Annual Wage Review 2024–25: The 3.5% Increase
10 mins read
Published Jul 1, 2025
Following the Fair Work Commission's annual review, the National Minimum Wage and all modern award minimum wages (including Hospitality, Retail, and Building & Construction awards) increased by 3.5%. This adjustment is a "base-level" update for all payroll engines to ensure no employee is paid below the new statutory floor. For the General Retail Industry Award, this pushed the Level 1 adult rate to $26.07 per hour.
The Change
Effective from the first full pay period on or after 1 July 2025, the Fair Work Commission (FWC) mandated a 3.5% increase to both the National Minimum Wage and all modern award minimum wages. This adjustment impacts the majority of the hospitality, retail, and construction sectors. For instance, in the General Retail Industry Award, the hourly rate for a Level 1 adult moved to approximately $26.07. This follows a multi-year trend of significant increases designed to keep pace with the cost of living.
Implications for SMB Owners
For small and medium businesses, this isn't just a 3.5% increase in base pay; it is a compounding cost. When base rates rise, so do overtime, penalty rates, and leave loading, all of which are calculated as percentages of that base. For a hospitality venue running on tight margins, a sudden jump in the cost of a Friday night shift can be the difference between profit and loss.
The primary risk for SMBs is "set-and-forget" payroll. If your software isn't updated precisely on the first pay cycle of July, you are immediately non-compliant. Historical audits show that even a one-week delay in applying these increases can result in thousands of dollars in back-pay liabilities and potential Fair Work Ombudsman (FWO) scrutiny.
