HR Newsletter
May 2026

WHAT'S INCLUDED: 
→ IR INSIGHTS  
→ WAGE INCREASES 
→ FREE MANAGER QUICK GUIDE
→ SNEAK PEEK AT THE LUMINARY LEADERSHIP OUTLOOK: QUEENSLAND 2026

What the Minimum Wage Increase
Means for Your Business

The real impact on your payroll, culture and workforce strategy.

$24.95

Current min. wage/hr
from 1 Jul 2025

3.5% to 6%

Submissions range ACCI to ACTU

1 Jul 2026

Effective date for new rates

At a Glance

Current National Minimum Wage (from 1 July 2025): $24.95/hr or $948/week
Australian Council of Trade Unions seeking: 5%, which would lift the minimum wage to $26.19/hr ($51,761 p.a.)
Australian Chamber of Commerce and Industry seeking: 3.5%
Independent forecasts: 3.25 to 4%, with most commentary pointing to 3.5 to 4%
Current headline CPI (March 2026): 4.6% / underlying CPI: 3.3%
Effective date: first full pay period on or after 1 July 2026
FWC decision expected: early June 2026

Here's What You Need to Know for Your Business

The Fair Work Commission's Annual Wage Review 2026 is underway, with a decision expected by early June 2026. The outcome will take effect from the first full pay period on or after 1 July 2026.

The positions on the table are clear. The Australian Council of Trade Unions (ACTU) has now increased its claim from 5% to 6%, following the release of the Federal Budget, which would lift the minimum wage to $26.45 per hour, or $1,004.88 per week. Other employer groups, including The Australian Chamber of Commerce and Industry (ACCI) are seeking a more moderate increase of 3.5%.

The economic context this year is more challenging than last. Inflation has risen, with headline CPI reaching 4.6% in March 2026, which was above the RBA's target band of 2 to 3%. Underlying inflation (which strips out volatile items like fuel) sits at 3.3%.

The Federal Budget also forecasts headline inflation to reach 5% through the year to the June quarter 2026, largely driven by higher fuel prices and broader cost pressures across the economy. Whichever figure is handed down, the effect will flow through your business in ways that go well beyond a single line on a payslip.

Now is a good time to check your award coverage, employee classifications, payroll settings and salaried arrangements so you are ready to implement any increase from 1 July.

What Increase Should Businesses Plan For?

No one outside the Fair Work Commission knows the exact number yet, but the signals from submissions and recent decisions give us a reasonable working range. The ACTU is asking for 6% and employer groups are pushing for 3.5%. In recent years the Commission has tended to land somewhere between the two positions, weighted toward what the economy can sustainably support.

The last two decisions were 3.75% in 2024 and 3.5% in 2025. The Commission has acknowledged that award wages haven't fully recovered the ground lost to inflation since 2021, which means there's a genuine basis for a higher outcome this year. That said, rising prices also mean the Commission will be cautious about adding further pressure to household costs.

Most commentators are pointing to somewhere in the 3.5 to 4% range as the most likely landing spot. That's our working assumption too.

Our practical advice: Start modelling different wage increase scenarios now so you can understand the likely impact on payroll, margins and pricing, and be ready to implement any changes from the first full pay period on or after 1 July 2026.

Award Rates Move Too

Modern award minimum rates are directly tied to the national minimum wage. A 3.5 to 4% increase lifts every award classification, not just the baseline. If you have staff on awards, every classification needs to be reviewed and updated before 1 July.

The Ripple Effect: What Most Businesses Miss

When the minimum wage goes up, the impact doesn't stop at one line on a payslip. Here's what else moves.

The Flow-On Effect

Wage increases can create pressure beyond minimum award rates, particularly where above-award employees, supervisors or long-serving team members are only slightly ahead of the new minimums. Business owners should consider both compliance and the broader impact on team expectations, retention and labour costs.

Annualised Salaries May Fall Short

Employees on flat annualised salaries are still entitled to award minimums including penalties and allowances. If their rate no longer covers those entitlements post-1 July, you are exposed to underpayment risk, even if that salary looked reasonable last year.

The Cost Is More Than Wages

Superannuation flows from ordinary time earnings, and workers' compensation premiums are often calculated on remuneration. The true cost of a 3.5 to 4% wage movement will be materially higher than the percentage implies for most employers.

What This Means for Business Strategy

Businesses that treat this as a payroll admin task will miss the broader workforce implications.
Higher labour costs may require revisiting pricing, workforce structure, or operational efficiencies.
If you operate across multiple awards or industries, the complexity multiplies. A single review approach won't suffice.
Wage growth is projected by both the RBA (3.0%) and Treasury (3.25%) to moderate into 2026-27, but minimum wage decisions have consistently exceeded these forecasts in recent years.
The gender undervaluation review has already triggered staged increases in some awards from 1 April 2026 (health, care, pharmacy sectors). If your workforce includes these award classifications, those changes apply now, separate from the July AWR outcome.
Proactive communication on wage changes supports retention and engagement during cost-of-living pressure.

Action Items for Your Business

Please see our exclusive Manager Quick Guide for action items before 1 July.

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Need support before 1 July?

Our team can help you work through your award obligations, review your employment arrangements and prepare your managers for the change.

Get in touch now so we can plan ahead before these
changes take place.

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A sneak peek at

Luminary Leadership Outlook: Queensland 2026

Luminary is conducting Queensland's first dedicated leadership insights initiative, speaking directly with the state's most senior leaders about what's really on their agenda.

Here’s a sneak peak at a few of the things leaders are saying.

Most describe their organisation's culture trajectory as fragile, in active transition, or declining. Fewer than four in ten describe it as improving with genuine momentum.

Regulatory and compliance demands are actively competing with or crowding out strategic leadership priorities for a significant share of contributors.

Leaders expect AI to significantly or considerably reshape their workforce, but most say their organisations are not yet equipped with the leadership capability to guide people through it. Fewer than one in ten feel genuinely ready.

Succession planning is a consistent gap. Patchy or limited planning is the norm, not the exception. Less than one in ten describe planning as very robust.