The Fair Work Commission’s Annual Wage Review 2024–25 decision, handed down on 2 June 2025, sets new pay rates that take legal effect from the first full pay period on or after 1 July 2025. The decision raises both the National Minimum Wage and all modern award minimum rates of pay by 3.75%. For the 2025–26 financial year, the National Minimum Wage moves to $24.10 per hour, or $915.90 per 38-hour week before tax, up from $882.80 per week in 2024–25. The increase applies to an estimated 2.6 million employees whose pay is set by a modern award, plus approximately 175,000 employees reliant on the National Minimum Wage who are not covered by an award or registered agreement.
The 2025 determination arrives in a period when the Consumer Price Index rose 3.6% over the twelve months to the March 2025 quarter (Australian Bureau of Statistics, 24 April 2025). The Commission’s Expert Panel noted that while inflation has moderated from its 2022 peak, cost-of-living pressures remain acute for low-paid households. The 3.75% uplift delivers a real wage increase of approximately 0.15 percentage points above headline inflation, consistent with the Panel’s statutory obligation to maintain a safety net that meets the needs of the low-paid while considering broader economic conditions. Employers must update payroll systems, and employees should check their first pay slip after 1 July 2025 to confirm the new rate has been applied. Underpayments attract penalties under the Fair Work Act 2009, and the Fair Work Ombudsman conducts proactive audits in high-risk sectors such as hospitality, retail, and horticulture.
National Minimum Wage and Award Coverage
Who Receives the National Minimum Wage
The National Minimum Wage applies to employees who are not covered by a modern award or an enterprise agreement. This cohort includes some casual workers, junior employees, apprentices, and trainees, though their base rates are calculated as a percentage of the adult National Minimum Wage. From 1 July 2025, the adult full-time weekly rate is $915.90, and the hourly rate is $24.10. Casual employees covered by the National Minimum Wage receive an additional 25% casual loading, lifting their minimum hourly rate to $30.13. The casual loading compensates for the absence of paid leave entitlements and is paid on top of the base rate for each ordinary hour worked.
Modern Award Increases
All 121 modern awards receive the same 3.75% percentage increase. Each award contains classification levels with corresponding minimum hourly and weekly rates. For example, the General Retail Industry Award 2020 Level 1 rate moves from $24.73 per hour to $25.66 per hour. The Hospitality Industry (General) Award 2020 Level 2 (cook grade 1) rises from $25.31 to $26.26 per hour. The Clerks—Private Sector Award 2020 Level 1 increases from $24.56 to $25.48 per hour. Employers must consult the updated pay guide for their specific award, published on the Fair Work Ombudsman website by 1 July 2025. The Fair Work Commission’s decision document ([2025] FWCFB 3500, 2 June 2025) contains the full schedule of adjusted rates.
Junior, Apprentice, and Trainee Rates
Junior employees under 21 years of age receive a percentage of the adult rate, scaled by age. The percentages are set in each modern award and do not change with the Annual Wage Review; only the underlying adult rate changes. For a 17-year-old retail worker under the General Retail Industry Award, the junior percentage is 60%, yielding $15.40 per hour from 1 July 2025. Apprentice and trainee rates are typically expressed as a percentage of the relevant trade or classification rate and increase proportionally. Employers must apply the new base rates to calculate correct junior and apprentice pay from the first full pay period on or after 1 July 2025.
Compliance and Enforcement
Employer Obligations
Employers must pay at least the applicable minimum rate for every ordinary hour worked. Paying below the minimum rate, even by agreement with the employee, is unlawful under section 45 of the Fair Work Act 2009. The obligation extends to pieceworkers, who must receive at least the minimum hourly rate for each hour worked under a piecework arrangement, as clarified by the Fair Work Commission’s Horticulture Award determinations. Employers are required to keep accurate time and wages records for seven years and issue pay slips within one working day of pay day. Pay slips must show the rate of pay, gross and net amounts, any loadings or penalties, and the superannuation contribution.
Fair Work Ombudsman Audits and Penalties
The Fair Work Ombudsman prioritises compliance in sectors with high proportions of migrant workers, international students, and temporary visa holders. In the 2024–25 financial year, the Ombudsman recovered $509 million in underpaid wages for 251,000 workers (Fair Work Ombudsman Annual Report 2023–24, tabled October 2024). Common breaches include failure to pass on annual wage increases, underpayment of casual loading, and misclassification of employees as independent contractors. Maximum civil penalties for serious contraventions under the Fair Work Act are $939,000 per contravention for body corporates and $187,800 for individuals, as indexed from 1 July 2024. The Australian Government’s 2024 criminalisation of wage theft under the Fair Work Legislation Amendment (Closing Loopholes) Act 2024 means intentional underpayment can now attract criminal sanctions, including imprisonment for up to 10 years and fines up to $7.825 million for companies.
