The 2026 Annual Wage Review Is Underway and Unions Are Pushing for 5 Percent — Here Is What It Could Mean for Your Pay From July

Introduction

If you earn the national minimum wage of $24.95 per hour, a 5% increase would put an extra $47.40 in your pocket every week before tax. That is the figure at the centre of Australia’s 2026 Annual Wage Review, and for millions of workers on minimum and award wages, the outcome of this review will determine what lands in their bank accounts from 1 July.

The review is not happening in isolation. A landmark decision on junior pay rates, a potential phase-out of the lowest minimum classification, and union submissions calling for the biggest increase in years are all converging at the same time. Here is what you need to know and what you can do right now to make sure you are prepared.

What Is the Annual Wage Review?

Every year, the Fair Work Commission conducts a review of the national minimum wage and modern award minimum wages. The FWC considers economic data, submissions from unions and employer groups, and the needs of low-paid workers before handing down a decision that affects millions of Australians.

The 2026 review is currently underway. Submissions closed in April, hearings are scheduled for May, and the decision is expected in June. Any wage increases will take effect on 1 July 2026.

For context, the current national minimum wage sits at $24.95 per hour, or $948.10 per week for a full-time 38-hour week. Casual workers receive a 25% loading on top of that base rate.

The 5% Push: What Unions Are Asking For

The Australian Council of Trade Unions (ACTU) and the Shop, Distributive and Allied Employees’ Association (SDA) have both filed submissions calling for a 5% increase to minimum and award wages.

If granted, here is what that looks like in practical terms:

1. National minimum wage would rise from $24.95 to approximately $26.20 per hour
2. Weekly full-time pay would increase from $948.10 to approximately $995.50 per week
3. Annual increase of roughly $2,470 for a full-time minimum wage worker
4. Casual workers would see their loaded rate rise from approximately $31.19 to $32.75 per hour (base plus 25% loading)
5. Award wages across all modern awards would receive the same percentage lift, affecting classification rates at every level

The ACTU argues that real wages have not kept pace with the cost of living, while the SDA’s submission focuses specifically on retail, fast food, and pharmacy workers, noting that these industries employ some of Australia’s lowest-paid workforce.

The FWC does not always grant the full amount requested. In recent years, the Commission has balanced union claims against employer submissions and broader economic conditions. But the 5% figure sets the upper bound of what is being considered.

The Bonus: Phasing Out the Lowest Minimum Rate

Beyond the headline wage increase, the FWC is also considering a structural change that could deliver an additional pay rise for approximately 200,000 workers.

As reported by the Australian Financial Review, the Commission has flagged the possibility of phasing out the lowest minimum classification rate, known as the C14 rate. Workers currently on this classification would move up to the next level, resulting in an estimated 3.6% increase on top of whatever general wage increase is awarded.

For a worker on the C14 rate, this could mean a combined increase of more than 8% if the 5% general increase is also granted. That would represent the largest single-year pay adjustment many of these workers have ever received.

The C14 rate has long been criticised as being too low to reflect the actual skill requirements of the roles it covers. Phasing it out would simplify the classification structure and lift the floor for the lowest-paid award workers.

Junior Rates Abolished: The Landmark Decision

On 31 March 2026, the Fair Work Commission handed down a decision that will reshape pay for young workers in three of Australia’s largest employment sectors.

The decision affects junior pay rates under three awards:

1. General Retail Industry Award (retail workers)
2. Fast Food Industry Award (fast food and takeaway workers)
3. Pharmacy Industry Award (pharmacy assistants and retail staff)

Currently, 18-year-old workers under these awards are paid just 70% of the adult rate for the same work. Under the FWC’s decision, junior rates for workers aged 18 to 20 will increase by 5 percentage points per year until they reach full adult parity in 2029. The phase-in begins in December 2026.

An estimated 500,000 young workers are affected across the three industries. For an 18-year-old retail worker currently earning 70% of the adult rate, each annual 5-percentage-point step means hundreds of dollars more per year.

What This Means for Your Pay

If you are covered by a modern award or earn the national minimum wage, the outcome of the 2026 Annual Wage Review will directly affect your pay from 1 July. Here are the scenarios to prepare for:

1. Minimum wage workers: A 5% increase would add approximately $47.40 per week to your pre-tax pay
2. Award workers above minimum: Your classification rate will increase by whatever percentage the FWC determines, applied to your current rate
3. C14 classification workers: You could receive both the general increase and the additional 3.6% from reclassification
4. Young workers aged 18-20 in retail, fast food, or pharmacy: Your junior rate percentage will begin increasing from December 2026, separate from the July wage review outcome
5. Casual workers: Any increase applies to your base rate before the 25% casual loading is calculated, meaning your total hourly rate increases by more than the base adjustment

Employers are required to implement the new rates from the effective date. You should not need to ask for the increase; it should appear on your payslip automatically. If it does not, that is a compliance issue you can raise.

How to Check Your Award Classification Now

Do not wait until July to find out where you stand. These steps take less than 15 minutes and will give you a clear baseline:

1. Find your award. Check your employment contract or payslip for the name of the modern award that covers your role. If you are unsure, use the Fair Work Ombudsman’s Find My Award tool at fairwork.gov.au.
2. Identify your classification level. Your award will list classification levels with descriptions of the duties and responsibilities at each level. Match your actual duties to the correct level.
3. Check your current rate. Compare the rate on your payslip against the minimum rate for your classification on the FWC’s pay guide for your award.
4. Verify penalty rates and loadings. If you work weekends, public holidays, evenings, or overtime, confirm that the correct penalty rates are being applied.
5. Review your superannuation. Log into myGov and check your ATO-linked super account to verify that contributions are being paid at the correct rate of 11.5% of ordinary time earnings.
6. Keep records. Save your current payslips, rosters, and this article. When the new rates take effect in July, you will have a clear comparison point.

Pro Tip: If your payslip does not separately itemise your base rate, penalty rates, overtime, and allowances, that itself may indicate a compliance gap worth investigating.

What to Watch for When Rates Change on 1 July

The FWC typically publishes its decision in June, with new rates taking effect on the first full pay period on or after 1 July. Here is what to look out for:

1. Your first payslip after 1 July. Compare your hourly rate against the new minimum for your classification. The Fair Work Ombudsman publishes updated pay guides within days of the FWC decision.
2. Back-pay obligations. If your employer does not update your rate from the effective date, you may be entitled to back-pay for the gap period.
3. Classification changes. If the C14 rate is phased out, check whether your classification has been updated and whether the higher rate is reflected.
4. Casual loading calculations. Ensure your 25% casual loading is calculated on the new base rate, not the old one.
5. Super contributions. With Payday Super starting 1 July 2026, employers will be required to pay superannuation at the same time as wages. Verify your super arrives with each pay cycle, not quarterly.

Take Control of Your Pay

The 2026 Annual Wage Review has the potential to deliver the most significant pay changes in years. Between the union push for 5%, the possible phase-out of the lowest classification rate, and the junior rates decision, millions of Australian workers stand to benefit.

But knowing your entitlements starts now, with understanding your award, your classification, and your current rate.

Your pay matters. Check it today.

Start Your Free Audit with Justiico and compare your payslips against your award entitlements in minutes.