FWC Increase 2026

FWC approved a:

• 4.75% increase in most Award rates; and

• 5.97% increase to the National Minimum Wage (NMW)

which takes effect from the first full pay period after 1 July 2026.

The decision will lift the:

• entry level Award rate (ie must be no more than the first six months of employment) to $25.74 per hour or $978.10 per 38 hour week;

• lowest (non-entry level) Award rate to $26.44 an hour or $1004.90 per 38 hour week; and

• NMW to $26.44 an hour or $1004.90 per 38 hour week.

The decision also creates:

• two special NMW rates for award/agreement free employees with a disability; and

• wage provisions for award/agreement free junior employees based on the percentages for juniors in the Miscellaneous Award 2020.

Our Take

This amount was well above range expected by most independent commentators. With inflation tracking at around 4.2% annually and ongoing concerns regarding the cost of living crisis, we considered anything in the low 4% was more realistic given that the employer groups sought around 3.9% and Unions sought 6%.

FWC noted that this decision was particularly difficult, with considerations of a changing economic environment in the second half of the year punctuated by higher inflation and the middle east conflict. There is no productivity requirement or trade-off, because FWC noted that Award-reliant employees are still in the position where their wage rates, in real terms, remain lower than what they were in July 2021.

Employers will need to budget for the increases and then implement their own productivity and efficiency offsets.

Action Items

• Update applicable Award rates and NMW. (*NB there is structural adjustment with the C13 level being phased out over 3 phases and C12 becoming the lower wage rate for ongoing employment – so there are some slight variations to accommodate this with the increase more like 6% – check the official Award for details)

• Check your EAs for clauses that use this decision to provide for EA increases and apply

• Focus on genuine productivity and efficiency strategies before taking knee-jerk reactions to restructure

How does the recent FWC increase apply to above Award/EA and/or all-inclusive salaries?

It depends on the employment contract/EA. For this reason, the outcome may vary for individuals – so check your documents carefully!

What opportunities are there to provide above Award/EA and/or all-inclusive salaries?

Special conditions apply in each workplace. The following methods worth considering and taking advice on are (including our strong recommendation to continue to appropriately monitor time records):

1. Annualised Wage Arrangements – Strict compliance with the applicable Award conditions is required which includes a formal time keeping and annual reconciliation process.

2. Individual Flexibility Arrangements – Strict compliance with the applicable Award and FW Act conditions is required. This can include non-financial considerations.

3. EA arrangements – where EA clauses continue to have satisfied the BOOT (even the new ‘moving BOOT’) and the applicable base rate in the EA is not less the applicable base rate in the Award as amended.

4. Common Law Contracts – Providing remuneration or benefits that exceed the employee's minimum entitlements with express terms that specifically identifies and allows the excess amount(s) to be set off against the employer's liability to pay the minimum entitlement(s) (eg the excess is for overtime or penalty rates).

Who does the FWC increase need to be applied to?

The FWC increase will generally only apply to above Award / NMW or all-inclusive salaries if:

• there are express terms in an employment contract promising to do so (e.g. remuneration plus applicable FWC increase each year or similar); and/or

• the Employee’s base rate of pay falls below the applicable minimum (also known as a s.206 breach). That is, the base rate of pay payable must not be less than the base rate of pay that would have been payable to the employee under the applicable Award or National Minimum Wage.

Is 1 July 2026 a strict compliance date for the recent FWC increase?

No. The FWC increase (if applicable) is payable on the “first full pay period” after 1 July 2026. This means that the FWC increase will be implemented differently for each Employer depending on their usual ‘pay day’.

Pay periods can, depending on their applicable Award/EA and/or Contracts of Employment, be weekly, fortnightly or monthly. These are usually expressly defined and cannot be unilaterally changed without sufficient notice.

The following examples to illustrate the range of applications. Please check you workplace’s specific pay dates for clarification.

• If the pay period is weekly Monday to Sunday the first full pay period after 1 July 2026 will be the pay period from 6 July to 12 July 2026.

• If the pay period is weekly Thursday to Wednesday the first full pay period after 1 July 2026 will be the pay period from 9 July to 15 July 2026.

• If the pay period is fortnightly and started on 24 June 2026 the first full pay period after 1 July 2026 will be the pay period starting on 9 July 2026.

Edge Legal

Relationships. Respect. Results