The 2026 Minimum Wage Review Is Underway: What 2.7 Million Workers Need to Know Before July 1

Right now, the Fair Work Commission is deciding how much your pay will be worth from 1 July 2026. The gap between the two main proposals is $0.61 per hour. The ACTU is arguing for a $1.21 per hour raise; employer groups are arguing for $0.60 per hour. Over a standard 38-hour week, the difference between those two scenarios is roughly $23 per week. For 2.7 million workers on award wages, the outcome of these hearings directly sets the floor beneath their income.

Here is what is happening, who is arguing what, and what you can do before the decision lands in June.

What Is the Annual Wage Review?

Each year, the Fair Work Commission conducts an Annual Wage Review to assess whether the national minimum wage and Modern Award minimum rates need to be adjusted. The review considers economic data, inflation, productivity, employment conditions, and submissions from the government, unions, and employer groups.

The process runs on a fixed timeline:

Submissions open in late 2025 through to April 2026
Hearings run through April and May 2026
The Fair Work Commission issues its decision in June 2026
New rates take effect from the first full pay period on or after 1 July 2026

The national minimum wage currently sits at $24.10 per hour ($915.90 per week based on a 38-hour week). Modern Award minimum rates follow the same adjustment pattern, though specific rates vary by industry and classification level.

Who Is Asking for What?

Three main voices are shaping the 2026 review. Their positions are meaningfully different.

The ACTU: 5% Increase

The Australian Council of Trade Unions (ACTU) has submitted a claim for a 5% increase, which would lift the national minimum wage to approximately $25.31 per hour ($963.70 per week). The ACTU argues that a 5% rise is necessary to ensure low-wage workers are not left behind by ongoing cost-of-living pressures, and that recent wage increases in other parts of the economy mean the minimum wage is falling further behind in relative terms.

The ACTU’s case centres on the view that real wages for award-reliant workers have gone backwards in recent years, and that a meaningful increase is required to restore purchasing power.

Employer Groups: 2.5-3% Increase

The Australian Industry Group (Ai Group) and the Housing Industry Association (HIA) have submitted that the increase should be limited to the range of 2.5 to 3 percent. At 2.5%, the national minimum wage would rise to approximately $24.70 per hour ($939.00 per week). At 3%, it would reach approximately $24.82 per hour ($943.00 per week).

Employer groups argue that larger increases would add unsustainable cost pressure to businesses, particularly small and medium enterprises in sectors like hospitality, retail, and construction, where labour costs represent a significant share of operating expenses.

The Government: Above Inflation

The Australian Government, through the Department of Employment and Workplace Relations, has submitted that the Commission should award an increase above the current rate of inflation. While the government’s submission does not nominate a specific percentage, it signals support for a real wage increase rather than simply maintaining purchasing power. The government’s submission references the need to keep low-paid workers connected to broader living standards improvements.

What Does Each Scenario Mean in Dollars?

The difference between proposals may seem abstract until you translate it into what workers actually take home. These figures are based on a standard 38-hour full-time week.

Scenario	Hourly Rate	Weekly Pay	Annual Pay
Current rate (2025-26)	$24.10	$915.90	$47,626.80
Employer minimum (2.5%)	$24.70	$938.60	$48,807.20
Government signal (3.5% est.)	$24.95	$948.10	$49,300.20
ACTU claim (5%)	$25.31	$961.70	$50,008.40

The difference between the two proposals is $0.61 per hour, or roughly $23 per week. Put another way, the ACTU claims a $1.21 per hour raise on the current rate; employer groups argue for $0.60 per hour. For a hospitality worker on split shifts, a retail worker covering weekends, or a disability support worker on a rotating roster, that gap matters.

Modern Award minimum rates move in line with the national minimum wage adjustment, so the percentage increase applied to the national rate flows through to the rates for specific classifications under each Award. The actual dollar impact depends on which Award covers your role and which classification level applies to you.

Which Industries Are Most Directly Affected?

The 2.7 million workers directly reliant on award wages are concentrated in several sectors. Here is how the review plays out differently depending on where you work.

