On 3 June 2025, the Fair Work Commission announced its Annual Wage Review decision, confirming that the Australia minimum wage increase 2025 will take effect from 1 July 2025.
This article explains:
- What’s changing
- Who it applies to
- How to prepare your business
Australia Minimum Wage Increase 2025 – What’s Changing?
National Minimum Wage:
This Australia minimum wage increase 2025 sets the new national minimum wage at $948 per week.
- New Weekly Rate: $948 per week (based on 38 ordinary hours)
- New Hourly Rate: $24.95 per hour
This represents a 3.5% increase over the previous minimum wage.
Modern Award Minimum Wages:
- All minimum award wages will also rise by 3.5%.
- Updated pay guides are available from the Fair Work Ombudsman.
Who Is Affected?
This wage increase applies to:
- All employees paid the National Minimum Wage
- All employees covered by a modern award
- Junior employees and apprentices (pro-rata)
- Casual employees (with the 25% casual loading applied)
Even if you already pay above award rates, you must ensure your pay rates remain compliant.
What You Need to Do
- Review all pay rates and classifications.
- Update your payroll systems (Xero, MYOB, etc.) to reflect the new minimums.
- Download the updated pay guides for your applicable awards.
- Notify employees in writing about any changes to their pay.
When Do the Changes Apply?
The increase applies to the first full pay period starting on or after 1 July 2025.
Example:
If your pay week starts Wednesday 2 July, the new rates apply from that date.
Why This Matters
Failing to implement the increase can result in:
- Underpayment claims (with up to 6 years of back pay)
- Significant penalties under the Fair Work Act
- Reputational damage
Employers must comply with the Australia minimum wage increase 2025 to avoid penalties.
Tips to Stay Compliant with the minimum wage increase 2025
- Use the Fair Work Pay Calculator to confirm rates for each classification.
- Update employment contracts to reflect the new minimum pay rates.
- Keep records of pay adjustments and employee communications.
- Schedule an annual payroll audit to avoid compliance gaps.
- You can read the full decision on the Fair Work Ombudsman website.
Need Help?
We can help you with:
- Reviewing employee classifications and pay rates
- Updating your payroll software
- Drafting employee communications
For help updating your payroll, visit our Bookkeeping Services page or Contact us to ensure your business is ready for 1 July 2025.
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