How the Fair Work Commission's 2025 Wage Review impacts your business

The Fair Work Commission (FWC) has handed down its 2025 Annual Wage Review decision, confirming a 3.5% increase to both the National Minimum Wage and all modern award minimum wages.

The decision comes off the back of submissions from both worker advocacy groups and employer representatives, with state and federal governments also weighing in. The 3.5% figure is a middle ground between competing submissions. The ACTU had pushed for a 4.5% increase to lift wages in real terms, while employer groups argued for a more modest 2–2.5% rise, citing the challenging economic environment including pressure from international trade conditions like US tariffs.

In making their decision the FWC considered:

• Australia’s economic performance and competitiveness
• Ongoing efforts to address gender-based pay inequity
• Encouraging workforce participation to support social inclusion
• The needs and relative living standards of low-paid workers

One critical point the Commission highlighted was that, despite recent increases, real wages for award-reliant workers have not kept pace with inflation since July 2021. While many businesses have continued to absorb rising costs, employees have still seen a decline in their buying power in real terms.

What this means for your payroll and compliance

If your team includes award-covered employees, your pay rates will need to be updated by 1 July. That includes:

• Updating base rates of pay for all impacted staff
• Reviewing penalty rates, loadings, and allowances, many of which are calculated off base rates
• Making sure your payroll software and time and attendance systems are updated with the new award rates

If you’re using Tanda, your account will update automatically when new award rates are published. But even with automation, it's still good practice to:

• Double-check classification levels for each employee
• Communicate changes clearly to staff, especially if payslips or rostering details are impacted
• Review any staff being paid above award to ensure they're still compliant

We've put together a video outlining what you should expect in your Tanda account when base rates increase.

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Don’t leave it until the last minute

The annual wage review is a predictable part of the employment compliance calendar, but implementing it correctly is crucial.

Take this as your prompt to review your awards, talk to your payroll provider, and make sure you’re ready for the 1 July change.

Need help? Our team can walk you through it. Book in some time to see Tanda's all-in-one solution, including our employment advisory service.

Learn more about the Annual Wage Review on the Fair Work Commission website.