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The Fair Work Commission has handed down its Annual Wage Review 2026 decision, coming into effect from the first full pay period on or after 1 July 2026.
Award rates will increase by 4.75%. The National Minimum Wage will increase to $26.44 per hour or $1,004.90 per week for a full-time employee working a 38-hour week.
This is one of the most significant wage decisions in recent years. While the increase falls short of the 5.75% rise awarded in 2023, it is notably higher than the increases handed down in 2024 and 2025 and reflects the Commission’s continued focus on addressing cost-of-living pressures faced by low-paid workers.
As an employer, you might read this and quietly think “This probably does not apply to us”…
- We pay above award
- Our people are salaried
- Payroll looks after that
- No one has complained
- We checked this a while ago.
Maybe. But when did you last check properly?
The annual wage review is not just relevant to businesses paying minimum Award rates. It can also affect businesses that pay above-Award rates, use salary arrangements, or rely on payroll systems and contracts designed to absorb allowances, penalties, overtime or other Award entitlements.
Roles change. Hours change. Business operations change. Over time, assumptions that were once correct can quietly become outdated.
A salary that comfortably covered Award entitlements several years ago may no longer do so. A classification that was correct when an employee commenced may not reflect the duties they perform today. Payroll settings that were configured correctly at one point may not have kept pace with legislative or workplace changes.
This is particularly important for businesses that rely on above-Award payments or salary arrangements. Paying more than the minimum rate does not automatically guarantee compliance. The question is whether employees receive at least what they are entitled to under the relevant Award or agreement based on the work they actually perform.
That is why 1 July should be viewed as more than a payroll update. It is a useful opportunity to review the broader employment arrangements that sit behind how people are paid.
What should employers check before 1 July?
Before the 1 July changes take effect, employers should be reviewing:
- whether an award or enterprise agreement applies, and whether classifications are correct
- minimum rates and payroll settings
- allowances, loadings, overtime and penalties
- travel, kilometre and reimbursement arrangements
- salary and above-award arrangements
- casual loading, casual engagement terms and casual conversion obligations
- superannuation and ordinary time earnings treatment
- employment contracts
- current rosters and work patterns
- time, attendance and wage records
- enterprise agreement rates and comparison checks, where relevant
- labour budgets, charge-out rates and roster assumptions for the new financial year.
For some businesses, this will be a straightforward exercise. For others, particularly where employees work shifts, overtime, weekends, across multiple classifications or under salary arrangements, a more detailed review may be required.
The objective is not to create concern. It is to ensure that businesses can be confident their employment arrangements remain compliant and fit for purpose.
Your Next Step
As part of our membership support, Full Circle HR will be working directly with our regular clients to proactively audit wages and employment conditions in readiness for 1 July. If your business has not recently reviewed classifications, allowances, payroll settings, above-award arrangements or contracts, now is the time.
If you haven’t reviewed classifications, allowances, salary arrangements or payroll settings recently, now is a good time to do so. If you’d like support from the FCHR Team, contact our HR & OHS Coordinator Kait at hello@fullcirclehr.com.au.