From 1 July 2026, Australia’s minimum wage and modern award rates jumped 4.75% — a significant payroll change that affects every employer. If you’re not ready, you risk underpaying staff, missing superannuation deadlines, and facing Fair Work compliance breaches.

This is non-negotiable. It’s not a suggestion — it’s the law. Here’s what you must do.

What Changed on 1 July 2026?

The Fair Work Commission’s Annual Wage Review 2026 delivered a 4.75% increase across the board:

• National Minimum Wage (NMW): Now $1,004.90 per week or $26.44 per hour (was $960.50 / $25.27/hr)
• Modern Award minimum rates: Increased by 4.75% across all classifications
• High-income threshold: Increased to $190,100 (affects annual leave and leave loading rules)
• Payday Super mandate: Superannuation must now be paid on the same day as wages — every pay cycle, no delay

If your award or NMW employee earned $960.50 last week, they earn $1,004.90 this week. No exceptions. No transition periods.

Why This Matters to You

Underpaying by even $0.01/hour exposes you to:

• Back-pay liability: Fair Work investigations will calculate what staff should have earned
• Penalties: Up to $17,000 per employee (civil penalty) or $34,000+ if deliberate
• Reputational damage: Non-compliance is publicly reported by the Fair Work Ombudsman
• Cost of rectification: Calculating and paying back wages across multiple years is expensive

The Payday Super rule creates a new operational requirement: your payroll system must push super contributions to the fund on payday, not days or weeks later. Many employers still use batch super processing — that’s now non-compliant.

Quick Compliance Checklist

By 1 July 2026 (or immediately if you missed the deadline):

• ☐ Audit your payroll system — Does it auto-calculate rates for your award or NMW staff?
• ☐ Update award/NMW wage rates in your HR system for every affected employee
• ☐ Verify modern award entitlements — Check if your staff are on the correct award (many employers use the wrong one)
• ☐ Check high-income earner status — If staff now earn over $190,100, their leave entitlements may shift
• ☐ Reconfigure super settings — Set super to pay same-day as wages, not bulk batch
• ☐ Test payroll runs — Run a test pay cycle to confirm correct rates and super timing
• ☐ Document the change — Keep records proving you implemented the increase (Fair Work audits expect this)
• ☐ Communicate to staff — Send payslips showing the increase — transparency builds trust
• ☐ Review contracts — If contracts reference “award rates,” they auto-update; if they reference fixed rates, you may need to amend them
• ☐ Advise sub-contractors — If you engage labour hire or contractors, ensure they’re compliant too

How to Update Your Payroll System

If you use a payroll software (Xero, Reckon, Deputy, etc.):

1. Log in and navigate to Payroll Settings or Wage Rates
2. Find the section for NMW or Modern Award rates
3. Update the hourly or weekly rate to the new amount
4. Set Superannuation payment timing to “same day as pay run” (not “batch” or “delayed”)
5. Run a test pay cycle for one employee — verify the rate and super payment date
6. Publish the next real pay cycle

If you use manual payroll:

1. Print or download the Fair Work official wage rates table
2. Calculate the new weekly/hourly rate for each employee (multiply old rate × 1.0475)
3. Create a new payroll template with updated rates
4. Set a reminder to pay super on payday, not later

If you use a bureau or accountant: Contact them immediately. Tell them: “I need confirmation that payroll is updated for 1 July 2026 rates and Payday Super rules.” Ask for a written confirmation.

Modern Awards: Are You on the Correct One?

Many employers unknowingly use the wrong award. This is a compliance liability. Check yours:

• Hospitality workers → Hospitality Industry Award
• Retail → General Retail Industry Award
• Aged care → Aged Care Award
• Childcare → Children’s Services Award
• Manufacturing → Manufacturing Award

If you’re unsure, the Fair Work Award Finder will tell you. Using the wrong award could mean underpaying staff for years — and back-pay liability extends to the date of underpayment, not just from 1 July.

