The Fair Work Commission has announced the outcome of its Annual Wage Review 2024–2025, confirming a 3.5% increase to both the National Minimum Wage and minimum award wages. The increase will take effect from the first full pay period on or after 1 July 2025.
This wage adjustment is aimed at supporting low-paid workers in keeping up with cost-of-living pressures while balancing the economic conditions impacting Australian businesses.
What’s Changing?
National Minimum Wage will rise by 3.5%. For a full-time employee (38 hours per week), this equates to an increase from the current $915.90 per week to approximately $948.96 per week, or $24.97 per hour (up from $24.10).
Award minimum wages across all modern awards will also increase by 3.5%. This includes sector-specific minimum pay rates, which are relevant to a large number of employees covered under awards.
The Fair Work Ombudsman will update pay guides shortly after the decision takes effect. Employers should use the updated pay guides to ensure compliance with the new rates.
What Business Owners Should Do Now
With only weeks to go before the change kicks in, now is the time to prepare:
✅ Review Employee Pay Rates
Check all employees’ current pay rates against the new minimum wage or applicable award rates. This is especially important if you have staff currently being paid at or near minimum wage levels.
✅ Update Payroll Systems
Make sure your payroll software or service provider is ready for the change. Automated systems may require manual confirmation or updates to reflect the new pay rates from 1 July.
✅ Budget for Increased Wage Costs
Factor the 3.5% increase into your payroll budget for the 2025–2026 financial year. The rise may also affect superannuation contributions, overtime, leave loading, and penalty rates.
✅ Communicate with Your Team
Be transparent with employees about any changes to their pay. Communicating proactively helps build trust and reduce confusion when payslips reflect the new amounts in July.
✅ Stay Compliant
Review relevant awards on the Fair Work Commission website and seek professional advice if you’re unsure about classification levels, allowances, or entitlements.
Looking Ahead
Wage reviews are part of a broader economic balancing act. The Fair Work Commission considers cost-of-living pressures, economic forecasts, business sustainability, and productivity when determining these increases.
While the wage rise supports employees during a period of rising expenses, it can present a challenge for small businesses already facing inflationary pressures. Proactive planning and reviewing your pricing, rostering, or resourcing strategy can help offset the impact.
If you need help preparing for the wage increase or want to ensure your payroll and compliance obligations are met, now’s a great time to speak with your accountant or business advisor.
Don’t let this increase impact your bottom line. Contact us to arrange a FREE Business Health Check to uncover your hidden cash flow levers.
Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.
