Employers will need to prepare for payroll changes following the 2026 Annual Wage Review.
The updated minimum wage rates apply from the first full pay period starting on or after 1 July 2026. For many businesses, this means payroll records, employee rates and labour cost forecasts should be reviewed before July pay runs are processed.
The Key Payroll Figures
The 2026 Annual Wage Review includes the following changes:
– National Minimum Wage increases to $26.44 per hour
– Weekly National Minimum Wage increases to $1,004.90
– Modern award minimum wages increase by 4.75%
Why the first full pay period matters
The new rates do not automatically apply from the first calendar day of July for every employer.
Instead, the increase applies from the first complete pay period that starts on or after 1 July 2026.
For example, if a pay cycle starts before 1 July and ends after 1 July, the new rates will generally apply from the next full pay period. This makes payroll timing important, especially for weekly and fortnightly pay cycles.
Payroll areas to review before July
Before processing the first applicable July pay run, employers should review the payroll the following payroll areas:
Employee pay rates
Employees paid at or close to minimum rates may require updated hourly rates or salary calculations.
Employers should confirm which employees are affected and what rate changes need to be applied.
Salary and above-award arrangements
Employees paid above minimum rates may still need to be reviewed.
A salary or above-award arrangement that was sufficient previously may need to be checked again after the minimum wage increase takes effect.
Payroll system settings
Once the correct rates have been confirmed, payroll records should be updated before the applicable pay run is processed.
This may include updates to base rates, allowances, templates, payroll categories or employee records, depending on the payroll system being used.
Employment cost budgets
The increase may affect more than ordinary wages.
Employers may also need to allow for changes to; superannuation, payroll tax, workers compensation estimates, leave accrual values, job costing, labour budgets, cashflow forecasts.
Reviewing these figures early can help reduce surprises during the new financial year.
When to seek additional guidance
Payroll and bookkeeping support can help with the implementation, reporting and cost impact of wage changes.
However, employers should seek guidance from Fair Work, an HR adviser or an employment law specialist where they need specific advice about; award coverage, employee classifications, employment contracts, minimum entitlements, interpretation of award provisions, enterprise agreement obligations.
Having these details confirmed before payroll is processed helps ensure the correct information is applied.
Preparing for the first July pay run
The July 2026 wage increase is a timely reminder for employers to check payroll records before the new financial year pay runs begin.
Employers should confirm the applicable rates, review payroll settings and plan for the broader cost impact of the increase.
For assistance with payroll updates, payroll processing, bookkeeping or employment cost projections, contact our team before your first applicable July 2026 pay run.
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