The workplace changes that came into effect on 1 July 2025 bring important updates for employers across Australia. As we enter the 2025/2026 financial year, it’s vital to review your payroll systems, employment agreements, and workplace policies to ensure they comply with the new requirements.
These changes include increases to the national minimum wage and award wages, adjustments to superannuation guarantees, expanded parental leave entitlements, and the introduction of right to disconnect laws for small businesses. Here’s what you need to know and do.
What Has Changed?
Following the Fair Work Commission’s 2024–25 Annual Wage Review, both the National Minimum Wage and minimum award wages increased by 3.5%, effective from the first full pay period on or after 1 July 2025.
Key Rates Now in Place
The updated minimum wage rates include:
- National Minimum Wage: $948 per week / $24.95 per hour
- Adult award minimum wages: Increased by 3.5%
- Junior, apprentice, and supported wages: Increased proportionately
If you haven’t done so already, now is the time to:
- Recalculate your employees’ pay using the updated Pay and Conditions Tool
- Access current pay guides relevant to your industry
- Confirm your employees’ award classification and coverage
Enterprise Agreements
If your workplace operates under an enterprise agreement, ensure that base pay rates are not lower than the relevant award rates. Where award rates exceed enterprise agreement rates, the higher amount must be paid.
Additional Changes You Should Know
- Superannuation Guarantee: The SG contribution rate increased to 12% from 1 July 2025. The maximum quarterly earnings base for SG contributions has been lowered to AU$62,500, down from AU$65,070. Employers only need to contribute SG on earnings up to this cap unless contractual agreements state otherwise.
- Parental Leave Pay: Eligible carers of children born or adopted from 1 July 2025 can now receive up to 24 weeks of Parental Leave Pay. From July 2026, the Australian Taxation Office will contribute superannuation on these payments. Employer-paid parental leave remains exempt.
- Pharmacy Award: Pay rates under the Pharmacy Industry Award increased twice, once from 30 June and again from 1 July 2025, reflecting ongoing adjustments under the Gender Undervaluation Priority Awards Review.
- Right to Disconnect: Starting 26 August 2025, small businesses will be required to comply with right to disconnect laws, which protect employees from unreasonable contact outside work hours.
Other Financial Thresholds and Protections
- The Fair Work Act’s high-income threshold has increased to AU$183,100. Employees earning more than this and not covered by an award or enterprise agreement cannot lodge unfair dismissal claims.
- The value of penalty units remains unchanged at AU$330 per unit.
Employer Action Points
To remain compliant:
- Review and adjust annual salary arrangements to ensure they meet or exceed updated minimum wages and award rates.
- Update payroll systems to reflect the increased wage rates and the 12% superannuation guarantee from the first full pay period after 1 July 2025.
- Confirm enterprise agreement pay rates comply with or exceed award minimums and the national minimum wage.
- Check superannuation contributions for all eligible employees, noting the new quarterly contribution cap.
- Understand how the increased high income threshold affects unfair dismissal rights.
Stay Compliant and Support Your Workforce
If you have not yet updated your pay systems, employee contracts, or payroll processes, now is the time. Don’t forget to provide the updated Fair Work Information Statement to new employees and prepare for the introduction of the right to disconnect laws for small businesses later this year.
If you need assistance reviewing your workplace policies or interpreting award obligations, our team is ready to help you navigate these changes and ensure your business stays compliant.