The Fair Work Commission (FWC) has announced a 3.5% increase to the Australian National Minimum Wage and all modern award minimum wage rates, effective from 1 July 2025. As a result, the National Minimum Wage will increase from $24.10 to $24.95 per hour, translating to an annual wage increase of approximately $1,679 per year for a full time employee.
Also from 1 July 2025, the superannuation guarantee will increase from 11.5% to 12%.
The FWC will shortly publish determinations varying all modern awards to reflect the new national minimum wage order.
By 1 July 2025, each business will need to:
- identify the new minimum rates of pay and allowances for all award-covered employees by reviewing the determinations published by the FWC on the 'Awards' page of its website;
- ensure all award-covered employees are paid no less than the new minimum rate of pay for their classification under the applicable modern award; and
- if they pay above-award rates of pay and rely on an award annualised wage arrangement or a contractual set-off to absorb minimum monetary benefits under a modern award, review their arrangements to ensure they remain effective taking into account each employee's days and hours of work in each pay period.
From 1 January 2025, the intentional underpayment of wages or entitlements has been a criminal offence, and prosecution can result in financial penalties, prison time, or both. The maximum penalty for a knowing or reckless contravention relating to an underpayment for a business with less than 15 employees is $990,000 per contravention, and for a business with 15 or more employees, $4,950,000 or 3 times the underpayment amount per contravention.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
