Increases to the National Minimum Wage, Modern Award Rates & Employer Superannuation Contributions

The Fair Work Commission has this morning handed down increases to the Modern Award minimum rates of pay and the National Minimum Wage, which will be effective from the first full pay period on or after 1 July 2025, as follows:

• Modern Award Rate Increases: The Modern Award minimum wage rates will increase by 3.5 %; and

• National Minimum Wage Increase: The National Minimum Wage will be increased by the same 3.5 % and will increase to $948.00 per week, or $24.95 per hour.

The Fair Work Ombudsman will soon release the updated Modern Award Pay Guides with the updated rates of wage, allowances and other monetary entitlements, see: Pay guides - Fair Work Ombudsman 

Remember that you will need to check the relevant minimum rates of pay, as well as other monetary rates payable under applicable Modern Awards, including penalty rates, as well as all allowances, loadings etc, and review your wage arrangements in place, and implement the required increases from the first full pay period starting on or after 1 July 2025.

Also note that employer superannuation contributions will also increase from 11.5% to 12% on and from 1 July 2025, see: Super guarantee | Australian Taxation Office (ato.gov.au).  The Fair Work Commission has again taken this increase into account as a moderating factor, as well as additional factors this year, including the uncertainty created by changing US trade policies, and some indications of weakness in the accommodation and food services sectors, where a significant proportion of Modern Award covered/reliant workers are employed.  The Fair Work Commission will also be continuing in its targeted program to review particular Modern Award classifications in order to eliminate gender-based undervaluation of work in Modern Awards and ensure that female workers receive equal remuneration for work of equal or comparable value, which will include a review of all professional classifications (that require a university degree) in Modern Awards.

Please also remember that there are a range of other IR changes through the various loophole changes that are now in place that businesses should be across, including changes to casual and independent contractor arrangements. 

If you have any questions about the impact of these wage increases, or what your business needs to do in light of the raft of recent IR changes, please contact IR Legal Solutions.