2026 Annual Wage Review: what changed on 1 July and what to check now
The decision
On 2 June 2026 the Fair Work Commission handed down its Annual Wage Review decision. From the first full pay period starting on or after 1 July 2026:
modern award minimum rates rose by 4.75%
the National Minimum Wage rose by 6%, to $26.44 an hour or $1,004.90 for a 38-hour week (up from $24.95 and $948.00)
The National Minimum Wage rose faster because the Commission has started phasing out the lowest award classification rates. In this first stage, the C13 and C14 rates rose a further 1.2% on top of the general increase. Over three stages, C12 becomes the minimum rate for ongoing employment.
For context, award rates rose 3.5% in 2025, 3.75% in 2024 and 5.75% in 2023.
It didn't arrive alone
Payday super also started on 1 July 2026, so superannuation is now paid with each pay run rather than quarterly. Some awards also carry separate phased increases from the Priority Awards Review, including for children's services employees and dental assistants. Check whether your award is one of them.
What to check in your payroll now
The rates actually changed. Compare each employee's base rate with the new award rate for their classification. If the update was missed in the July pay run, the shortfall has been building every pay since.
Allowances and penalties moved too. Many allowances are set as a percentage of a standard rate, and penalty and overtime rates are calculated on the new base.
Annualised salaries still cover the award. A salary that cleared the award last year with a small buffer may not clear it now. Run the reconciliation.
Junior, apprentice and trainee rates are percentages of adult rates and moved with them.
Enterprise agreements. If an agreement's base rate is now below the award rate for the same work, the employee must be paid at least the award rate.
Classifications are right. A wrong classification creates an underpayment that grows with every increase.
If you find a shortfall
Fix the rate going forward, calculate the back pay to the first full pay period on or after 1 July, and pay it with the next pay run. Keep a record of what you found and what you paid. Self-correcting early is treated very differently from an underpayment found by the Fair Work Ombudsman.
IndustrialHR reviews award rates, classifications and annualised salaries for employers. If you would like a second set of eyes on your July changes, book a consultation.
Related reading
IndustrialHR does not provide legal advice.
