Minimum Wage Review 2026: What to Expect from the Annual Wage Review
The Fair Work Commission's 2026 Annual Wage Review is underway. Here's the timeline, predicted increase, what unions and employers are arguing, and when it takes effect.
The Annual Wage Review process explained
Every year, the Fair Work Commission (FWC) conducts the Annual Wage Review — a comprehensive assessment that determines whether to increase the national minimum wage and modern award minimum wages. The review considers economic data, submissions from unions, employer groups, and the government, and the FWC's own assessment of the needs of the low-paid, the economy, business competitiveness, and employment growth. The Expert Panel of the FWC, chaired by the President, hears oral submissions in April and May and typically hands down its decision in early June, with the increase taking effect from the first full pay period on or after 1 July. The 2026 review is the ninth under the expanded framework introduced in 2022, where the FWC must also consider gender pay equity, the needs of the low-paid, and the objective of promoting social inclusion through workforce participation. The current national minimum wage (set by the 2025 review) is $24.10 per hour or $915.90 per week for a full-time employee. Modern award minimum rates, which cover approximately 2.6 million workers, are set at classification levels above the national minimum and are increased by the same percentage.
What are unions arguing for?
The Australian Council of Trade Unions (ACTU) has signalled it will seek an increase of approximately 5% to the minimum wage in its 2026 submission, arguing that low-paid workers deserve a real wage increase that exceeds inflation and begins to restore purchasing power lost during the high-inflation years of 2022 to 2024. The ACTU's argument rests on several pillars: first, that inflation has moderated to around 2.8% (within the RBA's target band), meaning a 5% increase delivers a real wage gain without being inflationary. Second, that corporate profits remain strong, with the ABS reporting company gross operating profits grew by over 7% in the year to December 2025, demonstrating that businesses can absorb higher wages. Third, that the gender pay gap — while narrowing — remains at approximately 11.5%, and that minimum wage increases disproportionately benefit women, who are overrepresented in low-paid award-reliant industries like retail, hospitality, aged care, and cleaning. Fourth, that housing costs (particularly rents) have risen far faster than wages over the past three years, and minimum wage workers in capital cities are under severe financial stress. Individual unions representing specific sectors — including the SDA (retail and fast food), HSU (health services), and UWU (hospitality, aged care, cleaning) — are expected to make supplementary submissions with sector-specific evidence.
What are employers arguing for?
Employer groups including the Australian Industry Group (Ai Group), the Australian Chamber of Commerce and Industry (ACCI), and the Australian Hotels Association are expected to argue for a more modest increase of around 2.5 to 3%, broadly in line with current inflation. Their arguments typically focus on: the need to protect employment growth — they argue that excessive wage increases lead businesses to reduce hours, delay hiring, or accelerate automation, with the lowest-skilled workers most affected. Small business viability — small businesses with thin margins cannot absorb large wage increases without raising prices, which contributes to inflation. The cumulative impact of above-inflation increases in 2023 (5.75%), 2024 (3.75%), and 2025 (3.75%) — employer groups argue that three consecutive years of above-CPI minimum wage increases have already placed significant cost pressure on labour-intensive businesses. The interaction between wage increases and other cost pressures including payday super compliance costs (from July 2026), energy prices, insurance, and rent. International competitiveness — while minimum wages differ across countries, employer groups note that Australia already has one of the highest minimum wages in the world on a purchasing power parity basis. The government, through the Treasury, typically files a submission that is more closely aligned with its economic forecasts rather than explicitly supporting either side.
