- Published
Award Wages
Every year, the Fair Work Commission generally increases the National Minimum Wage, award wages, and some allowances from the first full pay period commencing on or after 1 July.
We usually see the Commission’s decision handed down sometime in late June.
Not knowing the exact date can make it tricky to prepare properly, and once the decision is announced, there’s only a short window to review and make any necessary changes.
This update explains what’s changing, how your team might be impacted, and what you can do now to stay ahead.
We’ll email our clients with updates as soon as they’re available ➡️ sign up to make sure you don’t miss anything.
If you need a hand getting organised, get in touch with the Edwards HR team early, it’s one of the busiest times of the year!
Superannuation
Also from 1 July 2025, super guarantee (compulsory employer contributions) will increase from 11.5% to 12%.
Super has been increasing by 0.5% each financial year since 2021, and this will be the final scheduled increase to reach the legislated 12%.
At this stage, there are no further increases planned beyond 12%, but it’s always worth keeping an eye out for any future changes.
You can find more information on the ATO website.
Key Actions
Employers should not wait until the wage decision is handed down in June.
Action the following steps to make sure you are prepared by the relevant effective dates:
- If your employees are covered by national minimum wage or an award, keep an eye out for the new rates and effective dates then ensure any necessary changes are passed on by the first full pay period starting on or after 1 July 2025.
- Make sure your payroll system is ready to pay 12% superannuation from 1 July 2025.
- Now is a good time to check that each employee is correctly classified under the Award level applicable for the work they perform, and that every employee has an appropriate employment agreement and IFA (if applicable).
- If you are unsure whether you are paying people properly, read our Quick Guide.
- If you pay a flat or loaded rate, check out our Quick Guide to ensure it remains compliant.
- If you have an Enterprise Agreement, review it to check if an increase is required (more guidance on this below).
- Remember, any changes to employment details or entitlements should be confirmed in writing for each employee.
- Need help with annual wage reviews or auditing? Contact our team to schedule this with us.
Keep an eye out in coming weeks for our EOFY HR Checklist, which covers all the HR essentials. From employment contracts, entitlements, and awards, to payroll, superannuation, employee files, recruitment, onboarding, and general HR best practices. It’s everything you need to ensure you’re fully prepared for the end of the financial year.
FREUQENTLY ASKED QUESTIONS
Wage compliance is a significant area of focus for the Fair Work Ombudsman so it’s important you get it right. There are heavy penalties and costly backpay obligations that may result if employers do not act on these changes, not to mention the impacts to business reputation.
If you currently pay above the award minimum rate, we recommend checking the new minimum pay rates and ensuring the current pay rate for each employee is still above the new minimum. If you pay salaries, flat rates or loaded rates, keep reading!
You are not required to increase your pay rates if they remain the same as or better than the new minimum rates, unless you wish to.
Some allowances will also be impacted by this change. Check each Award or Pay Guide individually.
Where an allowance is expressed as a percentage of the ‘standard’ rate (which is linked to the wage of a particular classification in the Award), these allowances will increase in line with the ‘standard rate’. Some other allowances may also increase so be sure to check the award once updates are available.
Employers should undertake a review of their enterprise agreement (EA) rates to ensure they continue to be better than the equivalent Award minimum rates. Where they fall behind, EA rates should be increased to (at least) match the new Award minimum rates applicable to each classification.
Employers who have committed to annual wage increases in their Enterprise Agreements should review the specific wording and determine what is both viable and lawful in the current economic conditions.
If you are currently planning or negotiating a new enterprise agreement, the new Award rates will be your reference point for BOOT (better off overall test) baseline testing.
If you pay any employees a flat rate, loaded rate, have set off clauses in contracts or have an Individual Flexibility Arrangement in place, and they are covered by an Award, you are required to ensure the employee/s remain better off overall when compared to the new minimum rates and allowances. We recommend undertaking an assessment of each arrangement to ensure the employee remains better off.
Check out our Quick Guide
Employees paid annual salaries may be impacted in different ways depending, for example, on whether they are:
- Covered by an Award or EA;
- Award free and;
- Covered by an Award containing ‘annualised wage’ provisions.
We recommend reviewing the above, along with individual employee circumstances to ensure the employee remains better off.
Need Support?
Wage compliance is a significant area of focus for the Fair Work Commission so it’s important you get it right. Unfortunately, it’s also tedious and time consuming so let us help you!
Contact the Edwards HR team to understand how this decision may impact your business or to discuss how we can look after your wage compliance and auditing needs.
If you prefer to handle things in house, we also recommend budgeting for on-going professional development for your team. Check out the wide range of Short Courses offered by Edwards HR here.
As always, the team at Edwards HR are here to answer your questions and provide support across all areas of HR.
Get in touch with our team today to discuss how we can help.
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