FWC Annual Wage Review 2026 Decision
The Fair Work Commission’s Expert Panel has awarded a 4.75% increase to the minimum wages in Modern Awards, subject to a higher increase for the lowest-paid C13 and C14 classifications as part of phasing out the C13 rate.
The National Minimum Wage will be increased to $1,004.90 per week or $26.44 per hour.
These increases will apply from the first full pay period commencing on or after 1 July 2026.
The first stage of phasing out the C13 classification as the lowest ongoing award rate involves the C13 rate increasing by an additional amount equal to one-third of the difference between the C13 and C12 rates. The C14 entry-level rate increasing by the same percentage to maintain relativity. In practical terms, this means the lowest ongoing modern award rate will become $1,004.90 per week or $26.44 per hour, and the lowest entry-level rate (for employment of no more than six months) will become $978.10 per week or $25.74 per hour from 1 July 2026.
The increase applies to minimum wages for all employees, including junior employees, trainees, apprentices, supported wages and piece rates that are contained in Modern Awards. Weekly wages will be rounded to the nearest 10 cents.
If an Enterprise Agreement applies to an employee that would otherwise be covered by a Modern Award, the employee’s base rate of pay under the Enterprise Agreement must not be less than the base rate of pay that would be payable under the Modern Award.
If an Enterprise Agreement applies to an employee and the employee is not covered by a Modern Award, then the employee’s base rate of pay under the Enterprise Agreement must not be less than the National Minimum Wage.
If no Enterprise Agreement or Modern Award applies to an employee, then the employee cannot be paid less than the National Minimum Wage.
What factors did the Panel consider?
The Panel said this year’s Review was particularly challenging because of the complex interaction of the statutory considerations it was required to balance.
Until February 2026, most indicators of economic and business performance in Australia were sound, including healthy economic growth, growth in jobs and hours worked, productivity, business profits and investment during 2025, while wages growth remained moderate and labour costs did not increase. However, in the latter half of 2025 stronger demand pushed inflation higher than expected and above the Reserve Bank’s target range. In response, the Reserve Bank increased interest rates in order to slow the economy.
The Panel also highlighted the added uncertainty caused by the Middle East conflict which disrupted oil supplies and accelerated inflation through higher fuel prices and flow on effects to a range of goods and services. Despite that uncertainty, the Reserve Bank and Budget forecasts to the end of 2026–27 have not substantially changed, and headline inflation is still projected to return to the target band of 2% to 3% by that time.
A central consideration in the Review was that most modern award-reliant employees remain worse off than they were before the pandemic. Although last year’s Review delivered a real wage increase and significantly narrowed the wage gap, the increase in inflation since then has widened the gap again. Based on current forecasts, a wage increase of well over 5% would now be required to fully restore real wages.
Balancing these considerations, the Panel concluded that it would not be practicable or responsible in the current circumstances to award a real wage increase sufficient to close the wage gap entirely. Instead, it determined that modern award-reliant employees should at least not be worse off in real terms than they were as at 1 July 2025, while also providing additional support to the lowest-paid workers.
The Panel indicated that approximately 21.1% of employees in Australia, or around 2.8 million employees, are paid in accordance with modern award minimum wage rates. Those employees are concentrated in four key sectors: accommodation and food services, health care and social assistance, retail trade, and administrative and support services.
Interested to learn more?
If you would like to talk to us about the possible impact the minimum wage increase could have on your organisation, please contact your usual Mapien consultant, or reach out to us below.