Every year the Fair Work Commission reviews the wage floor, and every year the decision quietly resets the numbers under a lot of businesses at once. The 2026 review has landed, it's now in effect, and if you use labour hire it changes what you pay — even though you don't run the payroll. Here's the plain-English version: what actually changed, how a wage increase moves through a labour hire rate, and the handful of things you genuinely have to check.
What the Commission decided
From 1 July 2026, modern award minimum wages increased by 4.75%. That's the number that matters for most workplaces, because most workers are paid under an award.
The National Minimum Wage — the floor for the small share of employees who aren't covered by any award or enterprise agreement — went to $1,004.90 per week, or $26.44 per hour. It's the first time the national floor has passed a thousand dollars a week. There's also a lower entry-level rate for the first six months of certain employment, which must be at least $978.10 per week or $25.74 per hour.
The one detail people trip on is the start date. The new rates apply from the first full pay period starting on or after 1 July 2026 — not from 1 July itself. So if your pay week runs Wednesday to Tuesday, the increase kicked in from the first Wednesday on or after 1 July, not part-way through a period. Get that wrong in either direction and you've either underpaid or over-thought it.
Award or National Minimum Wage — which one moves your rate?
This is worth being clear on, because the headline "$26.44 an hour" isn't the number that sets most people's pay.
The National Minimum Wage is the absolute floor, and it only directly applies to employees who aren't covered by an award or an agreement. In warehousing, logistics, manufacturing, hospitality and most of the industries we work in, workers are covered by an award — so the number that actually moves their pay is the 4.75% award increase, applied to their specific classification rate, not the flat national figure.
The practical takeaway: don't assume "the minimum wage went up" means a set dollar figure for your crew. The award rate for a picker, a machine operator or a forklift driver each moved by 4.75% off its own base, and the penalty rates, shift loadings and allowances that sit on top move with it.
How a wage increase flows through a labour hire rate
When you engage a worker directly, a pay rise hits your payroll and you see it straight away. When you use labour hire, the worker is our employee, not yours — so the increase reaches you through the charge rate, the all-in hourly figure we bill.
That charge rate isn't the pay rate with a margin bolted on top. It's the pay rate plus every on-cost that's calculated as a percentage of it, and then a margin. We've broken the whole stack down before, but the short version of why a wage increase matters more than it first looks:
- Super moves with the base. Superannuation is now 12% of ordinary earnings. When the base rate goes up 4.75%, the super dollars go up with it.
- Workers' compensation premiums are struck as a percentage of wages, so they climb on the higher base too.
- Payroll tax, where it applies, is a percentage of the wages bill — same effect.
- Leave and leave loading for permanent and part-time engagements accrue on the higher rate.
So a 4.75% lift in the underlying award rate produces a rise in the charge rate that's broadly proportional — the on-costs go up because they're all built on the base that just moved. A properly run provider passes through the genuine increase in the worker's pay and the on-costs that legally follow it, and no more. If a rate jumps by a lot more than the wage decision would explain, that's a fair question to ask.
Over-award pay and the "we already pay above minimum" trap
A common reaction is: we already pay above the new minimum, so this doesn't touch us. Sometimes that's right. Often it needs a second look.
Whether an over-award rate can absorb an increase depends on how the pay was set up. If someone is on a flat rate that was clearly built to cover the award plus penalties and allowances, there may be room to absorb the rise. But if the award rate, or a specific penalty or allowance, has now climbed past what the flat rate was actually covering, the flat rate no longer does the job and it has to move. The safe habit is to re-check the new award rate against what's actually being paid, line by line, rather than assume a comfortable-looking number still clears the floor. This is exactly the kind of check we run on every worker we place, so the rate we bill you is one that's genuinely compliant — not one that looked fine last year.
What you actually need to do
If you use labour hire, most of the payroll mechanics are our problem, not yours. But a few things are worth your attention:
- Expect the charge rate to move, and understand why. A rate change after 1 July that tracks the wage decision isn't a provider getting greedy — it's the decision doing what it does. Ask for the reasoning if it isn't clear.
- Check your own direct employees separately. The increase applies to everyone under the relevant award or the national floor, including the people on your own books. The first-full-pay-period timing applies to them the same way.
- Mind the back-pay risk. If a rate should have moved from your first full pay period on or after 1 July and didn't, the shortfall is a back-payment, not a rounding error. It's cheaper to correct early than to find it in an audit.
- Don't forget the on-top figures. Penalty rates, overtime, shift loadings and allowances are calculated off the base, so they moved too. A rate update that lifts the base but leaves the loadings on last year's numbers is only half done.
Where this lands with us
We build our rates to pay people properly for the work, so an annual increase isn't a scramble at our end — it's a scheduled update. When the decision lands, we reprice against the new award rates, recalculate the on-costs off the new base, and the charge rate you see reflects the real cost of engaging that worker compliantly. No underpaid crew quietly propping up a cheaper rate, and no surprise dressed up as a wage rise.
If you want to see exactly what sits inside the number we bill you — pay, super, workers' comp, payroll tax, margin and all — our breakdown of what casual, labour hire and permanent staff really cost lays out every component.
This is general information, not legal advice — the exact rate for a given role turns on the specific award, classification and your arrangement, so check your own situation or get in touch and we'll walk you through how the increase affects the workers we place for you.
General information only, current at the time of writing — not legal advice. Workplace and licensing laws change; confirm anything decision-critical with the relevant regulator or a qualified adviser.