Minimum wage and award rates: what changes every 1 July, and what payroll has to do about it

Minimum wage increases are the most predictable payroll event in the Australian calendar and the one businesses are most often caught by. The decision lands in early June, the money moves on 1 July, and somewhere in between a pay run goes out on the old rates.

This page covers the current figures, the mechanism that produces them, and the three things payroll actually has to do. It is updated each year rather than replaced, so the link keeps working.

The current rates

From the first full pay period starting on or after 1 July 2026:

• National Minimum Wage: $26.44 an hour, or $1,004.90 a week.
• Minimum award wages: up 4.75%, with the lowest rate in any award that applies to ongoing employment no lower than $1,004.90 a week or $26.44 an hour.
• Entry-level rates that apply for the first six months of employment or less: at least $978.10 a week, or $25.74 an hour.
• Casuals on the National Minimum Wage: $33.05 an hour, which already includes the 25% casual loading.

Source: the Fair Work Commission's Annual Wage Review 2026 decision, announced 2 June 2026. The Fair Work Ombudsman publishes the full award-by-award rates, and those are the version to pay from.

How the timing actually works

Two dates matter and they are not the same date.

The Fair Work Commission announces its decision in early June. The increase then applies from the first full pay period starting on or after 1 July - not from 1 July itself.

That distinction is where the mistakes happen. If your fortnightly pay period runs from 29 June to 12 July, the new rates do not apply to it. They apply to the period starting 13 July. Paying the increase early is not a compliance problem, but it is money out the door earlier than required and it makes the following year's comparison confusing. Paying it late is a compliance problem.

The three things payroll has to get right

1. Work out who is actually affected

Far more people than the ones sitting exactly on the minimum. If an employee is paid above their award minimum, the increase can still catch them: the award rate may rise past what they are on. An employee whose pay has not moved for two years is the most likely to be quietly underpaid after a 4.75% award increase.

Annualised salary arrangements need checking too. A salary that comfortably absorbed the award last year may not this year, particularly where overtime and penalty rates are rolled in.

2. Update the system, not just the pay run

Changing a rate on one pay run and not in the employee's record means it reverts. In Xero the change belongs in the employee's pay template, and any pay items with hard-coded rates need updating alongside it. Rates flow through to leave loading, overtime multipliers and allowances, which is why a rate change that looks like one edit is usually several.

3. Check what moves with it

Superannuation is calculated on ordinary time earnings, so a wage increase lifts the super liability with it. Since 1 July 2026, super also has to be paid with each payday under payday super rather than quarterly, which means a July wage increase shows up in cash flow immediately rather than at the end of the quarter. We wrote about payday super separately.

What happens if you get it wrong

Underpayments accrue. A small hourly shortfall across a handful of staff is a manageable correction if it is caught in July and an expensive one if it is caught the following June, because it has to be back-paid in full with super recalculated on top.

Nobody is ever penalised for finding it themselves and fixing it. The problems start when someone else finds it first.

The honest version

None of this is difficult. It is one date, one set of figures, and a check of who sits near the line. It goes wrong because it happens once a year, at the same time as end of financial year, when everyone is busy - which is exactly the argument for it being somebody's job rather than something everyone assumes has been handled.

If you would rather it simply happened: that is what our payroll team is for. If you are doing it yourself, the Fair Work Ombudsman's pay calculator is the authority on award rates and worth using rather than assuming.

General information only, current as at the date above, and not a substitute for advice on your own award coverage. Rates and obligations change - confirm against the Fair Work Ombudsman before running pay.