Quick Summary
Quick Summary
- Modern award minimum wages increase by 4.75% from 1 July 2026, the National Minimum Wage rises to $1,004.90 per week
- Fair Work Commission determination [2026] FWCFB 3500 mandates the increase under Fair Work Act section 284
- Employers must update payroll by 30 June to apply the new rates from 1 July
- Underpayment triggers back-pay claims, interest, wage theft allegations, and Fair Work Ombudsman penalties up to $75,000+
- All award-covered staff (retail, hospitality, aged care, construction, healthcare, etc.) receive the increase
4.75% Award Wage Increase: What Changed
The Fair Work Commission announced the 2026 Annual Wage Review on 2 June 2026. The decision:
- Modern award minimum wages: up 4.75% across all awards
- National Minimum Wage: up from $971.20 to $1,004.90 per week ($26.44 per hour)
- Effective date: first full pay period on or after 1 July 2026
- Legal basis: Fair Work Act 2009, section 284
This is the third consecutive year of above-inflation wage growth (2024: 3.75%, 2025: 3.82%, 2026: 4.75%). The Fair Work Commission considered economic data, inflation, productivity, and the need for wage justice.
Example: Retail Industry Award
Let’s say you employ three checkout operators under the General Retail Industry Award 2020 (MA000003):
| Role | Old Rate (pre-1 July 2026) | New Rate (from 1 July 2026) | Weekly Increase |
|---|---|---|---|
| Full-time retail worker (Level 1) | $712.50 | $746.01 | $33.51 |
| Full-time retail worker (Level 2) | $753.20 | $788.35 | $35.15 |
| Casual (loading 25%) | $890.63 | $932.07 | $41.44 |
Even a single employee on a $712.50 base gets a $1,740 annual raise. Across a team of 20 award-covered staff, your wage bill increases by ~$35,000–40,000 per year.
Which Awards Are Affected?
All of them. There is no award that escapes the 4.75% increase. Here are the largest:
- General Retail Industry Award 2020 (MA000003)
- Hospitality Industry (General) Award 2020 (MA000007)
- Aged Care Award 2010 (MA000034)
- Construction, Forestry and Maritime Employees’ Award 2020 (MA000033)
- Professional Employees’ Award 2010 (MA000152)
- Health Professionals Award 2020 (MA000026)
- Fast Food Industry Award 2020 (MA000063)
- Employees – Award (MA200000)
If you’re unsure which award applies to your staff, use the Fair Work Ombudsman’s awards search tool.
📅 Urgent: Payroll Deadline 30 June 2026
The 4.75% modern award wage increase takes effect 1 July 2026. You must update payroll by 30 June. Missing this deadline creates back-pay liability, underpayment claims, and Fair Work Ombudsman penalties up to $75,000+. Act now.
Key Takeaways
Key Takeaways for Employers
- ✓All modern award rates rise 4.75% from 1 July 2026 — this is mandatory, not optional
- ✓The National Minimum Wage is now $1,004.90/week or $26.44/hour — check Fair Work Ombudsman pay guides for your specific awards
- ✓Update payroll by 30 June — delays risk back-pay claims, underpayment allegations, and Fair Work penalties ($75,000+)
- ✓Casuals, part-time, and full-time staff all covered — don’t overlook any group
- ✓Enterprise agreements don’t auto-increase — but they must not fall below the new award rates
- ✓Keep 7 years of records showing old rates, new rates, and when you updated payroll
Fair Work Centre
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Compliance Checklist for Employers
By 30 June 2026 (This Week)
- Identify the modern awards that apply to your workforce.
- Download the new minimum rates from Fair Work Ombudsman or FWC website.
- Calculate the 4.75% increase from your current rates.
- Review your payroll system for any hardcoded rates — update them.
- Test a trial pay run with the new rates. Check that all award-covered roles are captured.
- Train your payroll team on the new rates and effective date.
- Review any enterprise agreements or individual contracts — do they sit above the award and need separate updating? (Usually no, but check.)
- Communicate the wage rise to your staff (if not already aware).
From 1 July 2026
- Apply the new award rates to the first full pay period starting on or after 1 July.
- Ensure pay slips clearly show the new hourly/weekly rate.
- If you missed the deadline, calculate back-pay from 1 July plus interest (currently ~6% p.a.) immediately.
Ongoing (Seven Years)
- Keep records of the old rates, new rates, and when you updated payroll.
- If an employee raises an underpayment claim, you’ll need these records to prove compliance.