Retail

Workers covered by the General Retail Industry Award 2020 will see all minimum rates adjusted. Casual loading, penalty rates for evenings and Sundays, and base rates all sit as multiples of the Award minimum. A 5% rise lifts the floor and, with it, all the penalty rate calculations above it.

Hospitality

The Hospitality Industry (General) Award 2020 covers a large proportion of cafe, restaurant, bar, and accommodation workers. These workers often work weekends and late nights, where penalty rates significantly amplify the base wage. A higher base rate means higher penalty rate calculations.

Healthcare and Aged Care

Workers under the Health Professionals and Support Services Award and Social, Community, Home Care and Disability Services Industry Award are among those affected. Given ongoing cost-of-living pressures in these sectors, a stronger minimum wage outcome supports retention of workers in roles that are already hard to fill.

Construction and Trades

The Building and Construction General On-site Award and related instruments cover many entry-level and labouring roles. Lower minimum wages in construction tend to compress wages across the tier, so the floor has an outsized effect on total sector pay.

Workers on Enterprise Agreements and Individual Contracts

The Annual Wage Review directly sets rates for workers on the national minimum wage or Modern Award minimum rates. If you are on an Enterprise Agreement (EA) or individual contract, the review does not automatically change your pay. However, it does two important things:

First, it sets the benchmark below which your EA or contract cannot legally fall. Modern Awards underpin EAs, and EAs must leave workers “better off overall” compared to the Award.

Second, it often prompts enterprise bargaining. When the Award floor rises, the gap between Award minimums and EA rates may narrow, which can be a trigger for renegotiation.

If you are on an EA or individual contract and unsure whether your rates are above the Award minimum for your classification, this review period is a useful moment to check.

What Should You Do Before July 1?

The decision arrives in June. There are five things worth doing before then.

Find out which Award covers your role. The Fair Work Commission’s award finder at fairwork.gov.au can identify the relevant Modern Award based on your industry and job type. The Award minimum for your classification level is the legal floor for your pay.
Check your current hourly rate against the current minimum. If your rate is at or very close to the current minimum of $24.10 per hour, a July 1 adjustment will apply automatically. If you are paid by a direct employer, this should happen without you needing to do anything. But errors happen.
Note your pay rate before July 1. Keep a record of your rate as at June 30, 2026. After the new rates take effect, check your payslip to confirm the increase was applied correctly and that your rate now matches the new Award minimum for your classification.
If you are casual, check your loading. Casual workers receive a loading on top of the base rate, typically 25%. A rise in the base rate should flow through proportionally to your casual rate. If it does not, that is a shortfall worth investigating.
If you are on an EA, confirm your rates are still above the new Award minimum. After July 1, if your EA rates are below the new Award minimums, your employer is required to supplement your pay to bring it up to at least the Award rate. This does not always happen automatically.

Check Your Pay Now to see how your current pay compares to the Award minimum for your classification, before the new rates take effect.

What Happens Next?

The Fair Work Commission will hold hearings through April and May 2026. Both parties will present evidence and expert submissions. The Commission will then deliberate and issue its decision, typically in mid-to-late June, in time for the July 1 effective date.

The Commission is not bound by any single submission. In recent years, decisions have landed between the employer and union positions, though they have leaned closer to union claims when inflation and cost-of-living data have supported it.

The 2025 decision awarded a 3.75% increase, which lifted the minimum wage from $23.23 to $24.10. Whether 2026 lands closer to the government’s above-inflation signal, the employer ceiling of 3%, or the ACTU’s 5% claim will depend on how the Commission weighs economic conditions over the next two months.

Whatever the outcome, 2.7 million workers will feel it from their first pay in July.

Know Your Worth

The Annual Wage Review is the mechanism that ensures Australian workers on award wages do not fall permanently behind. But the review only helps you if the right rates are actually applied to your pay. Errors, delays, and misclassifications mean some workers miss out on increases they are legally owed.

The best protection is to know your rate, know your Award, and check your payslip when the new rates take effect.

Start Your Free Audit to understand your Award classification and see whether your current pay is where it should be.