With the new financial year approaching, employers should be preparing for several important workplace and payroll changes that will come into effect from 1 July 2026. These updates include increases to minimum wages and Award rates, preparations for Payday Super, and enhancements to the Paid Parental Leave scheme. Understanding these changes now will help businesses remain compliant and avoid potential payroll or employment issues in the months ahead.
Wage increases confirmed by the Fair Work Commission
The Fair Work Commission has announced increases to both the National Minimum Wage and Modern Award minimum pay rates. These changes apply from the first full pay period commencing on or after 1 July 2026.
National Minimum Wage
For employees who are not covered by a Modern Award, the National Minimum Wage will increase to:
- $26.44 per hour
- $1,004.90 per week based on a standard 38-hour working week
Modern Award pay rates
Employees covered by Modern Awards will receive a minimum wage increase of 4.75%, with some of the lowest Award classifications receiving increases of up to 6%. Award allowances will also be adjusted accordingly.
The Fair Work Ombudsman is currently updating Award documents, online calculators and wage tools to reflect the new rates.
Employer actions
To ensure compliance, employers should:
- Review employee wage rates against the updated Award and minimum wage requirements.
- Check Enterprise Agreements (where applicable) to ensure employees continue to receive at least the minimum entitlements required under the updated Awards.
- Reassess annualised salary arrangements and loaded salary packages to confirm they continue to satisfy the Better Off Overall Test (BOOT), noting that BOOT is now assessed over a pay period and not over a year.
- Communicate any adjustments to impacted employees before the changes take effect.
Preparing for Payday Super
The Superannuation Guarantee rate reached its legislated maximum of 12% last year, but another significant change is taking place.
The Federal Government's Payday Superreforms are scheduled to commence from 1 July 2026.
Under the new system, employers will be required to pay superannuation contributions at the same time employees are paid, that is, weekly, fortnightly or monthly. This replaces the current quarterly contribution model.
What businesses should do now
Ensure your payroll systems and processes are ready to support more frequent superannuation payments, before the legislation takes effect.
Expansion of paid parental leave entitlements
Enhancements to the Paid Parental Leave (PPL) scheme have been announced from 1 July 2026 onwards. For children born or adopted on or after this date:
- Government-funded Parental Leave Pay will increase from 120 days (24 weeks) to 130 days (26 weeks).
- The Government will continue making superannuation contributions on Paid Parental Leave payments, with contributions paid directly into employees' super funds.
While these payments remain government-funded, employers who administer Paid Parental Leave through payroll should be aware of the extended leave periods and ensure internal processes reflect the updated arrangements.
Stay informed
Award updates and pay rate guides are often released progressively. Employers are encouraged to monitor Fair Work announcements and subscribe to Fair Work Ombudsman updates to ensure they receive the latest information as it becomes available.
Taking the time to review payroll systems, remuneration structures and employee communications now will help ensure a smooth transition into the new financial year and ongoing compliance with workplace obligations.
Further questions?
Please contact your Dovetail representative if you would like us to review the rates applicable to your employees, or if you have any questions regarding HR matters.
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