If you're a manager or small business owner, 1 July 2026 is a date worth circling. Two changes take effect that day, and both have real compliance implications. One affects how much you pay your employees. The other changes how and when you pay their super.
Neither is optional, and both carry penalties if you get them wrong. Here's what you need to know.
The Minimum Wage Is Going Up — By 4.75%
On 2 June 2026, the Fair Work Commission handed down its Annual Wage Review 2026 decision: a 4.75% increase to the National Minimum Wage and modern award minimum rates.
From the first full pay period on or after 1 July 2026, the National Minimum Wage increases to:
- $1,004.90 per week (or $26.44 per hour) for ongoing employees
- $978.10 per week (or $25.74 per hour) for entry-level roles in the first six months of employment
This is the first time the National Minimum Wage has broken the $1,000 per week mark. The increase affects approximately 2.8 million award-reliant employees across Australia, around 21% of the workforce.
Does this affect you?
If any of your employees are paid at or near the minimum rate under a modern award, this is not optional. You'll need to check your pay rates against the new award minimums and update them before the first full pay period that starts on or after 1 July 2026.
"We pay everyone the same flat rate" is not a defence if that rate falls below the new award minimum for someone's classification. The Fair Work Ombudsman can and does investigate underpayments, and back-pay obligations plus civil penalties can get expensive fast.
What to do now:
First, identify which modern award (or awards) apply to your employees. If you're not sure, the Fair Work Ombudsman's Pay and Conditions Tool is the easiest starting point.
Second, compare your current rates against the new minimums. Your payroll software provider may update award rates automatically, but don't assume they will. Check.
Third, if you have employees under the C13 or C14 classifications in certain awards, there's an additional structural adjustment on top of the 4.75%. This is a phased change to the very lowest-paid classifications in the modern award system. Worth checking with the FWO or your payroll provider if you think this applies to you.
Payday Super: The Bigger, Quieter Change
This one's arguably a bigger operational shift than the wage increase, and a lot of employers aren't ready for it.
From 1 July 2026, the way you pay superannuation changes fundamentally. Instead of paying quarterly (with a 28-day window after each quarter ends), you'll need to pay your employees' super at the same time as their wages. The ATO's Payday Super page has the full detail, but here's what matters for day-to-day operations.
Not weekly if you pay monthly. Not monthly if you pay fortnightly. On payday.
And "on payday" doesn't mean you transfer it that day and call it done. The ATO requires that the super contribution is received by the employee's super fund within 7 business days of the pay date. For new employees, you have up to 20 business days for the very first contribution.
Why this matters more than you might think
The old penalty system was self-assessed. If you missed a quarterly payment, you'd need to lodge a super guarantee charge statement yourself, pay a flat $20 admin fee plus 10% annual interest, and the charge wasn't tax deductible.
Under Payday Super, the ATO takes over enforcement. They'll assess the charge automatically, apply daily compounding interest at the general interest charge rate, and add an administrative uplift that can vary based on your compliance history. Penalties sit at 25% or 50% of the unpaid super guarantee charge, depending on whether you've had prior penalties. And unlike before, the charge is tax deductible. That's cold comfort if you're paying it unnecessarily, though.
One more thing: the Small Business Superannuation Clearing House (SBSCH), which many small businesses have used to batch super payments, closes permanently on 30 June 2026. If you've been using it, you need an alternative in place before then.
What's also changing in how super is calculated
It's not just the timing. The way you calculate the super amount changes slightly too.
Currently, super is 12% of ordinary time earnings (OTE). From 1 July 2026, it's 12% of "qualifying earnings" (QE), a new term that also pulls in salary sacrifice contributions and certain other amounts currently counted as salary or wages. The rate stays at 12%, but what you apply it to is a little broader.
Your payroll software should handle this, but again: check before July 1, not after.
What to do now:
Contact your payroll software provider or accountant to confirm they're set up for Payday Super. The transition also requires changes to how you report through Single Touch Payroll (STP), and your provider needs those updates in place before July 1.
If you currently use the SBSCH, you need an alternative payment method organised now. Options include a super clearing house through your payroll software, or paying funds directly via SuperStream.
Review your payroll run schedule to make sure super can be processed and received by the fund within 7 business days of each payday. This matters especially if your current payroll process has manual steps or internal approval delays.
Two Changes, One Deadline
The same date is doing a lot of heavy lifting this year.
From 1 July 2026:
- Every employee paid on a modern award minimum rate needs a pay rise of at least 4.75%
- Every employer needs to be paying super on payday, not quarterly
There's no grace period for either. The Fair Work Ombudsman monitors award compliance actively, and the ATO is taking over super enforcement with an automated system that won't wait for you to self-report.
If you employ people, now is the time to check your pay rates, talk to your payroll provider, and make sure your processes are ready. Two weeks is not a lot of runway.
A Note on General Information
This post is general information based on publicly available guidance from the Fair Work Ombudsman and the ATO as at June 2026. It's not legal or financial advice. Pay rates and super obligations can vary depending on your specific award, enterprise agreement, or individual employment contracts. If you're unsure how any of this applies to your situation, it's worth speaking with a payroll specialist, accountant, or employment law advisor.
Sources:
- Annual Wage Review 2026 — Fair Work Ombudsman
- Annual Wage Review 2026 decision — Fair Work Commission
- Payday Super: New rules starting 1 July 2026 — Fair Work Ombudsman
- About Payday Super — ATO
Ready for the Harder Conversations That Come After?
A pay review or changes to working conditions can sometimes surface underlying performance issues. If you need to manage those conversations properly and follow the process Fair Work expects, the TeamGrid Performance Improvement Plan Template Pack gives you the documentation framework to do it correctly, without starting from a blank page.