Digging Deeper

What the Fair Work Commission decided

The Fair Work Commission handed down its 2026 Annual Wage Review on 2 June 2026. The decision lifts modern award minimum rates by 4.75 per cent. It lifts the National Minimum Wage to $26.44 an hour, up from $24.95. In weekly terms, the floor moves from $948.00 to $1,004.90.

The minimum wage increase applies from the first full pay period starting on or after 1 July 2026. So if your pay week starts on a Wednesday, the new rates apply from Wednesday 1 July. The date depends on your pay cycle, not the calendar month.

The Commission set two reference points worth noting:

• The lowest ongoing award rate must be at least $1,004.90 a week, or $26.44 an hour.
• The entry rate for the first six months of employment must be at least $978.10 a week, or $25.74 an hour.

The casual loading stays at 25 per cent for award and agreement-free employees. The Commission also began phasing out its lowest ongoing classification, lifting it toward the next rate up. Lower-paid classifications therefore see slightly larger movements than the headline figure.

The Commission described this year’s decision as unusually complex. Inflation ran higher than forecast, at 4.2 per cent in the year to April. The Reserve Bank kept monetary policy tight. Conflict in the Middle East added uncertainty to the outlook. The panel weighed those pressures against the living standards of the lowest-paid workers.

The result sits above inflation but below the 6 per cent the unions sought. Employers had argued for 2 to 3.9 per cent. The 4.75 per cent outcome is larger than last year’s 3.5 per cent. For an award-reliant practice, that is a real and immediate cost.

Why allied health feels this more than most

Most small businesses can respond to a wage rise by adjusting prices. An allied health practice often cannot. A large share of your revenue is set by schedule fees and rebates that you do not control.

When the minimum wage increase lifts your wage costs, your Medicare, NDIS, DVA, WorkCover and CTP income does not follow. Those rebates move on their own timetables, and rarely at the same pace. The result is a margin squeeze that hits care-based businesses harder than retail or trades.

There is a second pressure building underneath the annual rise. The Fair Work Commission has found gender-based undervaluation in several care and health awards. Minimum rates in those awards are increasing in stages, on top of the usual July adjustment.

Community pharmacy is one example. Pharmacist classifications under the Pharmacy Industry Award are rising in three phases, with the next increase from 30 June 2026, before the general July rise applies. The Children’s Services Award also has a separate increase from the first full pay period on or after 30 June 2026.

If you run a pharmacy, an early learning service, or a practice covered by the Health Professionals and Support Services Award, you may face a staged structural increase as well as the annual one. Plan for both, not just the headline number.