Annual Wage Review 2026 and Changes to Junior Pay Rates

Annual Wage Review 2026

On 2 June 2026, the Full Bench of the Fair Work Commission (Commission) handed down its annual wage review decision.

The Commission held that the National Minimum Wage will be increased by 6 per cent and minimum rates of pay under all modern awards would be increased by 4.75 per cent. In addition, rates at the ‘C13’ level in modern awards will no longer be used for ongoing employment, and instead will be limited to entry level employment for a period of 6 months (or less). The ‘C12’ level will now be the lowest wage rate used for ongoing employment.

As a result, the National Minimum Wage will be increased by $1.49 to $26.44 per hour ($1004.90 per 38-hour week) and the ‘C13’ rate for entry level employment for a period of 6 months (or less) will be increased to $25.74 per hour ($978.10 per 38-hour week).

The decision will directly affect employees who have their rate of pay set under the National Minimum Wage or under a modern award. It will not affect employees employed under enterprise agreements (unless the applicable modern award base rate is higher than the enterprise agreement rate) or those employees receiving higher benefits under a contract of employment subject to the terms of the relevant contract of employment.

The new rates of pay will come into operation from the first full pay period on or after 1 July 2026.

Implications

Employers should review the rate of pay for any employees whose salary is based upon the National Minimum Wage or a modern award. If an increase in an employee’s rate of pay is required by the decision, their wages must be adjusted from the first full pay period on or after 1 July 2026.

Read the full decision at Annual Wage Review Decision 2026

Changes to Junior Pay Rates

On 31 March 2026, the Commission handed down a decision on an application by the Shop, Distributive and Allied Employees Association (SDA) to vary the following modern awards (Decision).

• General Retail Industry Award 2020;
• Fast Food Industry Award 2020; and
• Pharmacy Industry Award 2020 (the Awards)

The SDA sought to amend the Awards by removing junior rates for employees between the ages of 18-20 and increasing the rates for employees under the age of 17.

The Commission decided that junior rates for employees between the ages of 18-20 will be gradually phased out, after an employee has reached 6 months service. The Commission did not vary the Awards to increase the rates for employees under 17 years of age.

The Decision means that employees between the ages of 18-20 covered by the Awards will be entitled to the adult rate for their given classification provided that they have been working for their employer for a period of 6 months. The changes are limited to the three identified Awards; however, employers can expect unions to campaign for similar changes to other industrial instruments in the future. These changes are expected to begin as soon as 1 December 2026, with complete implementation by July 2029.

Impact for Employers

Employers must be aware of the changes to avoid the risk of underpayments to relevant employees.

EMA Legal is able to assist employers with any questions which may arise from these changes.