The Minimum Wage Increases on 1 July 2026 — Here’s Your Employer Action List

Two of the most significant payroll changes in years hit on the same date: 1 July 2026. The Fair Work Commission has confirmed a 4.75% increase to all modern award minimum wages, and the ATO’s Payday Super reform simultaneously changes how and when employers must pay superannuation. If you haven’t already reviewed your payroll, you’re cutting it close.

Here’s exactly what you need to know and do as an employer before the deadline.

What Is the Minimum Wage Increase for July 2026?

The Fair Work Commission’s Annual Wage Review 2026 panel handed down its decision on 2 June 2026, announcing a 4.75% increase to all minimum award rates under modern awards. Separately, the National Minimum Wage (NMW) — which applies to employees not covered by a modern award or enterprise agreement — increases by approximately 6%.

The new rates from 1 July 2026 are:

The increase takes effect from the first full pay period on or after 1 July 2026. That means if your pay period begins on 30 June, the new rates don’t apply until the next pay period. However, if your pay period starts on 1 July or later, the new rates apply immediately.

Who Does the Minimum Wage Increase Apply To?

The 4.75% increase applies to all employees covered by a modern award. According to the Fair Work Commission, modern award-reliant employees represent approximately 21.1% of the national workforce — about 2.8 million workers. If you employ anyone on award rates, this affects you.

The following categories of employees are directly impacted:

• Full-time and part-time award-covered employees — their hourly and weekly rates must increase by 4.75%
• Casual employees — their base rate increases by 4.75%, and their 25% casual loading is calculated on the new base rate
• Junior employees and apprentices — rates set as a percentage of the adult minimum rate will automatically recalculate

If you pay above the award minimum through an enterprise agreement, you still need to check. Under the Fair Work Act 2009, enterprise agreement rates must always remain above the equivalent modern award rates. If the 4.75% increase pushes award rates above what your enterprise agreement provides, you may be in breach.

What If You Pay Above Minimum Rates?

Many employers pay above the award minimum — either through individual contracts, annualised salary arrangements, or simply as a business practice to attract and retain staff. Even so, you are not necessarily exempt from this review.

If you use annualised salary arrangements (where a single salary is intended to cover all award entitlements including overtime, penalties, and allowances), you must re-run the calculation. The salary must still be sufficient to cover all entitlements at the new rates. Underpayment claims based on failed annualised salary set-off calculations are among the most common and costly wage compliance issues Australian employers face.

Payday Super — What Starts on 1 July 2026

Alongside the wage increase, the ATO’s Payday Super reform takes effect on 1 July 2026. This is a significant change to how superannuation guarantee contributions work in Australia.

Currently: Employers pay superannuation quarterly — within 28 days of the end of each quarter (October, January, April, July).

From 1 July 2026: Employers must pay superannuation to the employee’s nominated super fund within 7 days of each payday. There is no longer a quarterly payment option.

This change has major implications for cash flow and payroll systems:

• If you pay weekly, you must remit super weekly
• If you pay fortnightly, super is due fortnightly
• Payroll software must be configured to calculate and remit super on each pay run
• Single Touch Payroll (STP) reporting requirements change — both wages and super liability must now be reported each payday

Failure to comply with Payday Super will result in a Superannuation Guarantee Charge (SGC) levied by the ATO, plus interest and administration fees. These are not tax-deductible. The ATO has indicated it will be actively monitoring compliance from 1 July 2026.

Your Minimum Wage Increase July 2026 Employer Checklist: 7 Steps to Take Now

1. Identify which modern award(s) cover your employees. Not sure? The Fair Work Ombudsman’s award finder at fairwork.gov.au can help. Getting this wrong is the single most common payroll compliance failure.
2. Look up the new award rates for each classification. Updated pay guides for every modern award will be published by the Fair Work Ombudsman from 1 July. Cross-check each employee’s rate against their award classification.
3. Check your enterprise agreement (if applicable). Confirm that the EA rates still exceed the new modern award minimums for every classification. If any EA rate falls below the award, the award rate automatically applies — but you need to update your payroll to reflect this.
4. Recalculate annualised salary arrangements. Run the numbers using the new award rates, including overtime, penalty rates, allowances, and loadings. Document the calculation and keep records as required under the Fair Work Act 2009.
5. Update your payroll software. Contact your payroll provider or confirm your software has updated award rate tables from 1 July. For Payday Super, confirm your software can calculate and remit super on each pay run and update STP reporting accordingly.
6. Notify employees of any pay changes. While not always legally required, notifying employees of rate changes is good practice and reduces confusion and disputes.
7. Review pay slips. From 1 July, pay slips must accurately reflect the new rates. Incorrect pay slips are a Fair Work Act breach in themselves.

