National Wage Review 2026

The Fair Work Commission has released the 2026 National Wage Review decision.

Modern Award minimum wages will increase by 4.75%.

The National Minimum Wage will increase by about 6% to $26.44 per hour, or $1,004.90 per week. This is the first time the weekly minimum wage has gone over $1,000.

The increases apply from the first full pay period on or after 1 July 2026.

Why are there two different numbers?

The Commission has decided to phase out the lowest Modern Award rate for ongoing employment (known as the C13 rate). Over three stages it will be lifted to the next rate up (the C12 rate).

The first stage happens this year. It adds about 1.2% on top of the 4.75%. The National Minimum Wage moves with it, which is why it goes up by about 6% and not 4.75%.

What does this mean for Employers?

• If your employees are engaged in accordance with a Modern Award, the minimum rates of pay will receive an increase of 4.75%. If you have employees on the lowest classifications in an award, check the new pay guide. Those rates may increase by MORE than 4.75%.
• If your employees are not covered by a Modern Award, you will need to pay them at least the new minimum wage of $26.44 per hour.
• If your employees are covered by an Enterprise Agreement in which wages increase by the percentage increase awarded ‘by the National Wage Review’, check the wording of the clause. This year the increase to Modern Awards (4.75%) and the increase to the National Minimum Wage (about 6%) are different. The increase will apply from the first full pay period on or after 1 July 2026 or from the specified date in the Enterprise Agreement.
• If your employees are covered by an Enterprise Agreement in which wages increase by a dollar amount or a prescribed percentage increase (e.g., 4.0%), the decision will have no impact unless the base wage rates of the Enterprise Agreement are less than those of the equivalent classifications in the Modern Award. Under the Fair Work Act, the base wage rates of an Enterprise Agreement must be at least equal to those under the Modern Award. With an increase of 4.75%, this is MORE likely to be an issue this year. Check your rates.
• If you are paying wages sufficiently in excess of the minimum wages of a Modern Award or Enterprise Agreement, the increase may be absorbed within existing wage rates, subject to any contractual obligations.
• If you pay an annual salary that is intended to cover award entitlements, re-check it against the new rates. See our article on the Coles and Woolworths decision.

What should you do before 1 July?

• Update your payroll system with the new rates.
• Check your Enterprise Agreement rates against the new Modern Award rates.
• Check your contracts for employees paid above the award. Can the increase be absorbed?
• Budget for it. This is a bigger increase than last year (3.50%).

Getting this wrong is an underpayment. See our article on the Wage Compliance Code and the criminal wage theft laws.

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Ross

Legal Practice Director, Drayton’s Law