Workers on modern awards will receive a pay rise from 1 July 2026, but the real wage gap since 2021 remains only partially closed

The Fair Work Commission has handed down its Annual Wage Review 2026 decision, ordering a 4.75% increase to modern award minimum wage rates, along with a targeted structural uplift for the country's lowest-paid workers, as it attempts to balance a cost-of-living crisis against mounting economic uncertainty driven by the Middle East conflict.

The increases will take effect from 1 July 2026.

The headline rate increase of 4.75% applies to minimum wage rates across all modern awards, lifting the benchmark C10 classification and the wages of approximately 2.8 million Australians (around 21.1% of the workforce) who are paid at a modern award rate.

The national minimum wage (NMW) has been increased to $1,004.90 per week, or $26.44 per hour, in line with the C13 classification rate, which is the lowest rate applicable to ongoing employment in the modern award system.

Beyond the general increase, the Commission has introduced a structural adjustment specifically targeting workers on the C13 and C14 wage rates – the lowest classifications in the modern award system. As foreshadowed in last year's decision, the C13 rate is being phased out over three stages, with the C12 rate set to become the new minimum floor for ongoing employment.

In this first stage, the C13 rate receives an additional increase of approximately 1.2% on top of the general 4.75% rise –...

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