National Minimum Wage and Modern Award rates increase announced
The National Minimum Wage has also increased to $1,004.90 per week, or $26.44 per hour based on a 38-hour work week for full-time adult employee.
Annual Wage Review 2026 – What employers need to know
1. Award rates increase by 4.75%
Employers with Award-covered employees should ensure payroll systems and remuneration arrangements are updated from the relevant pay period commencing on or after 1 July 2026.
2. Some lowest-paid classifications have additional adjustments
The decision includes structural changes to the lowest Award classifications. Employers should therefore not simply apply a 4.75% increase to existing rates without checking the updated Award rates.
3. Enterprise Agreement rates should also be reviewed
The Annual Wage Review does not automatically increase Enterprise Agreement rates. However, under the Fair Work Act, an Enterprise Agreement base rate cannot be lower than the applicable Modern Award base rate. Employers should compare Agreement rates against the updated Award rates to identify any potential gaps.
4. Award compliance goes beyond minimum rates
Employers should also consider the impact on overtime, penalty rates, allowances, casual loadings and other Award-based entitlements.
5. Award coverage and classifications remain critical
Modern Award coverage is not optional. Employers should ensure they have correctly identified applicable Awards and that employees are appropriately classified based on the work they perform.
What should employers do now?
Employers should consider:
- confirming Modern Award coverage and employee classifications;
- updating 2026 Award rates in payroll systems;
- checking Enterprise Agreement rates against applicable Award rates;
- reviewing allowances, penalties and overtime rates; and
- assessing annualised salary and above-Award arrangements.
For employers with a significant Award-reliant workforce, the 2026 increase may have a material impact on labour costs and may also highlight previously unidentified compliance risks.
Our People & Organisation Advisory team can assist with Modern Award coverage, classification reviews and remuneration compliance assessments to help your business identify and address potential gaps. Connect with our experts via the form below or on:
| Melbourne | Sydney |
| +61 3 9252 0800 | +61 2 9922 1166 |
Author: Anthony Blaney
Updated: 14 August 2026
All rights reserved. This publication in whole or in part may not be reproduced, distributed or used in any manner whatsoever without the express prior and written consent of Forvis Mazars, except for the use of brief quotations in the press, in social media or in another communication tool, as long as Forvis Mazars and the source of the publication are duly mentioned. In all cases, Forvis Mazars’ intellectual property rights are protected and the Forvis Mazars Group shall not be liable for any use of this publication by third parties, either with or without Forvis Mazars’ prior authorisation. Also please note that this publication is intended to provide a general summary and should not be relied upon as a substitute for personal advice. Content is accurate as at the date published.