On 28 May 2026, the Fair Work Commission’s Expert Panel announced a 4.75% increase to the National Minimum Wage and most modern award wages, effective from 1 July 2026. For business owners with employees on or near minimum rates, this is the time to review your payroll costs and cashflow position before the increase takes effect.
The new rates
From 1 July 2026, the National Minimum Wage is:
- $1,004.90 per week, or
- $26.44 per hour (based on a 38-hour week)
For employees covered by a modern award, the Fair Work Commission applied a general 4.75% increase to minimum award wages. This takes effect from the first full pay period on or after 1 July 2026 — so depending on your pay cycle, the increase may not hit until mid-July.
Check the Fair Work Commission’s pay guides to confirm the updated rate for any awards that apply to your business.
The full payroll impact
The wage increase is the headline change, but a second shift compounds it from 1 July 2026:
Payday super begins. From 1 July 2026, super contributions must be paid on the same day as salary and wages — within 3 days of each payday. This changes cashflow timing for super, which was previously paid quarterly. If your bookkeeping isn’t set up to handle per-payday super, now is the time to address it. The SG rate remains at 12% (unchanged from 1 July 2025), but the timing obligation is new.
A worked example
If you employ 20 people on the National Minimum Wage, paid fortnightly:
| Before 1 July 2026 | From 1 July 2026 | |
|---|---|---|
| Fortnightly wages (20 staff) | $37,920 | $40,196 |
| Super at 12% | $4,550 | $4,824 |
| Total fortnightly labour cost | $42,470 | $45,020 |
That’s an increase of approximately $2,550 per fortnight — or around $66,300 per year — before any other on-costs. For businesses operating on thin margins, the compound effect of both changes is material.
What to do now
Review your payroll system. Confirm it is updated with the new minimum wage rates and the 12% SG rate from 1 July 2026. Most cloud payroll platforms (Xero, MYOB, KeyPay) update award rates automatically, but it’s worth verifying, particularly for businesses covered by multiple awards.
Model the cashflow impact. For labour-intensive businesses, the wage increase will affect cashflow across the full year. Understanding the quantum early allows you to adjust pricing, staffing mix, or other costs before the pressure builds.
Review award coverage. Not all employees are covered by the same award — or by the National Minimum Wage. If you have a mix of award and non-award employees, the effect will vary. Our business advisory team can help you map the full impact across your workforce.
Consider your pricing. If labour is a significant input cost, this is a reasonable trigger to review whether your pricing reflects your actual cost base. Many businesses in hospitality, retail, and trades find this a natural moment to adjust.
If you’d like help modelling the impact on your business’s cashflow and cost structure, our accounting team is available to work through it with you.