Visa Holder Protections
Temporary visa holders, including international students on Subclass 500 visas and working holiday makers on Subclass 417 or 462 visas, have the same workplace rights as Australian citizens and permanent residents. The Fair Work Ombudsman’s Assurance Protocol for visa holders provides that a visa holder who reports workplace exploitation will not have their visa cancelled for breaching work-related visa conditions, provided they meet eligibility criteria. This protocol, formalised in a memorandum of understanding between the Fair Work Ombudsman and the Department of Home Affairs dated 6 November 2023, applies to minimum wage underpayment complaints. International students must still observe their visa work limitation of 48 hours per fortnight during study periods, but hours worked in breach of this condition do not excuse an employer from paying the full minimum wage.
Superannuation and the Super Guarantee Rate
Super Guarantee Increase from 1 July 2025
The superannuation guarantee rate rises to 12.0% of ordinary time earnings from 1 July 2025, the final step in the legislated incremental increase from 9.5% that began on 1 July 2021. Employers must contribute 12.0% on top of the employee’s ordinary time earnings, provided the employee earns $450 or more in a calendar month. The $450 monthly threshold was removed from 1 July 2022, meaning super is payable on all ordinary time earnings regardless of the monthly amount. The combined effect of the 3.75% wage increase and the 0.5 percentage point super guarantee increase means total labour costs for award-reliant employees rise by approximately 4.4% from 1 July 2025.
Interaction with Minimum Wage
The National Minimum Wage of $915.90 per week is the gross amount before superannuation. For a full-time employee earning the National Minimum Wage, the employer’s super contribution is $109.91 per week ($915.90 × 12.0%). The total weekly cost to the employer is $1,025.81. Employees should check their super account to confirm contributions are being made at the correct rate. The Australian Taxation Office enforces super guarantee compliance and can issue director penalty notices for unpaid super. Employees can report unpaid super to the ATO via the online tool on the ATO website.
Tax, Medicare Levy, and Take-Home Pay
Withholding Tax Tables
The Australian Taxation Office publishes updated tax withholding schedules to align with the new financial year. For the 2025–26 income year, the tax-free threshold remains at $18,200. A full-time National Minimum Wage earner on $915.90 per week has an annualised gross income of $47,626.80. Applying the 2024–25 resident tax rates (which continue for 2025–26 unless legislated otherwise), the weekly tax withheld is approximately $99, comprising income tax of $83 and Medicare levy of $16. The net weekly pay is approximately $816.90 before any salary sacrifice or HELP debt repayments. The ATO’s tax withheld calculator, updated by 30 June 2025, provides precise figures based on individual circumstances including residency status, HELP debt, and Medicare levy surcharge liability.
Medicare Levy and Surcharge
The Medicare levy remains at 2.0% of taxable income. Low-income earners may qualify for a full or partial reduction. The 2025–26 Medicare levy low-income threshold for singles is expected to be indexed to approximately $26,000. The Medicare levy surcharge of 1.0%, 1.25%, or 1.5% applies to singles earning above $93,000 (2024–25 threshold, subject to indexation) who do not hold an appropriate level of private hospital cover. Temporary visa holders enrolled in Medicare under a Reciprocal Health Care Agreement or through a Subclass 482 or 485 visa condition should confirm their Medicare levy liability, as some visa subclasses are exempt.
Practical Steps for Employees and Employers
Five Actionable Steps
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Check the first pay slip after 1 July 2025. Confirm the hourly rate matches the updated award or National Minimum Wage rate. For casuals, verify the 25% loading is calculated on the new base rate. Pay slips must show the rate of pay; if it does not reflect the increase, raise the matter with the employer in writing.
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Verify superannuation contributions. From 1 July 2025, super must be paid at 12.0% of ordinary time earnings. Check the myGov ATO portal or the super fund’s app to confirm the correct amount is deposited quarterly. The ATO requires super guarantee contributions to be received by the fund by the quarterly due date: 28 October, 28 January, 28 April, and 28 July.
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Use the Fair Work Ombudsman’s Pay and Conditions Tool. The online tool (calculate.fairwork.gov.au) is updated by 1 July each year. Enter the award, classification, age, and employment type to verify the minimum hourly rate, penalty rates, and overtime entitlements. This tool provides a record that can be saved or printed.
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Report underpayment without delay. Contact the Fair Work Ombudsman on 13 13 94 or submit an online enquiry. Employees on temporary visas can request referral to the Assurance Protocol team. The Fair Work Ombudsman can issue compliance notices, commence litigation, and seek court-ordered back-pay plus interest. The statutory limitation period for recovering underpayments is six years from the date the underpayment occurred.
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Update payroll systems and employment contracts. Employers using manual or software-based payroll must apply the new rates from the first full pay period on or after 1 July 2025. Employment contracts that specify an hourly rate below the new minimum are ineffective to the extent of the shortfall. Written notification to employees of the rate change is not legally required but is recommended to demonstrate compliance and reduce disputes.