1 July 2025 – Annual Wage Review

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The Fair Work Commission has handed down its annual decision on increases to the national minimum wage, which applies to employees not covered by a modern award or enterprise agreement, and minimum wages under all modern awards.

The Commission’s decision to increase the national minimum wage and the minimum wage rates under all modern awards by 3.5% represents a middle ground between the 4.5% sought by the ACTU in the submission process and the 2.5 – 2.6% sought by employer groups.

Increases

In summary, from the first full pay period commencing on or after 1 July 2025:

  • the national minimum wage will increase by 3.5% to $948.00 per week or $24.95 per hour (FT/PT);

  • The national minimum wage for casuals will increase to $31.19 per hour (i.e. with 25% casual loading); and

  • minimum wage rates in modern awards will increase by 3.5%.

All wage related allowances will also be increased in line with the decision and expense related allowances may also be adjusted (albeit using a different methodology).

We expect draft determinations outlining the impact of the decision on award wage rates and allowances will be published by the Commission in the next couple of weeks and finalised thereafter.

Pre 1 July

Prior to 1 July 2025, we recommend you:

  • review applicable awards and adjust wage rates for award covered employees paid in line with the applicable award as necessary (and ensure all non-award employees are paid at least the national minimum wage);

  • review applicable enterprise agreements and ensure any wage increase mechanism/s tied to the minimum wage increase are complied with and rates/salaries are increased accordingly;

  • review/update all Individual Flexibility Agreements and Annualised Wage Schedules/Agreements to reflect the new applicable award rates and ensure any required increases are passed on to relevant employees accordingly, and

  • consider the impact of the increase to the minimum superannuation guarantee (SG) rate, which will apply in addition to the minimum wages increases above. For FY25-26, the SG rate will increase from 11.5% to 12% and the maximum contribution base will also increase. We note that the upcoming increase to 12% from 1 July 2025 is the final planned increase to the SG rate under section 19 of the Superannuation Guarantee (Administration) Act 1992 (Cth).

The above steps are especially critical given the recent commencement of new laws criminalising wage theft, which were introduced under the Labor Government’s Closing Loopholes legislation with effect from 1 January 2025.

High Income Threshold

Finally, we note the high income threshold will also increase from 1 July 2025. This will have a corresponding impact on the compensation limit for unfair dismissal claims (and any high income guarantees that are in place). We will provide a further update on this, once the new amount is confirmed

What’s to come?

Looking ahead, the Commission:

  • confirmed that it will continue to proactively address gender- based undervaluation and given 69.7% of modern award-reliant professionals are female, it will shortly initiate proceedings to address professional classifications in modern awards (including the Professional Employees Award 2020, the Animal Care and Veterinary Services Award 2020, the Legal Services Award 2020 and the Broadcasting and Recorded Entertainment Award 2020); and

  • noted the phasing out of the C13 rate as an issue for consideration in the 2026 Annual Wage Review, having regard to the need to “fully correct for the reduction in real wages which modern award-reliant workers have suffered over the past four years”. 

Not sure what to do or like some help? 

The Workplace can assist with understanding the impact of the National Minium Wage Decision on your business and/or reviewing/drafting any relevant documentation.

Please give us a call on 02 8999 3300 or email hannah@theworkplace.com.au or alina@theworkplace.com.au for assistance.

The copyright in this blog is owned by The Workplace – Employment Lawyers Pty Ltd.  The content is general information only and is not intended to constitute, or be relied upon as, legal advice.  The use of this blog by any person or company does not create any solicitor-client relationship between the person or company and The Workplace – Employment Lawyers Pty Ltd.