The Fair Work Commission's 2026 Annual Wage Review increased minimum wages in all modern awards by 4.75%.

The National Minimum Wage also increased by approximately 6%, rising from $24.95 per hour ($948 per week) to $26.44 per hour ($1,004.90 per week).

As relatively few employees are engaged on the National Minimum Wage, the primary impact for most employers is the 4.75% increase to modern award minimum wage rates.

These increases took effect from the first full pay period commencing on or after 1 July 2026.

 

Size of the increase

In its decision, the Fair Work Commission noted that determining this year's Review outcome was particularly challenging due to the unusual complexity of the matters it was required to consider. The Commission cited ongoing global economic uncertainty, including disruption to oil supplies arising from conflict in the Middle East and its impact on inflation, as factors influencing its decision.

Australian Business Lawyers & Advisors represented Business NSW and Australian Business Industrial throughout the Annual Wage Review process, advocating for a more moderate increase of 3.5%.

 

Structural adjustment to the lowest-paid classifications in modern awards

Modern award wage rates increased by 4.75%, effective from the first full pay period commencing on or after 1 July 2026.

This increase also included a structural adjustment to the lowest-paid classifications in modern awards, specifically the C13 and C14 wage rates.

The C13 rate is the lowest wage rate applicable to ongoing employment in the modern award system, while the C14 rate is a special entry-level wage applicable for a limited initial period of employment.

As foreshadowed in last year's Annual Wage Review, the Commission has begun phasing out the C13 classification by making the next wage level, C12, the lowest rate for ongoing employment.

This transition will occur over three stages, with the first stage implemented as part of the 2026 Review. Under this approach, the C13 rate increased by an additional amount representing one-third of the difference between the C13 and C12 rates. The C14 rate increased by the same percentage to maintain its existing relativity.

As a result, the lowest ongoing modern award wage is now $1,004.90 per week ($26.44 per hour), while the lowest entry-level wage (for employment of no more than six months) is $978.10 per week ($25.74 per hour).

 

Gender equality initiatives

The Fair Work Commission continues its work to address gender-based undervaluation in modern awards and ensure workers receive equal remuneration for work of equal or comparable value.

The Commission has completed its review of the priority awards identified during the 2024 Annual Wage Review. This has resulted in phased wage increases for employees in children's services, dental assisting, pathology, disability home care, pharmacy and several other health professions over the coming years.

Australian Business Industrial and Business NSW actively participated in these proceedings to help shape the extent of award wage increases arising from gender-based undervaluation.

The Commission has also indicated it will continue reviewing professional classifications across modern awards, with the aim of completing this work by the 2027 Annual Wage Review. In addition, it is expected to hear significant gender undervaluation cases affecting nurses and flight attendants over the coming year.

 

What do employers need to do?

Employers should ensure employees who are covered by a modern award or the National Minimum Wage are receiving the correct rates of pay.

Businesses that pay above award rates, annualised salaries or flat rates should also review their remuneration arrangements to ensure employees remain better off overall and all minimum award obligations continue to be met following the wage increase.

Employers operating under an enterprise agreement should confirm that their agreement base rates remain no lower than the applicable modern award rates, particularly where the agreement was approved several years ago.

 

The changes are now in effect

The wage increases came into operation from the first full pay period on or after 1 July 2026. Employers that have not already implemented the new rates should review their payroll arrangements as soon as possible to ensure compliance.

The Fair Work Commission's full decision and announcement transcript remain available for businesses seeking further information.

If you're unsure how the Annual Wage Review affects your business, My Business Workplace subscribers can access expert workplace advice and practical resources to help them understand their obligations and remain compliant.

 

Fiona Corbett is National Manager Workplace Advice at Australian Business Lawyers & Advisors (ABLA). This article was originally published by Australian Business Lawyers & Advisors on 2 June 2026 and has been republished on My Business with minor updates for timeliness.

 

 

Fiona Corbett National Manager Workplace Advice | Australian Business Lawyers & Advisors

Fiona has led the Workplace Advice Unit since June 2010, bringing over three decades of experience across industrial relations, human resources, and business management. Fiona previously worked as an Industrial Relations Advisor with the Federal Government, where she honed her skills in navigating complex employment issues.