The Minimum Wage Has Increased — Is Your Payroll Up to Date?

Australia’s national minimum wage increased by 4.75% on 1 July 2026, following a decision handed down by the Fair Work Commission on 2 June 2026. The new rate is $26.44 per hour, or $1,004.90 per week for a full-time employee working 38 hours. If you employ staff — whether they are on the minimum wage or covered by a modern award — you need to confirm that your payroll reflects the new rates and that you have applied them correctly from the right date.

Who the increase applies to

The 4.75% increase covers two groups of employees. The first is those paid at the National Minimum Wage — the base rate for employees not covered by an award or enterprise agreement. The second, and generally larger, group is employees covered by a modern award. There are more than 120 modern awards in Australia covering everything from retail and hospitality to construction, professional services, and transport. If your employees are covered by one, their minimum rates under that award have also been increased by 4.75%, subject to a minimum floor of $1,004.90 per week or $26.44 per hour for ongoing employment, and $978.10 per week or $25.74 per hour for entry-level rates that apply during the first six months of employment.

When the new rates take effect

The increase does not automatically apply from 1 July for every employee at the same moment. The correct starting point is the first full pay period that commences on or after 1 July 2026. So if your pay periods run Monday to Sunday, the first week that begins on or after 1 July is the one where the new rate applies. If your system processes payroll weekly but the period started before 1 July, that pay run uses the old rate. It’s important to identify the exact date carefully — underpayment, even unintentional, is a breach of the Fair Work Act and can result in back-pay obligations and penalties.

Casual employees

If you employ casual staff, their minimum rate has also increased. Casual employees entitled to the National Minimum Wage must now receive at least $33.05 per hour, which incorporates the 25% casual loading on top of the new base rate of $26.44. If your casuals are award-covered, check the specific award for the casual loading that applies, as it may differ from the standard 25%.

Checking your payroll

Do not assume your payroll software has updated automatically. While many providers push rate updates ahead of 1 July, it is your responsibility as an employer to confirm the rates are correct for each award and role type. Log in to your payroll system, check the rates loaded against each employee’s classification, and cross-reference them against the Fair Work Commission’s updated pay guide for the relevant award. If you outsource payroll, confirm with your provider that the update has been applied and for which pay period.

What happens if you get it wrong

The Fair Work Ombudsman actively investigates minimum wage underpayments, and the consequences for employers can be significant. Even where an underpayment is accidental, you are required to back-pay affected employees for the full shortfall and may face further scrutiny of your broader payroll practices. Getting this right from the outset is far simpler than having to unwind and correct it later.

If you are unsure whether your payroll is set up correctly under the new award rates, or you want a second set of eyes on your pay classifications and rates, get in touch with us. We can help you confirm everything is correct and avoid any costly compliance issues down the track.