The 2026 Wage Increase: What Changed on 1 July and What to Check in Your Payroll

The pay rise landed on 1 July 2026, and if you employ staff, you've likely updated your payroll and moved on. It's worth a second look, because “the increase” is two different numbers, and which one applies depends on how each person is paid.

The Fair Work Commission lifted modern award minimum rates by 4.75% and the national minimum wage by close to 6%, both from the first full pay period starting on or after 1 July 2026. Payroll software will have updated the headline rates, but a few things still need a human eye.

Which increase applies to your staff

It's easy to read a single percentage in the news and assume it applies to everyone. It doesn't.

• Employees covered by a modern award had their minimum rates increased by 4.75%. This covers most award-reliant staff.

• Employees on the national minimum wage, meaning they aren't covered by an award or enterprise agreement, moved to $26.44 per hour, or $1,004.90 for a 38-hour week. That's a rise of close to 6% on the previous $24.95 an hour.

So, the first question is a simple one: is each of your employees on an award, an enterprise agreement, or the national minimum wage? The answer decides which increase applies and whether their current pay still sits above the new floor.

A small note for anyone paying the very lowest award classifications: the Commission made an extra adjustment to those, so a handful of classifications rose by more than 4.75%. If that could affect you, the relevant pay guide will show the exact figure.

If you're not sure which award covers a role, the Fair Work Ombudsman's Pay and Conditions Tool is the place to confirm it. Set the date to 1 July 2026 or later to see the current rates. For tricky coverage or classification questions, the Fair Work Ombudsman or an employment adviser can help.

When the new rates start

The increase applies from the first full pay period starting on or after 1 July 2026, not necessarily 1 July itself.

To put that in plain terms with an illustrative example: if your pay periods run fortnightly and one started on 29 June 2026, that period keeps the old rates, and the new rates apply from the next full period. A weekly or monthly cycle works the same way. The rate is set by the date the pay period starts. The day you actually run the pay doesn't change that.

If you've already processed a pay run at the old rate for a period that was meant to use the new one, it's fixable. You would pay the difference and keep a note of the correction.

What payroll software won't catch for you

Modern payroll systems update award rates for you, which handles most of the work. The gaps tend to sit in the places software can't see:

• Award classification. If an employee is linked to the wrong classification or level, the system will confidently pay the wrong rate. A rise is a good moment to confirm each person is mapped correctly.

• Manual or custom pay items. Any rate you've keyed in by hand, or a custom allowance, won't move on its own.

• Salaried and annualised staff. A salary that comfortably cleared the old award minimum might now sit closer to it. It's worth checking each salary still covers the award, including overtime and penalties where the arrangement relies on absorbing them.

• Fixed or recurring payments. Any set direct debit or standing amount will need the figure changed to the new rate.

  
  

A short mid-year payroll check

If you'd like a simple way to feel confident it has all landed, you might want to work through this:

1. Confirm which award or agreement covers each employee, or whether they're on the national minimum wage.

2. Check each employee's classification and level are mapped correctly in your payroll system.

3. Compare anyone on a salary or annualised rate against the new award minimum, including overtime and penalties.

4. Update any manual rates, custom pay items and fixed recurring payments.

5. Check your superannuation is calculating on the new, higher gross, and that it lands within the payday super timeframe.

6. Keep a short record of what you reviewed and any back payments you made.

   
   

Where this leaves you

Most of this is quick once you know the two increases are separate and which staff fall where. The value is in the checks around the edges: the classifications, the salaries sitting near the floor, and the payments that don't update themselves.

If we run your payroll, this is already sorted at our end. If you handle it yourself and would like a second set of eyes on how the new rates have flowed through, we're happy to take a look.

Disclaimer: This article is intended to provide general guidance and is not specific advice. We encourage you to seek tailored advice for your circumstances.