National Minimum Wage to be increased 3.5% from 1 July 2025

The Fair Work Commission has announced a 3.5% increase to the National Minimum Wage and all minimum award wages as part of its 2024–2025 Annual Wage Review.

What is changing?

This increase will apply from the first full pay period starting on or after 1 July 2025.

The National Minimum Wage will rise to $948 per week, or $24.95 per hour, based on a 38-hour full-time week. This change affects employees not covered by a registered agreement.

Employees covered by an agreement

An enterprise agreement sets out minimum employment conditions. It can apply to one business or a group of businesses.

If you’re covered by an enterprise agreement, the minimum wage increase may also apply. This is because the base pay rate in an enterprise agreement can’t be less than the base pay rate in the relevant award.

Why is it changing?

Each year, the Fair Work Commission, Australia’s national workplace relations tribunal, reviews minimum wages to ensure they provide a fair and relevant safety net for workers. This review considers economic conditions such as inflation, cost of living, employment growth, and productivity.

The 2024–2025 decision reflects the Commission’s intention to support low-paid workers while balancing economic conditions and business sustainability.

Where can I find more information?

The Fair Work website provides comprehensive information for both employers and employees, including industry-specific resources.

This link to the Fair Work website, guides employers and employees through looking for the relevant pay rates; https://calculate.fairwork.gov.au/findyouraward

Employing individuals brings with it a range of responsibilities and obligations, so reviewing this website periodically is recommended, to help you with understanding these obligations which may vary depending on the industry.

Does my software automatically update new pay rates?

Xero does not automatically update award rates or the rates to be in line with national minimum wage requirements, and so this must be done manually.

If your business operates within an industry covered under an award, it is recommended to upgrade your payroll software to a more advanced system such as Tanda, which also performs better with rostering and timesheets. Software such as Tanda automatically adjust pay rates based on new award rates and minimum wage requirements, to minimise risk of underpayment.

Superannuation Changes

In addition to the new pay rate changes from1 July 2025, the superannuation guarantee rate is also increasing to 12%. Xero will automatically update this rate, on the basis that employees within Xero Payroll are set up to receive superannuation based on the Statutory Rate calculation type. Other systems work similarly to update this rate automatically.

No further superannuation guarantee rate changes are expected based on current legislation.

Call to action

If your business employs individuals and you would like to understand more about how these changes may affect your business, please contact us and we can assist.