Australia’s lowest-paid workers are set to receive a welcome pay rise, with the Fair Work Commission announcing a 3.5% minimum wage increase effective July 1, 2025. The decision is a significant step to help workers keep up with living costs in a cooling inflationary environment.
What’s Changing?
- New hourly rate: Rising from $24.10 to $24.95
- New weekly rate: Based on 38 hours — $948.00/week
- Annual earnings: Approximately $49,296/year
- Who it affects: Over 2.6 million workers in retail, hospitality, aged care, and other award-reliant industries
This is more than just a pay bump — it marks a real wage gain of 1.1% after accounting for inflation, a rare moment in recent years.
Why Now?
Australia’s inflation rate has now eased to 2.4%, back within the Reserve Bank’s target range. This allowed the Fair Work Commission to push for a wage increase that not only catches up with inflation but offers a real improvement in purchasing power.
Justice Adam Hatcher, President of the Commission, said the goal is to avoid locking low-wage workers into declining living standards as the broader economy stabilizes.
Mixed Reactions Across Australia
Worker support: Unions say this helps workers recover from years of wage stagnation and rising costs. It’s being hailed as a long-awaited relief.
Business concerns: However, small business groups are warning that a 3.5% increase could put pressure on already tight margins, possibly impacting hiring decisions.
What Else Is Changing?
Alongside the wage rise, the superannuation guarantee will increase to 12%, further boosting long-term benefits for employees.
When Does It Start?
The new rates begin from the first full pay period on or after July 1, 2025. Employers are advised to review payroll systems and ensure compliance with new award conditions.
This wage update is more than a number — it’s a signal of where Australia is heading post-inflation crisis. As global economies cool and costs level out, Australia appears to be making a strong move toward restoring wage fairness and household stability.
