, with their wage rate moving closer to the higher C12 rate.

The entry-level C14 classification will also receive a corresponding increase to maintain its existing relationship with the C13 rate.

The Commission estimates that around 100,000 workers will benefit from these additional adjustments.

The Commission acknowledged that many award-reliant employees are still worse off in real terms than they were before the sharp rise in inflation that followed the pandemic.

While economic growth, employment and business investment remained relatively strong throughout much of 2025, inflation has remained higher than expected. The Commission also pointed to increased economic uncertainty arising from global events such as the Middle East conflict and ongoing cost-of-living pressures.

Balancing these competing factors, the Commission concluded that a larger increase sufficient to restore lost purchasing power fully would not be responsible in the current economic environment. Instead, it sought to ensure that award-reliant employees do not go backwards in real terms while providing additional support to the lowest-paid workers.

 

Who does this impact?

The increase will primarily affect employees paid at minimum rates under a modern award. The Fair Work Commission estimates that these workers represent around 21% of Australia’s workforce.

Award-reliant employees are particularly concentrated in industries such as:

• Retail
• Hospitality and accommodation
• Health care and social assistance
• Administrative and support services

Employees covered by enterprise agreements may also see flow-on effects where agreements reference or are benchmarked against award rates.

 

Avoid being underpaid

An underpayment arises when an employer does not pay an employee their correct entitlements under a contract of employment, the Fair Work Act 2009 (Cth), the National Employment Standards, a modern award or an enterprise agreement. Employees can be underpaid their entitlement to minimum wage, overtime, penalty rates, allowances, leave and loadings.

Employees paid under a modern award should check that their pay rates are updated from 1 July 2026. If you are unsure which award applies to your employment or whether you are being paid correctly, obtaining advice early can help ensure you receive your full workplace entitlements.

 

Disclaimer: This article should not be construed as legal advice and is not intended as such. If readers wish to obtain advice about anything contained in this article, they should speak with a lawyer and discuss their individual circumstances