By: Sian Gilbert, Ellie Jongma and Rachel Ralevski
As the new financial year begins, new workplace law changes are in effect. These changes require attention and action by employers to ensure that businesses are compliant with the new regulations and procedures.
National Minimum Wage and Minimum Award
The Fair Work Commission Annual Wage Review decision has set the National Minimum Wage and increased all 121 modern award rates.
Most notably from 1 July 2026, the National Minimum Wage is:
- $1,004.90 per week; or
- $26.44 per hour.
As most employees are covered by an Award, another notable change is that the minimum award wages have increased by approximately 4.75%, provided that:
- The lowest rate in any award that applies to ongoing employment must be at least $1,004.90 per week or $26.44 per hour; and
- Any entry-level rate that applies to the first 6 months (or less) of employment must be at least $978.10 per week or $25.74 per hour.
The above increase also begins from the first full pay period starting on or after 1 July 2026, which means that if your company’s pay period begins on a Wednesday, the new rates will apply from the next pay cycle.
Each of the awards and the pay guides showing the minimum wage increase for each classification can be found here.
With this, the tax bracket of $18,201.00 – $45,000.00 will also have a tax cut of approximately 15% which will allow for approximately $5.00 per week back in the employee’s pocket.
One of the key changes is to the Pharmacy Award in that the minimum pay rates for pharmacists (including pharmacy interns) covered by the Pharmacy Award are increasing by 14.1%.
Superannuation
Pay super within 7 days of wages
Before the 1 July 2026 changes, employers were only required to pay employees’ super contributions at least every 3 months into the employee’s nominated account.
However, as at 1 July 2026, employers are now required to pay employees’ super contributions at the same time they pay their salary or wages so that the contributions reach employees’ nominated account within 7 days. However, there is one exception that if it is a new employee, the first super contribution need only be made within 20 business days of the salary or wages being paid.
Superannuation guarantee rate stays at 12%
Before 1 July 2026, the basis for super guarantee was calculated as 12% of ordinary time earnings.
However, as at 1 July 2026, the basis is calculated as 12% of qualifying earnings, which is a new term that brings together ordinary time earnings and other payments.
Employers should review their current superannuation arrangements carefully to ensure that they remain compliant with their obligations under these new changes.
Paid Parental Leave
Under the government scheme, new parents will also now get 130 days of Parental Leave Pay for children born or adopted after 1 July 2026, which equates to 26 weeks. This was an increase from the previous 120 days. The paid parental leave is paid at the National Minimum Wage and is in addition to any employer-paid parental leave.
Unpaid flexible parental leave is also increasing to 130 days for a child who is born or placed for adoption on or after 1 July 2026.
High-income threshold and the compensation cap
The high-income threshold will increase to $190,100.00. The high-income threshold is the amount of money earned by an employee before the relevant award stops applying to them. It also operates as a limit to an employee’s eligibility for protection from unfair dismissal under the Fair Work Act 2009 (Cth).
The contractor’s high-income threshold will also increase to $190,100.00. The contractor high-income threshold is the amount of money earned by a contractor before certain Fair Work Commission remedies no longer apply, including for unfair deactivation, unfair termination and unfair contract terms.
Lastly, the compensation cap will increase to $95,050.00. The compensation cap is the most the Fair Work Commission can order an employer pay in an unfair dismissal case.
Work Health and Safety Penalties
Under model work health and safety legislation, the maximum monetary penalty for contravening safety legislation is subject to annual indexation based on Australian Consumer Price Index (CPI).
For industrial manslaughter under the model legislation, the maximum monetary penalty is now $21,274,000 for body corporates and 20 years’ imprisonment for individuals.
The model legislation also puts the maximum monetary penalty for a category 1 offence as $12,321,000 for bodies corporate. We note that the actual maximum penalty varies according to jurisdiction.
Next Steps for Employers
- Familiarise yourself with the pay guides outlined by the Fair Work Ombudsman and introduce the pay wages and/or salaries within the next pay cycle;
- Update payroll systems to reflect the new super contributions for employees; and
- Familiarise yourself with your obligations under the new paid parental leave and whether any company policies and regulations need to be updated.
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