Increases to the National Minimum Wage, Modern Award Rates & Pay Day Super Reminder

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 2026, as follows:

• Modern Award Rate Increases: The Modern Award minimum wage rates will increase by 4.75 %;

  
  

• Changes to lowest wage rate/classifications: Structural adjustments will also be made to the very lowest-paid classifications in the Modern Awards (namely classifications C13 and C14 wage rates).  The C13 rate is the lowest wage rate applicable to ongoing employment in the Modern Award system, and the C14 wage rate is a special entry-level wage rate applicable to a limited initial period of employment.  The C13 classifications in Modern Awards will be phased out.  The next level up, C12 will then become the lowest wage for ongoing employment.  This will be done in 3 stages, with the 1st stage as part of this review involving the C13 being increased by an additional amount representing 1/3rd of the difference between the C13 and C12 rates.  The C14 rate will be increased by the same percentage amount as the C13 rate to maintain its current relatively to C13.  These adjustments will result in the lowest wage rate in Modern Awards applicable to ongoing employment being $1,004.90 per week or $26.44 per hour, and the lowest wage rate applicable to entry-level employment for a period of no more than 6 months being $978.10 per week or $25.74 per week.  The Fair Work Commission estimates that this will impact around 100,000 of the lowest-paid workers; and

• National Minimum Wage Increase: The National Minimum Wage (which is aligned to the C13 classification rate) will increase from $948.00 per week, or $24.95 per hour, to $1,004.90 per week, or $26.44 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 required increases from the first full pay period starting on or after 1 July 2026.  You will also need to review your Modern Award classifications to revise and update in light of the above changes.

Pay Day Super - Also remember that employer superannuation contributions must be paid at the same time as salary and wages payments are made (instead of quarterly), from 1 July 2026, see: Payday Super | Australian Taxation Office

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