Almost three million Australians will receive a pay boost after the Fair Work Commission announced the outcome of their annual minimum and award wage review.
On Tuesday, they announced the decision to lift the minimum wage to $26.44 per hour (up from $24.95) or $1004.90 a week (up from $948). This means that the minimum wage will increase by 5.97 per cent, and minimum award workers will get a 4.75 per cent pay boost.
The decision came amid the ongoing conflict in the Middle East, which has has disrupted oil supplies following the shut down of the Strait of Hormuz, and accelerated inflation in Australia.
According to the Australian Bureau of Statistics, headline inflation was 4.2 per cent around April, with the Reserve Bank predicting it will rise to 4.8 per cent by the end of June.
Fair Work Commission president Adam Hatcher said awarding a pay rise of more than five per cent to fully restore workers’ purchasing power to pre-pandemic levels would not have been practical or responsible in the current economic climate.
“However, we consider that we should at least ensure that modern award relied employees generally are not worse off in real terms than they were as at 1 July, 2025,” he said.
Prior to the announcement, the Australian Council of Trade Unions proposed for a 6 per cent increase, while employer body Australian Industry Group called for a lower rise of 3.9 per cent.
While the federal government does not choose the exact figure, Treasurer Jim Chalmers said workers deserved a decent wage increase in an interview with the ABC.
“We want to see it go up further today, and that’s because we recognise that higher wages and lower taxes are the best way to help working people with the cost of living,” he told the broadcaster ahead of the decision.
The wage increase applies to roughly one in five workers, although the commission estimates those employees account for just 11.2 per cent of total wages paid across the economy.
The pay rise will apply from July 1.
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