Annual Wage Review 2026: Payroll and Cost Checklist Before 1 July

• Payroll
• Small Business

Australia’s 2026 Annual Wage Review is now a payroll setup job for small employers. Fair Work says the National Minimum Wage and minimum award wages increase from the first full pay period starting on or after 1 July 2026, so the practical task is to check which workers are affected before the first July pay run is approved.

For small businesses, this is not only a rate-table update. It affects award classifications, enterprise agreement checks, rosters, payslips, PAYG withholding settings, super calculations, payroll reports and labour-cost budgets. If your team is award-reliant, casual-heavy or paid close to minimum rates, the first July pay run deserves a proper pre-flight check.

Treat the wage review as a pay-run readiness check: confirm coverage, update rates, test the first July cycle and keep evidence of what changed.

Quick answer

The Fair Work Ombudsman’s 2026 Annual Wage Review update says the National Minimum Wage will be $1004.90 per week or $26.44 per hour from the first full pay period on or after 1 July 2026. Minimum award wages increase by 4.75%, subject to extra floor-rate changes for the lowest ongoing and entry-level classifications.

That distinction matters. Do not treat the decision as one universal 4.75% raise for every worker. Use the official updated rate for the employee’s award, classification, employment type and pay cycle.

If you employ staff in Australia, check each employee’s award, classification, agreement coverage and current base rate before the first full pay period that starts on or after 1 July 2026. Do not assume every employee gets the same simple percentage change, because enterprise agreements, above-award rates, junior rates, apprentices, trainees, allowances and low-classification adjustments can change the answer.

Key points

• The new rates apply from the first full pay period starting on or after 1 July 2026.
• The National Minimum Wage becomes $1004.90 per week or $26.44 per hour.
• Minimum award wages increase by 4.75%, with special low-classification floor changes.
• Enterprise agreement base rates still need checking against the relevant award.
• Labour-cost budgets, rosters and pay-run approvals should be reviewed before the first July cycle.
• The ATO’s 2026 PAYG withholding tables also apply from 1 July 2026, so payroll should be checked as a whole.

What changed in the 2026 wage review

The wage review result has two main payroll effects: one for award-free employees covered by the National Minimum Wage, and one for employees covered by modern awards.

The safe payroll habit is to use the updated award or official pay tool when it is available, then keep a note of the award, classification, rate, effective pay period and reviewer.

Who needs to be checked

Start with the workers most likely to be affected:

1. Employees paid at or near minimum award rates.
2. Casual employees whose base rate, casual loading, penalty rates or allowances flow from an award rate.
3. Juniors, apprentices, trainees and entry-level employees.
4. Employees under enterprise agreements where the base rate may sit close to the relevant award floor.
5. Salaried employees whose annualised salary is meant to cover award entitlements.
6. New employees starting close to 1 July 2026.

If someone is already paid well above the updated minimum, the wage review may not force a base-rate increase. But you should still document the review, because underpayment risk often comes from assuming an old classification, loading or allowance still works.

Where the cost pressure usually shows up

The wage review can affect more than the employee master file. For many small employers, the pressure appears in rosters, quote margins, weekend shifts, casual loadings and the first payroll report after July.

Use the payroll update to review the cost drivers before shifts are worked or invoices are quoted.

What to update before the first July pay run

Use the wage review as a payroll controls exercise, not a last-minute spreadsheet fix.

The ATO’s 2026 PAYG withholding tax tables say all withholding schedules and tax tables are being updated and apply from 1 July 2026. That makes July 2026 a good time to review gross pay, withholding, super and net pay together rather than treating wage rates and tax tables as separate jobs.

Common confusion: 1 July is not always the pay-run start

The wage review start rule is easy to miss. The new rates apply from the first full pay period starting on or after 1 July 2026.

If a weekly pay cycle starts on Wednesday 1 July 2026, the new rates apply from that cycle. If a weekly pay cycle runs Monday to Sunday, 1 July 2026 falls in the middle of the week, so the new rates apply from Monday 6 July 2026.