Payday Super: The New Requirement

From 1 July 2026, superannuation contributions must be paid to the fund on the same calendar day as wages. This is a legislative requirement, not a voluntary best practice.

Old way (still happening at many employers):

• Pay day: Friday, 30 June 2026
• Super payment: Tuesday, 4 July 2026 (4 days later)
• This is now non-compliant.

New way (mandatory):

• Pay day: Friday, 30 June 2026
• Super payment: Friday, 30 June 2026 (same day)

What to do:

1. Check your payroll software settings — ensure super is flagged as “same-day payment”
2. Notify your super fund that contributions will arrive same-day (most funds process this overnight)
3. If using a payroll bureau, ask them to confirm same-day super processing
4. Run a test pay cycle and confirm the super contribution hits the fund by end-of-day

Failure to pay super same-day can result in penalties ($2,000–$17,000 per employee). The Fair Work Ombudsman is actively monitoring this.

High-Income Threshold: $190,100

If an employee earns over $190,100 per year (gross), they may no longer be entitled to:

• Paid annual leave (they’re excluded from NES annual leave if earning above threshold)
• Loading on unused annual leave

What to do:

• Check payroll records for anyone earning over $190,100
• If they were entitled to paid annual leave before 1 July and their salary crossed the threshold after 1 July, you may need to adjust their leave entitlements going forward
• Keep records of the change for Fair Work compliance

Common Employer Mistakes (Don’t Make These)

Mistake 1: “I’ll update payroll next month.”
Non-compliance accrues daily. Staff are entitled to the new rate from 1 July, even if you update payroll in August. You’ll owe back-pay.

Mistake 2: “My software updates automatically.”
Some systems do; many don’t. Verify manually by checking one payslip. Don’t assume.

Mistake 3: “Super can wait — we batch it monthly.”
Same-day super is now mandatory. Batching monthly is non-compliant. Change your settings today.

Mistake 4: “Casuals aren’t affected.”
Casuals on modern awards are affected. Check your award. The NMW increase applies to all employees, casual or permanent.

Mistake 5: “We’ll handle it with next year’s pay review.”
The increase is already in effect. Delaying compliance compounds the breach and increases back-pay liability.

What Fair Work Will Check

If the Fair Work Ombudsman audits your business, they’ll verify:

1. Payslips show correct rates from 1 July 2026 onwards
2. Timesheets match payroll (no underreporting of hours to offset the increase)
3. Super contributions are same-day for all recent pay cycles
4. Modern award is correct for the role
5. High-income earners are properly classified
6. Records show awareness — emails, system updates, payroll changes

Action Plan: This Week

Monday: Audit your payroll system — check if rates have been updated

Tuesday: Verify the modern award(s) applying to your staff. Contact your super fund or payroll provider and confirm same-day super is configured

Wednesday: Run a test pay cycle for one employee. Check the payslip: correct wage rate? Super paid same-day?

Thursday: If issues found, contact your payroll provider or accountant. Document the changes you’ve made

Friday: Brief your team (HR, payroll, finance) on the new rates and rules. File your compliance checklist for audit evidence

When to Seek Advice

You should contact an employment lawyer if:

• You’re unsure which modern award applies to your staff
• You’ve discovered underpayment dating back months or years
• You’re not sure if your payroll system is compliant
• You need help calculating back-pay

Fair Work Centre can advise on award classification, payroll compliance, and back-pay calculations. Book a free initial advice call or call 1300 161 828 for a confidential discussion.

Final Word

This isn’t just a wage increase — it’s a legislative change with real compliance teeth. The Fair Work Ombudsman is actively monitoring wage compliance, and penalties are increasing. Employers who move quickly and verify their payroll are protected; those who delay or assume their system is compliant risk substantial liability.

Update your payroll today. Verify the increase went through. Check that super is same-day. Keep records. Move on.