The minimum wage will increase by 3.5% from 1 July, in a decision handed down by the Fair Work Commission (FWC).
The current hourly minimum wage for adults over 21 will increase from $24.10 to $24.95.
While few people (roughly 1%) are paid this actual minimum wage, the decision flows through to other industry awards, impacting around 3 million workers in Australia.
Here’s what you need to know.
Wage review
Every year, the Fair Work Commission – the national workplace watchdog – reviews minimum wages.
It’s also responsible for reviewing awards, which set out industry-based conditions and pay entitlements. Around one in five workers are covered by an award.
Industry bodies, unions, the government and opposition all put forward their suggestions for the minimum wage review in the lead-up to today’s decision.
Today's decision
The Fair Work Commission chose to increase the minimum wage by 3.5%, slightly lower than last year’s increase of 3.75%.
This is in part because the rate of inflation (rising prices) is slowing. The latest quarterly inflation figures show prices rose 2.4% in the year to March 2025 (down from 3.6% in 2024).
The minimum wage increase will mostly impact workers covered by healthcare, hospitality, retail, and social services awards, who the FWC noted are “disproportionately female”.
Australia’s new minimum wage rates (from 1 July):
Hourly: $24.95
Weekly: $948.00
Annual: $49,296.00
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Economy
The FWC noted high inflation over recent years directly hit workers’ wages. It said a 3.5% pay rise is “sustainable”.
It added “the uncertainty caused by changing U.S. trade policies” contributed to its decision.
The Trump administration has hit all of its trading partners with taxes on goods they exports to the U.S.
Australia is bracing for the impact of 50% tariffs on steel and aluminium exports, in addition to a 10% tariff on all other exports.
Union response
Australian Council of Trade Unions Secretary Sally McManus welcomed the FWC decision, after pushing for a 4.5% increase.
She said that the decision will mean minimum wages will outpace inflation, ensuring working people “are getting ahead”.
“It was time for low-wage workers, award workers, to start catching up for what was lost during the inflation spike,” McManus told reporters.
Industry groups
Key business group the Australian Chamber of Commerce and Industry (ACCI), described the FWC decision as “generous to employees”.
ACCI chief Andrew Mackellar said: “For many of the most vulnerable businesses, particularly small businesses in retail and hospitality, this increase will be very challenging to afford.“
The industry body said business profits are “contracting” and investment is “falling”.
Political response
Employment Minister Amanda Rishworth welcomed the FWC decision, noting the Government had pushed for a “real wage increase” — when wages increase by more than the rate of inflation. This decision is a real wage increase of 1.1%.
In a post on social media, Shadow Employment Minister Tim Wilson said the increase “is important to low paid workers,” while noting it’s “another expense employers... will have to deal with.”