Predicted minimum wage increase for 2026
Based on the economic data available and the FWC's recent decision patterns, the most likely outcome for the 2026 Annual Wage Review is an increase of 3.25 to 4%. Here is the reasoning behind this prediction. The FWC has consistently delivered increases above CPI since 2022, reflecting its mandate to consider the needs of the low-paid and promote social inclusion. With headline CPI at approximately 2.8% and trending down, an increase of 3.5% would deliver a modest real wage gain while remaining within the range that most employers can absorb. A 3.5% increase would take the national minimum wage from $24.10 to approximately $24.95 per hour, or from $915.90 to around $947.95 per week — an increase of roughly $32 per week before tax. For a full-time minimum wage worker, this translates to an annual gross income increase of approximately $1,660. Award rates at higher classification levels would increase by the same percentage. The FWC may also deliver a slightly higher increase for certain low-paid award classifications (as it did in 2023 for aged care workers) if it determines that specific sectors warrant additional adjustment. The decision is expected to be handed down in the first or second week of June, with the new rates taking effect from the first full pay period on or after 1 July 2026.
When does the new minimum wage take effect?
The FWC's decision on the national minimum wage increase is typically released in the first two weeks of June, with the new rate taking effect from the first full pay period on or after 1 July 2026. This means the exact start date for the new rate depends on your pay cycle. If you are paid weekly with a pay period starting on Monday, and your pay period runs from Monday 29 June to Sunday 5 July 2026, the old rate applies for that pay period because it started before 1 July. The new rate applies from the next full pay period starting on Monday 6 July. For fortnightly pay periods, if your period runs from Monday 23 June to Sunday 6 July, the old rate applies for the entire fortnight. The new rate applies from the pay period starting Monday 7 July. For monthly pay, the new rate applies from 1 July if that is your pay period start date. This transition rule means there can be a gap of up to two weeks between 1 July and when you actually see the increase in your pay. Check with your employer if you are unsure about your pay period dates. If you are covered by a modern award, the FWC publishes updated pay guide summaries for each award shortly after the decision, showing the new rates for each classification level.
How the minimum wage increase affects award workers
The minimum wage decision does not just affect workers on the bare national minimum wage — it flows through to all 121 modern awards covering approximately 2.6 million Australian workers. When the FWC increases the minimum wage by a percentage, every minimum rate in every award goes up by the same percentage. For example, a Level 3 retail employee under the General Retail Industry Award currently earning $26.18 per hour would see their rate increase to approximately $27.10 per hour if a 3.5% increase is applied. Penalty rates, which are calculated as multiples of the base rate, also increase proportionally — a Sunday penalty of 200% on a $26.18 base ($52.36 per hour) would become 200% of $27.10 ($54.20 per hour). Overtime rates, shift allowances expressed as percentages of the ordinary rate, and other rate-linked entitlements all flow from the new base. However, employer-specific above-award payments do not automatically increase — if your contract pays a flat rate above the award minimum, the award increase only affects you if it pushes the minimum above your contracted rate. Many enterprise agreements contain clauses linking to award increases, but this varies. Check your employment contract or enterprise agreement to understand how the annual wage review decision applies to your specific situation.
What to do if your pay does not increase
After the new minimum wage comes into effect, it is your employer's legal obligation to pay the updated rate. If your pay does not increase from the first applicable pay period, take these steps. First, check whether the increase actually applies to you — if you are paid above the relevant award rate and your contract does not link to award increases, you may not be entitled to an automatic increase. Second, check the correct rate for your classification level in your award using the FWC's pay guide or the Fair Work Ombudsman's Pay Calculator. Third, raise it with your employer or payroll manager in writing — many cases of non-compliance are unintentional, especially in small businesses where payroll updates may be delayed. Fourth, if your employer does not correct the underpayment within a reasonable time (2 to 4 weeks), contact the Fair Work Ombudsman for assistance. The Fair Work Ombudsman can investigate underpayment complaints, issue compliance notices requiring the employer to rectify the breach, and pursue legal action in serious or repeated cases. Keep your payslips and records of all communications. Under-payment of minimum award rates is a serious contravention of the Fair Work Act, with penalties of up to $93,900 per contravention for companies and $18,780 for individuals.
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General information and estimates only — not legal, financial, or tax advice. Always verify with the Fair Work Ombudsman (13 13 94) or a qualified professional.
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