That timing matters for timesheets, payslips, payroll journals and employee questions. Make the effective date visible in your payroll notes so the pay run can be reviewed later.

Simple example

Imagine a cafe pays employees weekly from Monday to Sunday. The 2026 wage review rates start on or after 1 July 2026, but Wednesday 1 July falls in the middle of that cafe’s weekly cycle. The owner reviews the award rates before July, then applies the new rates from the next full weekly cycle starting Monday 6 July 2026. The first July payslip still needs a clear check, because some hours may sit before the new rate starts and later hours may sit in the new cycle.

Records to keep

Good payroll records turn the wage review from a vague compliance worry into a clear audit trail. For each affected worker, keep:

• the award or agreement checked
• the classification and employment type
• the old rate and new rate
• the first full pay period using the new rate
• any linked pay items updated, such as casual loading, penalties, overtime or allowances
• who reviewed and approved the change
• a sample payslip or payroll report after the first updated pay run

This is especially important where a worker is paid above the minimum. If the business decides no rate change is required, document why the current base rate remains above the relevant award floor.

How Gimbla can help with the July payroll check

In Gimbla, payroll and accounting records sit close together, so July wage changes can be reviewed across employee records, timesheets, pay runs, payslips, STP, super and reports.

Useful workflow links:

• Create an employee before the first live pay run.
• Timesheet add and approve before payroll is processed.
• Register software ID for the ATO connection step.
• PAYG Withholding for the tax withheld from employee pay.
• Superannuation Guarantee for employer super on eligible earnings.
• Free payroll software in Australia if you are comparing payroll tools before July.

The practical goal is simple: the payroll record, employee payslip, bank payment, PAYG withholding, super calculation and accounting reports should all tell the same story.

Payroll checklist before 1 July 2026

Use this checklist before approving the first full July pay run:

1. List every employee and their pay cycle.
2. Confirm award, classification, employment type and agreement coverage.
3. Check whether the employee is paid at, near or above the updated minimum rate.
4. Update base rates and linked pay items.
5. Check PAYG withholding tables and employee tax settings.
6. Check Superannuation Guarantee calculations and payroll cost budgets.
7. Review the first updated draft pay run before payment.
8. Issue payslips and keep the rate-change evidence.
9. Compare payroll reports with bank payments and accounting journals.
10. Ask your accountant, BAS agent or workplace adviser for help if award coverage or agreement interaction is unclear.

Frequently asked questions

What is the 2026 Annual Wage Review increase?

Fair Work says minimum award wages increase by 4.75%, with the National Minimum Wage becoming $1004.90 per week or $26.44 per hour from the first full pay period on or after 1 July 2026.

When do the new 2026 minimum wage rates start?

The new rates apply from the first full pay period starting on or after 1 July 2026. For a Monday to Sunday weekly pay cycle, the new rates start on Monday 6 July 2026 because 1 July falls mid-cycle.

Do enterprise agreement employees need to be checked?

Yes. Fair Work says a base pay rate in an enterprise agreement cannot be less than the relevant award base pay rate. Employers with agreements should compare the agreement base rates with the updated award floor.

Is the National Minimum Wage increase the same as the award wage increase?

Not exactly. Fair Work lists the new National Minimum Wage as $1004.90 per week or $26.44 per hour. It also says minimum award wages increase by 4.75%, provided the lowest ongoing award rates and short entry-level rates meet the published floor amounts. For payroll, the safe answer is to check the official rate for the employee’s actual award and classification.

What should small employers update before July payroll?

Check award coverage, classifications, payroll rates, labour-cost budgets, tax tables, payslips, STP settings, super calculations and payroll records before the first full pay period starting on or after 1 July 2026.

In short

The 2026 Annual Wage Review gives Australian small employers a concrete July payroll task. Check who is affected, apply the new rates from the first full pay period on or after 1 July 2026, update connected payroll settings and keep records that show how each decision was made.