What Happens If You Don’t Comply?

Paying employees below the new minimum award rates from 1 July 2026 is underpayment of wages under the Fair Work Act 2009. The consequences are real:

• Fair Work Ombudsman investigations and compliance notices
• Back-pay orders for the underpayment (plus interest)
• Civil penalties of up to $18,780 per breach for individuals or up to $93,900 per breach for corporations
• From 1 January 2025, intentional underpayment is a criminal offence — carrying up to 10 years imprisonment and fines of up to $7.8 million for corporations

On the super side, failing to pay Payday Super on time means the ATO levies an SGC — not tax-deductible — plus a 10% nominal interest charge and a $20 administration fee per employee per quarter. Repeated failures can trigger ATO audits and director liability for unpaid super.

Specific Awards Employers Should Check Now

With over 120 modern awards in the national system, almost every industry is affected. These are some of the most commonly relied-upon awards for small and medium employers:

If you’re not certain which award applies to your employees, or you’re unsure whether your annualised salary absorbs all entitlements, now is the time to get advice — not after 1 July.

Frequently Asked Questions

What is the new minimum wage from 1 July 2026?

From 1 July 2026, the National Minimum Wage increases to $26.44 per hour or $1,004.90 per week based on a 38-hour week. All modern award minimum rates increase by 4.75%. The new rates apply from the first full pay period on or after 1 July 2026.

Does the 4.75% increase apply to all employees?

The 4.75% increase applies to employees covered by a modern award. If you pay employees under an enterprise agreement, you need to check whether the agreement rates still sit above the new award minimums. Employees paid well above minimum rates under individual contracts are generally unaffected, but annualised salary arrangements must still be reviewed to ensure they absorb all award entitlements at the new rates.

When does Payday Super start?

Payday Super starts on 1 July 2026. From that date, employers must pay superannuation contributions to each employee’s super fund within 7 days of each payday — not quarterly as previously required. Payroll systems must be updated before this date.

What happens if I miss the 1 July 2026 wage increase deadline?

Paying below the new minimum award rates constitutes underpayment of wages under the Fair Work Act 2009. Consequences include Fair Work Ombudsman investigations, back-pay orders, and civil penalties of up to $93,900 per breach for corporations. Since 1 January 2025, intentional underpayment is a criminal offence.

Does the wage increase apply if I pay above the minimum?

If you already pay well above the award minimum, the increase may be absorbed. However, if you use annualised salaries or loaded rates, you must recalculate to ensure all award entitlements — including overtime, penalty rates, allowances, and loadings — are still fully covered at the new rates. A review is strongly recommended.

How do I find the new award rate for my employees?

The Fair Work Ombudsman’s Pay Calculator at fairwork.gov.au is updated with new rates from 1 July 2026. You need to know which modern award covers each employee and their classification level within that award. Fair Work Centre can help you identify the correct award and classification for your specific workforce.

Do casual employees get the wage increase too?

Yes. Casual employees covered by modern awards receive the 4.75% increase to their base rate from 1 July 2026. Their casual loading (typically 25%) is calculated on top of the new base rate. Casual pay rates must be updated at the same time as permanent employees.

What about superannuation — does the rate change in July 2026?

The superannuation guarantee rate remains at 11.5% — there is no rate change in July 2026. However, the Payday Super reform changes the timing: super must now be paid within 7 days of each payday instead of quarterly. Failure to comply attracts an SGC charge from the ATO that is not tax-deductible.

Fair Work Centre is an independent private organisation providing advisory services to employers only. It is not associated with or authorised by the Fair Work Ombudsman, the Fair Work Commission, or any government authority. The information in this article is general guidance only. For advice specific to your situation, contact us on 1300 161 828.