New Minimum Wage has gone up: what it means for employers and their payroll
The National Minimum Wage has changed, which means it's time to update your employee records in your payroll system. Here's how.
by Aurion People & Payroll Solutions
The Fair Work Commission has just announced a 3.5% increase to the National Minimum Wage, effective from 1 July 2025. For Australian businesses, this means it’s time to review payroll settings, update employee records, and ensure compliance with the new rates.
Here’s what’s changing:
- Hourly rate: Up by $0.85 to $24.95
- Weekly rate (based on a 38-hour week): Up by $32 to $948 per week
- Annual increase: up to $1,700
This decision follows the Government’s recommendation to deliver a real wage increase for award workers. With inflation currently sitting at 2.4%, the 3.5% rise represents a real wage increase of 1.1%.
Close to 20% or one fifth of the Australian workforce are currently paid in accordance with the National Minimum Wage award rate. These workers are often in sectors like hospitality, retail and administration, with many in a part-time or casual capacity.
What does this mean for employers and their payroll?
This is essential for payroll professionals and business owners to get right. As the risk of non-compliance with this updated wage review could result in underpayments, compliance risks, and reputational damage.
It is the responsibility of employers to ensure compliance with this award increase within their payroll system, for employees who are paid with this award rate. With End of Financial Year (EOFY) approaching, now is the time to review the existing award classifications within your payroll system and ensure that they are ready to be applied from 1 July 2025.
This review can be an additional item on your EOFY Payroll Processing Checklist. If you haven’t already, check out our very own Aurion checklist curated by our experts to get you started.
Putting the new Minimum Wage increase into action, what’s next?
The new rates come into effect on 1 July 2025, so now’s the time to:
- Review your employee classifications and awards
- Update your payroll system or speak to your provider
- Communicate changes to your team, including confirmation that they can expect to see this increase reflected in their pay from the commencement date
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