The Fair Work Commission has handed down its 2026 Annual Wage Review decision, awarding a 4.75% increase to minimum award wages and a 6% increase to the National Minimum Wage from 1 July 2026.

While any increase in labour costs will be significant for some employers, the decision was notably more restrained than many unions had sought.

The decision

The Fair Work Commission’s Expert Panel described the current economic environment as ‘uncertain’ and said it had ‘regrettably’ concluded that a larger increase would not be ‘practicable or responsible’.

As a result:

• Modern award minimum wages will increase by 4.75%
• The benchmark C10 manufacturing classification will increase from $28.12 per hour to $29.45 per hour
• The National Minimum Wage will increase by 6%, rising from $24.95 per hour to $26.44 per hour

The higher percentage increase to the National Minimum Wage reflects the Commission’s decision to move the benchmark from the C13 classification level to the higher C12 classification level.

What should employers do now?

With the increases taking effect from 1 July 2026, employers should:

• Review payroll systems and award classifications
• Update rates in employment contracts and payroll software where necessary
• Consider the impact on labour budgets and workforce planning
• Review annualised salary arrangements to ensure employees remain better off each pay period
• Communicate any changes clearly to managers and employees

While the increase is below current inflation levels, it will still represent a significant cost increase for many award-reliant industries, particularly hospitality, retail, aged care, community services and manufacturing.

How Winter Workplace Consulting Can Help

Winter Workplace Consulting assists employers with award compliance, annualised salary reviews, payroll audits, employment contracts and workforce planning. If you would like support understanding how the Annual Wage Review affects your organisation, we’d be happy to help.