The Fair Work Commission (FWC) has increased the minimum wage by 5.97%, and award wages by 4.75%.
It means the hourly rate for the minimum wage and the lowest award wage will be $26.44 from 1 July.
Around 1% of workers receive the actual minimum wage, while more than 20% of Australians receive award wages.
Unions welcomed the decision, while Shadow Finance Minister Jane Hume called it “little comfort”.
Here’s what you need to know.
Wage review
Every year, the FWC – 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.
Increase
On Tuesday, the FWC announced an increase of 4.75% to the minimum and award wages, or $26.44. In 2025, the wage increased by 3.5%.
The current rate of inflation is 4.2%.
The lowest wage a person over 21 can be paid under the award system is now $25.74, if they are in their first six months at an entry-level job.
Your contribution ensures The Daily Aus can continue doing the work you love.
I want to give $10 monthly to help TDA keep doing the news.
Your account details:
For those under 21, junior rates will apply, though the FWC has ordered they be phased out for workers in the fast food and retail industries over the coming years.
Australia’s new minimum wage rates (from 1 July):
Hourly: $26.44
Weekly: $1,004.90
Annual: $52,254.80
Reasoning
The FWC said this review was “particularly challenging,” noting an unexpected rise in inflation in late 2025, as well as economic uncertainty from the conflict in the Middle East.
While the growth of impacted wages is currently above the rate of inflation, the FWC noted forecasts that inflation will continue to increase this year.
The FWC said this meant that, “regrettably”, it could not give people “reliant on modern award wage rates” an increase “that would be sufficient to close the real wage gap entirely”.
Reactions
The Australian Council of Trade Unions (ACTU) called for a 6% increase in wages before the decision.
ACTU Secretary Sally McManus welcomed the decision, calling it a “positive real wage increase” that “will provide some buffer against the worst impacts” of the Middle East conflict.
The Opposition said the increase would not be enough to counter inflation.
“There is little comfort in a wage increase if Labor’s inflation simply eats it away,” Shadow Finance Minister Jane Hume said.
