The national minimum wage increase 2026 lifts Australia’s minimum wage to $1,004.90 a week, or $26.44 an hour, for a standard 38-hour week. This is the first time the National Minimum Wage has passed $1,000 a week. The change follows the Fair Work Commission’s Annual Wage Review 2026 decision, handed down on 2 June 2026, and applies to pay periods starting on or after 1 July 2026.
For Australian SMEs, this isn’t just a payroll line item. It touches award classifications, casual loadings, enterprise agreements, and the timing of your very next pay run. Here’s what business owners need to check before the new rates apply.
What is the new national minimum wage from 1 July 2026?
From 1 July 2026, the National Minimum Wage rises to $1,004.90 per week, or $26.44 per hour, based on a 38-hour week. This applies to employees who aren’t covered by a modern award or enterprise agreement.
It’s a significant milestone. This move reflects the Fair Work Commission’s Expert Panel weighing cost-of-living pressures against business conditions across the economy.
If any of your staff are award-free and paid at or near the minimum, this is the figure to check first.
How much are modern award wages increasing in 2026?
Most Australian employees aren’t paid the National Minimum Wage directly. They’re covered by a modern award, and the award wage increase July 2026 rates rose separately, by 4.75 per cent.
The Fair Work Commission’s Annual Wage Review 2026 decision set a floor for the lowest award classifications too. Under the new rates:
- The Australia lowest wage ongoing rate in any award must be at least $1,004.90 per week, or $26.44 per hour
- Entry-level rates, which apply for the first six months of employment, must be at least $978.10 per week, or $25.74 per hour
When exactly does the new rate apply to my business?
This is where a lot of employers trip up. The new rates don’t apply from 1 July itself. They apply from your first full pay period starting on or after 1 July 2026.
For most businesses, that means the increase lands partway through a pay cycle, not neatly on the calendar date. If your pay week runs Wednesday to Tuesday, for example, and 1 July falls midweek, the old rates still apply to that pay period. The new rates kick in with the next full cycle.
Getting this date wrong in either direction, applying it too early or too late, creates underpayment or overpayment issues that are genuinely painful to unwind later. It’s worth confirming the exact date against your own pay cycle before processing your next run.
Does the increase affect casual employees and juniors?
Yes. The casual minimum wage 2026 rate, including the standard 25 per cent casual loading, rises to $33.05 per hour under the National Minimum Wage order.
Junior employees, apprentices, and trainees are also affected, though their rates are typically calculated as an age-based percentage of the adult rate or set out separately within the relevant award. If you employ any of these groups, don’t assume last year’s percentage scale still applies without checking the updated figures.
Do enterprise agreements need to be reviewed too?
Often, yes. An enterprise agreement’s base pay rate can’t legally fall below the base rate in the relevant modern award. If your award rates have increased and your enterprise agreement rates haven’t kept pace, there’s a real risk your agreement rates now sit below the legal minimum.
This is worth checking even if you assumed your enterprise agreement was “set and forget.” A quick comparison against the updated award rates avoids an unpleasant surprise at your next payroll reconciliation.
What happens if I don't update pay rates in time?
Underpaying employees, even unintentionally, creates a Fair Work compliance issue. Businesses that miss the update may need to back-pay affected staff, and repeated or systemic underpayments can attract closer scrutiny from the Fair Work Ombudsman.
Beyond the legal risk, incorrect rates flow through to your PAYG withholding, superannuation contributions, and BAS reporting, all of which then need correcting alongside the wage adjustment. Getting the rate right the first time is far less work than fixing it after the fact.
This is exactly the kind of detail that’s easy to miss when you’re juggling EOFY reporting, instant asset write-off decisions, and everyday operations at the same time. Reviewing pay rates as a standalone task, rather than folding it into general EOFY admin, helps make sure it doesn’t get lost.
In Conclusion
Reviewing pay rates against the new financial year is just one part of getting payroll right from 1 July. If you’d rather have this checked for you rather than cross-referencing awards line by line, Befree’s Payroll Services can help make sure your rates, classifications, and reporting are all aligned before your next pay run.
FAQs
Is the Australian minimum wage increase automatic, or do I need to update payroll manually?
Does this increase apply to award-free employees?
What's the difference between the National Minimum Wage and award wages?
Where can I check the correct new rate for my industry?
The Fair Work Ombudsman’s Pay and Conditions Tool is the most reliable source for checking the exact rate for your award and classification. For the full Fair Work Commission decision, see the Annual Wage Review 2026.