New minimum pay rates take effect from the first full pay period on or after 1 July 2025. This means the new rates do not apply from 1 July itself unless your pay period starts on that date.
For example, if your weekly pay period runs from Monday to Sunday and 1 July 2025 falls on a Tuesday, the new rates will apply from Monday 7 July 2025, as this is the first full pay period starting after 1 July. Any hours worked before that date must still be paid at the old rate.
This approach helps ensure a smooth and consistent payroll transition, as only one rate applies across the full pay period. Employers should check the start of their pay cycle to confirm when the new rates need to be applied.
Each year, the Fair Work Commission publishes updated modern award pay guides that reflect the annual national minimum wage increase. Follow this link and then search for the pay guide for the relevant Award from the list – https://www.fairwork.gov.au/pay-and-wages/minimum-wages/pay-guides. Please note that other Fair Work tools, such as P.A.C.T will be updated from 1 July 2025.
We encourage you to locate the updated pay guide for your Award and update wage and allowance rates for each of your employees so that you’re ready to apply the new rates from the correct date.
Annualised Salaries:
If you have Award-covered employees on annualised salary arrangements, you must review and recalculate your forecasts to ensure the annualised amount still covers the applicable entitlements (including overtime and penalty rate assumptions) under the updated Award rates.
If the figures no longer align due to the wage increase, you’ll need to issue an updated Annualised Salary Schedule to affected employees.
Above-Award Pay Rates:
If you pay an employee above the Award minimum, it’s important to confirm that the new Award rates don’t now exceed what you’re currently paying. Regular reviews ensure you’re maintaining legal compliance and avoiding underpayment risk.
Superannuation Increase – Reminder:
The Superannuation Guarantee will increase from 11.5% to 12% from the first pay period that occurs in July 2025. The 12% rate will need to be applied for all salary and wages paid to eligible workers on and after 1 July. This is even if some or all of the pay period it relates to is before 1 July.
If you have any questions about these changes or need support implementing them within your business, please don’t hesitate to get in touch. We’re here to help you navigate these updates smoothly.
Need Advice?
ER Strategies are experts in employment compliance and can assist you in managing your employment compliance responsibilities. To discuss your obligations and assistance we can provide, get in touch with us at 1300 55 66 37, or click the button below.
