National Minimum Wage Increase
The National Minimum Wage applies to employees not covered by an award or registered agreement. From 1 July 2025, the NMW will be increased to $948.00 per week or $24.95 per hour. It is an increase of about $32.10 a week to the current minimum wage.
Award Minimum Wage Increase
Following consultation with a range of stakeholders, including peak councils, registered employer/employee organisations, individual employers and employees, and the Australian Commonwealth and State Governments, the FWC decided that employees covered by a modern award (approximately a 2.6 million workers – equivalent to 20.7% of the national workforce) will have their award based minimum rates increased by 3.5% with effect the first full pay period starting on or after 1 July 2025.
The FWC determined that based on the Reserve Bank of Australia’s assessment that inflation has returned to its target of 2-3%, the time had come
for awarding a real increase to modern award wages and the NMW so as to avoid permanently entrenching a reduction in living standards for the
lowest paid in the community. The FWC went on to state that they were satisfied that based on:
Enterprise Agreement Wage Increase
Employees covered by enterprise agreements that provide for annual wage increases aligned to the FWC Annual Wage Review (approximately 300,000 workers – equivalent to 2.3% of the national workforce), will also be entitled to the 3.5% increase with effect 1 July 2025.
Superannuation
The legislated minimum superannuation amount will increase from 11.5% to 12% per annum on 1 July 2025.
Takeaways for employers
The increases to minimum wages will take effect for employers from the first full pay period on or after 1 July 2025. The increases will also have a flow-on effect to all loadings, penalties, allowances and overtime payments under the awards that are calculated with reference to the minimum wage. Employers will soon be able to review these increase on the FWC’s Pay and Conditions Tool website, with the associated FWC pay guides being published closer to 1 July 2025.
Employers should review their current pay arrangements to ensure that:
Disclaimer: The information contained in this update is intended as a guide only. Professional advice should be sought before applying any of the information to circumstances. While every reasonable care has been taken in the preparation of this update. Law Ensure (ACN 168 990 261) does not accept liability for any errors it may contain.