Common Employer Mistakes (And How to Avoid Them)
Mistake 1: “We’ll Apply It Next Month”
The risk: Fair Work Ombudsman audits can go back seven years. If you underpay from 1 July to 31 August, and an employee or the Ombudsman discovers it, you owe back-pay plus interest plus penalties.
The fix: Update payroll by 30 June. Treat this like a tax deadline — non-negotiable.
Mistake 2: “We Only Pay 5% Above the Award, So We’re Fine”
The risk: You might think a $750 base + your 5% premium = $787.50 satisfies the award. But if the award’s new rate is $790, you’re underpaying by $2.50 per week.
The fix: Always calculate against the actual award rate, not your historic premium.
Mistake 3: “Our Enterprise Agreement Overrides the Award”
The risk: Enterprise agreements CAN override awards — but only if they’re more generous. If your EA sets a minimum of $700 and the award minimum is now $746, the award wins.
The fix: Cross-check your EA clauses against the new award rates. If unsure, speak to one of our employment lawyers.
Mistake 4: “Casual Staff Aren’t Covered by Awards”
The risk: Casuals ARE covered by awards. They just earn a 20–25% loading instead of penalty rates. The 4.75% applies to their base rate.
The fix: Update casual rates the same way. Don’t miss casual loaders.
Mistake 5: “We’ll Freeze Bonuses to Offset the Wage Rise”
The risk: The award wage is a legal minimum — you can’t unilaterally reduce bonuses or conditions to offset it. Doing so may breach the Fair Work Act (adverse action) or underpayment clauses.
The fix: Budget for the wage rise as a cost. It’s non-negotiable.
The Legal Basis: Fair Work Act Section 284
Section 284 of the Fair Work Act 2009 requires the Fair Work Commission to review the National Minimum Wage and modern award minimum wages annually. The Commission considers:
- Economic and social conditions
- The needs of low-paid workers
- The capacity of employers to pay
- Productivity and wage justice
The 2026 decision (FWC determination [2026] FWCFB 3500) concluded that a 4.75% increase balanced all these factors. It’s not guidance — it’s a legal determination you must follow.
Key Resources for Employers
Don’t navigate this alone. Fair Work Centre provides employment law advice, HR documents, and Fair Work Commission representation for employers in your situation. Get straight answers from employment lawyers who specialise in award compliance:
- Modern Awards Compliance Guide (internal resource)
- Fair Work Ombudsman Pay Guides (official rates)
- FWC Annual Wage Review 2026 Decision (determination details)
- Payroll Compliance for Employers (Fair Work Centre)
- HR Best Practice Resources (Fair Work Centre)
Frequently Asked Questions
Only employees covered by modern awards. Staff on enterprise agreements or individual contracts above the award get whatever their agreement specifies. If your EA minimum is below the new award rate, they get the award rate.
By 30 June 2026. The new rates apply from the first full pay period starting on or after 1 July. If you miss this, you must calculate back-pay from 1 July plus interest and may face Fair Work penalties.
No. The award wage is a legal minimum you can’t avoid. Reducing hours in response to the wage rise may constitute adverse action under the Fair Work Act. Budget for the 4.75% increase as a business cost.
Yes. Their base rate increases by 4.75%. The casual loading (typically 20–25%) is applied on top of the new base rate.
Your base payment must be at least 4.75% higher than the old award rate, or equal to the new award minimum — whichever is higher. If the old rate was $700 and you paid $770 (10% above), the new award rate is $732.50, so your employee gets at least $732.50 (usually your existing $770, if it’s still above).
Fair Work Ombudsman can investigate. Civil penalties apply: up to $15,000 for individuals, $75,000+ for companies. Plus back-pay + interest + legal costs (often $50,000–$200,000+ to defend a dispute).
Not legally required, but best practice. Include it on their pay slip or send an email. Transparency reduces disputes and keeps morale high.
Visit the Fair Work Ombudsman’s pay guides: https://www.fairwork.gov.au/pay-and-wages/minimum-wages/pay-guides. Search for your industry (retail, hospitality, aged care, etc.) and download the updated award rates.
Payroll tax depends on your total payroll and your state’s threshold. The wage rise increases your payroll amount, which may increase payroll tax liability, but the tax rate stays the same. Check with your accountant on your state’s specific rules.
No. Enterprise agreements are static unless you renegotiate. But EA employees are still covered by awards as a safety net. If their EA minimum is below the new award rate, they get the award rate.
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