Wage Increases Are Coming — Here’s What You Need to Know Before 1 July

Jenni Watson
4 days ago
2 min read

The Fair Work Commission has just handed down its Annual Wage Review decision for 2025 — and if you’re an employer, this is one you need to be across.

From 1 July 2025, the National Minimum Wage and all modern award rates will increase by 3.5%.

If you’ve got employees covered by a modern award — or even if you operate under an enterprise agreement — this could impact you. And don’t forget about salaried employees either… keep reading.

🔍 Why the Increase?

Over the past few years, wages for award-reliant workers haven’t kept up with inflation. Since 2021, rising costs have squeezed living standards for many of Australia’s lower-paid employees.

With inflation now settling back into the Reserve Bank’s target range, the Commission is using this wage increase to help restore some of the ground lost — while keeping it sustainable for businesses as the economy continues to steady.

🛑 What Does This Mean for Your Business?

If you pay staff under a modern award, you’ll need to:

Review pay classifications and rates
Update your payroll systems
Amend contracts where needed
Communicate changes to your team
Budget for the increase

Got an enterprise agreement (EA)? Even with an EA in place, you’re legally required to ensure your base rates don’t drop below the new award minimums once they kick in. It’s a compliance step that gets missed more often than you’d think — but it can carry serious consequences if left unchecked.

What about salaried employees? If you have salaried staff, it’s crucial you undertake a regular Better Off Overall Test (BOOT) to make sure their total salary still leaves them better off than if they were paid strictly under the award — especially with new rates coming in. A salary isn’t a set-and-forget arrangement.