Key Takeaways
The Fair Work Commission confirmed a 4.75% increase to all modern award minimum wage rates, effective from the first full pay period on or after 1 July 2026, directly affecting almost 2.8 million workers.
Accommodation and food services, healthcare, and retail together account for over two-thirds of all award-reliant employees, making these sectors the most exposed to the increase.
From 1 July 2026, the National Minimum Wage will increase by 4.75%, however, due to structural adjustments of the C12, C13 & C14 wage levels, the minimums will be higher than 4.75%.
You can prepare now by auditing your award classifications, updating your payroll and rostering systems, and reviewing labour budgets before your first July pay run.
1. What the 4.75% increase means for your payroll
Modern award rates are where this decision hits hardest. Modern awards set the minimum wage rate for approximately 21.1% of all employees in Australia. If you employ shift workers under the Hospitality Industry (General) Award, the General Retail Industry Award, a health services award, or any other award, every hourly rate in your pay run goes up from 1 July.
The FWC also lifted the National Minimum Wage to $26.44 per hour ($1,004.90 per week). This applies to the approximately 100,000 workers not covered by a modern award or enterprise agreement.
New rates take effect from the first full pay period on or after 1 July 2026. That means your payroll team has weeks, not months, to review pay rules, check award interpretation, and confirm every employee is on the correct classification and rate.
2. Where the pressure hits hardest
Hospitality carries more award-reliant workers than almost any other sector. Real-time workforce data from over 385,000 workplaces shows hospitality venues recorded a 28% increase in shift activity through late 2025, according to the Big Shift Report 2026. With more shifts and more workers on the books, the cost exposure from a 4.75% rate increase grows significantly.
At the same time, the share of shift workers reporting stress or frustration rose from 4.28% to 5.90% in 2025, based on the Shift Pulse Report. Higher wages won't fix burnout if rosters don't match demand.
Retail faces a hiring slowdown on top of the wage increase. Monthly hiring rates fell from 0.15% in 2022 to between 0.05% and 0.08% in 2025. For retail businesses already running lean, the increase means you can't simply roster extra hands to cover busy periods. You need to get more from the hours you already pay for.
Healthcare has been absorbing significant pay corrections over the past two years. The New South Wales (NSW) Industrial Relations Commission awarded nurses and midwives pay rises of 16% to 28% in April 2026, and roughly 400,000 aged care workers benefited from the Aged Care Work Value Case, with increases of up to 23%. The FWC has also flagged phased wage increases for children's services employees, disability home care workers, and other health professionals as part of its gender undervaluation review. A 4.75% award increase adds a further layer to an already stretched payroll.
Across all three sectors, the focus has moved toward optimising existing hours and staffing levels rather than expanding headcount. Planning ahead gives you more control over the impact than simply absorbing the cost.
3. How workforce platforms help you absorb the increase
When award rates change, the ripple effect touches every roster, timesheet, and pay run. A workforce platform helps support compliance workflows by connecting scheduling, time and attendance, and payroll data, and by helping managers review labour costs before shifts are worked.
Here's what that looks like in practice:
Roster cost visibility lets you see the labour cost impact of a 4.75% increase before you publish a roster, so you can adjust staffing levels proactively.
Timesheet accuracy reduces the risk of underpayment claims by capturing actual hours worked against award rates.
Payroll integration helps you apply new rates across your workforce without manual data entry across multiple systems.
Award and pay-rate tools can help teams apply configured pay rules and itemised pay recommendations, subject to each customer’s setup, award interpretation, and payroll review.
None of this replaces your obligation to understand the awards that apply to your team, or to seek payroll, HR, or legal advice where needed. But it can mean you spend less time on manual checks and more time running your business.
The FWC's 4.75% determination will shape labour costs for almost 2.8 million Australian workers and the businesses that employ them. The businesses that move early on payroll updates, roster reviews, and award checks will be the ones that will be better positioned to absorb the change without disruption.
Don’t let the wage increase catch your bottom line by surprise. Deputy gives you real-time visibility into your estimated labour costs as you build your roster, helping you optimise every shift before you publish. See Deputy in action today.
