From 1 July 2026, millions of Australian workers will see significant changes to their pay packets and entitlements as the new financial year begins. The national minimum wage will increase to $24.10 per hour, up from $23.23, representing a 3.75% rise. This adjustment, determined by the Fair Work Commission, will directly benefit around 2.6 million award-dependent employees.
Minimum wage and award rates
The 3.75% increase applies to all modern award classifications, not just the minimum wage. For a full-time worker on the minimum wage, this means an extra $36.30 per week before tax. The Fair Work Commission stated the rise aims to balance the needs of low-paid workers with economic conditions, including inflation moderating to 2.8%.
Employers must ensure pay rates are updated from the first full pay period starting on or after 1 July. The Australian Council of Trade Unions (ACTU) welcomed the increase but argued it should have been higher. ACTU Secretary Sally McManus said, "While any increase helps, working people are still struggling with cost-of-living pressures. The government must do more to ensure wages keep pace."
Super guarantee rises to 12.5%
The superannuation guarantee rate will increase from 12% to 12.5% on 1 July. This is the latest step in the legislated schedule to reach 15% by 2035. For an employee earning $80,000, this means an extra $400 in super contributions over the year. The Association of Superannuation Funds of Australia (ASFA) estimates the increase will boost retirement savings by around $30,000 for a typical worker over their career.
Employers must adjust payroll systems to reflect the new rate. The Australian Taxation Office (ATO) will enforce compliance, with penalties for underpayment. Industry Super Australia chief executive Bernie Dean said, "This increment is a win for future retirees, but we need to keep the pressure on to reach 15%."
Paid parental leave expands to 26 weeks
From 1 July, eligible parents can access 26 weeks of government-funded paid parental leave, up from 24 weeks. The scheme, administered by Services Australia, provides the national minimum wage (currently $882.80 per week) for up to 26 weeks. Parents can share the leave flexibly, including simultaneous use.
The expansion is part of a phased increase to 30 weeks by 2028. To qualify, individuals must meet work and residency tests. The Department of Social Services estimates an additional 50,000 families will benefit annually. Families Minister Amanda Rishworth said, "This change gives parents more time to bond with their newborn and supports gender equality in caring responsibilities."
Other changes from 1 July
Several other adjustments take effect. The tax-free threshold for the Medicare levy low-income threshold will increase to $24,276 for singles and $40,939 for families. The childcare subsidy will see a slight increase in the hourly rate cap. Additionally, the pension loan scheme interest rate will decrease to 2.25%.
Employers are reminded to update payroll systems and award classifications. The Fair Work Ombudsman provides free resources and tools to assist with compliance. Employees should check their pay slips and super statements to ensure correct application of the new rates.
