The Fair Work Commission’s Expert Panel today announced an increase to minimum wages following the Annual Wage Review 2026-27.
Last year, the national minimum wage (NMW) and the minimum rates of pay in modern awards were increased by 3.5%.
This year, the Expert Panel determined to increase the minimum rates of pay in modern awards by 4.75%. The NMW will also see an increase of just under 6% which results in a minimum rate of $1004.90 per week or $26.44 per hour. These changes will take effect from the first full pay period on or after 1 July 2026.
In establishing and maintaining a safety net of fair minimum wages, the Panel said they are required to take into account the following factors:
- performance and competitiveness of the national economy;
- the need to promote gender equality;
- promoting social inclusion through increased workforce participation;
- relative living standards; and
- the needs of the law paid.
In determining an appropriate increase to the NMW, the Panel stated:
The determination of this year’s Review outcome has been particularly challenging because of the unusual degree of complexity in the interaction of the matters we are required to take into account. Until February this year, most elements of economic and business performance in Australia were sound. There was healthy economic growth and growth in jobs and hours worked, productivity, and business profits and investment during 2025, while wages growth remained moderate and real unit labour costs did not increase. However, the economy encountered capacity constraints in the latter half of 2025, with the result that the rate of inflation increased by more than forecast, to be well above the Reserve Bank target band. The tightening of monetary policy by the Reserve Bank which followed will undoubtedly slow down the economy in the year ahead.
On top of this, the Australian economy faces the wild card of the Middle East conflict which broke out unexpectedly on 28 February 2026. The consequential disruption to oil supplies has accelerated inflation in Australia through direct effects on the price of petrol and diesel and second round effects on the price of a range of goods and services. This has added uncertainty as to the trajectory of the economy at least in the near future, although we note that the Reserve Bank and Budget forecasts for the economy to the end of financial year 2026–27 have not substantially changed because of the conflict, and headline inflation is projected to return to the Reserve Bank’s target band by that time.
The Panel also foreshadowed continuing its review of all professional classifications in modern awards, aiming to complete this by the 2027 Annual Wage Review, and addressing major gender undervaluation claims involving nurses and flight attendants over the coming year.
What does this mean for employers?
The Panel’s decision will affect millions of Australian workers, including those who have their rate of pay set under the NMW, a modern award or in some cases, an enterprise agreement.
Employers must reflect these increases from the first full pay period on or after 1 July 2026. Failure to implement these increases will result in underpayments which could lead to legal action including the imposition of financial penalties for breaches of the Fair Work Act 2009.
If you would like more information about the legal implications of these increases and how they may affect your business, please contact our experienced Employment and Workplace Relations team for assistance.
You can read more about the Annual Wage Review 2026-27 at these links: