The Fair Work Commission (FWC) today handed down its decision in the Annual Wage Review 2024–25, announcing an increase to the National Minimum Wage and minimum award wages.
From 1 July 2025, the National Minimum Wage will rise by 3.5%, taking the weekly full-time minimum wage to $948.00, or $24.95 per hour. This increase will also flow through to base rates of pay in modern awards, with all award minimum wages increasing by the same percentage.
Together with the Australian Chamber of Commerce and Industry, Business Chamber Queensland called for a fair, reasonable, responsible and sustainable minimum wage increase of 2.5% to account for both the need for the annual review to the minimum wage and the compounding impact on businesses and employers.
In delivering the decision, the Commission acknowledged the ongoing challenges faced by both employees and employers, including inflationary pressures, productivity shifts, and economic uncertainty. The outcome aims to strike a balance between maintaining the real value of wages for low-paid workers and supporting large and small business viability and employment growth.
What the 2025 Annual Wage Review means for employers
Employers must ensure from the first full pay period from 1 July 2025, all employees are paid at or above the new minimum wage or their applicable modern award rate. This includes reviewing and updating payroll systems, employment contracts, and budgeting forecasts to accommodate the increase.
Businesses with enterprise agreements should check the terms of their agreements against the increase to ensure compliance.
6 tips for implementing the increase:
1. Keep your employees in the loop
Open and honest communication can help build trust in a business. For employees who will have a pay increase or change, we recommend you inform them ahead of the first full pay after 1 July 2025.
2. Check your employee details
Ask all your employees to check their details in your HRIS/Payroll system to ensure they are up to date.
3. Determine whether you have to do a manual upload or if the increase is automatically applied
If you are using a payroll system, ask the provider if they will have the pay rates automatically updated in the system or if you will need to manually update the rates yourself.
4. Consider the impact of wage increases
The minimum wage rate increase will apply to those employees that are either on the minimum wage, or close to the minimum wage. This means if you are paying your employees above the minimum wage, you may need to look into any over award or salaried arrangements to determine whether the increase can be absorbed, or whether the increase is to be passed on.
5. Check your calendar
New minimum wage rates apply to the first full pay after 1 July 2025.
If you have a payroll spanning over 1 July 2025 you will need to pay the increased minimum wage from the next full pay period.
For example:
If the last payroll before 1 July 2025
- starts: 30 June 2025, and
- ends: 13 July 2025
then the first full pay period on or after 1 July 2025
- starts: 14 July 2025
- ends: 27 July 2025
and the increase won’t need to be paid until the payroll for that new fortnight.
It is always best practice to ensure you check your first pay run has been processed properly and quickly address any errors that may have occurred.
6. Makes allowances (and penalty rates, loadings)
Don’t forget to update your allowances, deductions, penalties, and any other separately identifiable amount. It isn’t just the minimum hourly rate that will be updated in the Modern Awards, it will be all of the other monetary amounts that are based on that increase rate.
How can Business Chamber Queensland help?
If you need support in reviewing wages, applying increases and interpreting agreements, our Workplace Advisory team can help.
Our Workplace Advisory team provides insight, support and resources to guide you in making informed business decisions, helping you avoid issues around workforce management including overpayment or underpayment. Business Chamber Queensland Business Essentials and Business Evolve members can make unlimited calls to our Workplace Services Hotline for Human Resources support. Plus, all Business Chamber Queensland members can access Workplace Consulting Services at discounted rates.
