The Fair Work Commission (FWC) has today announced a 3.5% increase to the national minimum wage and all modern award minimum wage rates.
The new national minimum wage will be $948.00 per week or $24.95 per hour. This constitutes an increase of $32.10 per week to the weekly rate or $0.85 per hour to the hourly rate.
The increases will take effect from the first full pay period on or after 1 July 2025.
The FWC stated that the primary consideration for its decision was that, since 2021, the proportion of the workforce that is reliant on modern award wages (around 20.7%) have suffered a reduction in the real value of their wages, due to the spike in inflation from 2021 to 2022, even in light of the 3.75% increase awarded in last year’s review.
The FWC’s position was that prior wage increase decisions “deferred” action on these inflationary spikes. Now that inflation has returned to the Reserve Bank’s target range, the FWC has taken the opportunity to attempt to correct the value of modern award wages before the value loss, and consequent effects on living standards, becomes entrenched.
The FWC said that business conditions have remained reasonably healthy, with profit margins generally maintained at approximately pre-pandemic levels.
The FWC also took into account the upcoming increase to the superannuation guarantee contribution amount, which will be 12.0% from 1 July 2025. This was a factor in restraining the increase, together with poor productivity growth (largely in non-market sectors), uncertainty in relation to United States trade policy, and weaknesses in the accommodation and food services sector.
Finally, the FWC confirmed it would continue with its review of award classifications to address concerns on the undervaluation of certain work for gender-related reasons, following on from its major decision on 16 April 2025 (see our article for more details).
