04 Jun 2025
Libby Pallot, Ben Tallboys, Anthony Massaro, Mandi Xu, Walter MacCallum, Samuel Ellemor, Abbey Burns, Kelly Ralph, Morgan Smithe, Shi Jing Wong, Harrison Gray, Emily Tang, Molly Lawlor, Jack Kneale, Sarah Newman, Sara Ibrahim & Ruby Jafari
On Tuesday 3 June 2025, a Full Bench of the Fair Work Commission handed down its Annual Wage Review 2025 decision, announcing a 3.5% increase to the National Minimum Wage and modern award minimum wage rates from 1 July 2025.
President of the Commission, Justice Adam Hatcher, noted that the decision will impact approximately 2.61 million Australians (20.7%) who are engaged in employment under modern awards. The Full Bench’s primary consideration was that since July 2021, employees on modern award minimum wages or the National Minimum Wage have suffered a decrease in the real value of their wage rates. The Commission noted that for modern awards, the benchmark C10 award rates have declined by 4.5% as a result of inflation. Therefore, low-paid workers have seen their living standards decline.
This year’s increase to Modern Award Minimum Wage is less than last year’s, which saw a 3.75% increase in minimum wages. The Commission noted that inflation is now within the Reserve Bank of Australia’s target range (2-3%), and there is now an opportunity to restore some of the real wage losses from the past four years. The Commission further noted that failing to act in the current Annual Wage Review risks permanently embedding lower real wages and reduced living standards for Australia’s lowest-paid workers.
The Commission is satisfied that the increase of 3.5% is sustainable. The Commission noted that the labour market remains strong, with low unemployment, rising employment, and high participation in the workforce. Interest rate cuts are expected to boost consumer demand and economic growth.
The outcome of the decision is that as at 1 July 2025, the National Minimum Wage will increase by:
- $0.85 to $24.95 per hour
- $32.10 to $948 per 38-hour week
A copy of the full decision is available here.
Employers must ensure that award-covered employees are paid at least the minimum award wage. We recommend that employers conduct an audit of the wage rates in their enterprise agreements and adjust employee salaries if the agreement wages fall below the new modern award rates.
Employers should also be aware that the superannuation guarantee rates will increase from 11.5% to 12% from 1 July 2025 in accordance with the Superannuation Guarantee (Administration) Act 1992.
President Hatcher confirmed that the Commission will continue with its targeted program to eliminate gender-based undervaluation in modern awards and ensure equal pay for women for work of equal or comparable value. The Commission will now focus on reviewing all professional classifications in modern awards – these include all classifications which an undergraduate university degree is required as a minimum.
How can we help?
Please contact a member from our Workplace Relations, Employment and Safety team for advice regarding the Fair Work Commission Annual Wage Review or any other workplace relations matter.
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