Minimum Wage Increase: What It Means for Millions of Australian Workers

From 1 July 2025, the National Minimum Wage will rise to $948 per week, or $24.95 per hour, following the Fair Work Commission’s Annual Wage Review. The increase of 3.5% applies not only to the national minimum wage, but also to all modern award minimum rates, which directly affect around one in five Australian workers.

According to the Commission’s published reasons, the real value of minimum and award wages has fallen by 4.5 percentage points since mid-2021. This erosion in wages hit low-paid workers hardest, squeezing household budgets and pushing living costs further out of reach. Many of those affected work in sectors like hospitality, retail, aged care, disability support, and other frontline roles. They’re also disproportionately female, part-time, casual, and more likely to rely entirely on award rates.

The Commission made it clear that if it failed to act now, the damage to real wages could become permanent. It warned of an “entrenched” decline in living standards for low-paid workers if modern award rates were left stagnant for another year. The 3.5% increase doesn’t fully reverse the years of wage suppression, but it does restore some purchasing power. While business lobby groups had pushed for no more than a 2.5% increase, unions and worker advocates urged the Commission to go further to recover ground lost to inflation.

Ultimately, the Commission concluded that the increase was economically sustainable. It cited stable employment growth, low unemployment, and reasonably healthy business conditions. It also noted that productivity issues — particularly in sectors with large public investment like healthcare — wouldn’t be fixed by continuing to suppress wages.

This decision affects millions of employees, many of whom will see a tangible boost to their weekly income. Workers who suspect they’re not receiving the updated award rate from 1 July should raise it with their employer and seek advice.