On 3 June 2025, the Fair Work Commission’s Expert Panel handed down its decision following the 2024–25 Annual Wage Review. As a result, both the National Minimum Wage and modern award minimum wages will increase by 3.5%, effective 1 July 2025. View the official announcement.
While the increase provides welcome relief for employees amidst persistent cost-of-living pressures, it also presents a new challenge for many small business owners from a cost and cashflow perspective.
What are the new minimum wage rates?
The 3.5% increase will result in the following adjustments to the National Minimum Wage:
- Hourly rate: Increasing by $0.85 to $24.95
- Weekly rate (38 hours): Increasing by $32.10 to $948.00
- Annual salary equivalent: Increasing by $1,669.20 to $49,296.00
What’s the impact on your business?
For businesses employing team members at or near the minimum wage, these changes will result in a direct increase to payroll costs.
For example, if you currently employ 20 staff at the minimum wage and pay wages fortnightly, your payroll costs will increase from $36,636 to $37,920 — an additional $1,284 per pay cycle. This figure excludes superannuation, leave entitlements, payroll tax (where applicable), and other employment costs.
What should employers do now?
Business owners should assess the financial impact of these changes and take steps to ensure adequate budgeting and cashflow planning. This may include:
- Updating payroll systems and budgeting tools
- Reviewing pricing models to maintain margins
- Assessing potential cost-saving measures or operational efficiencies
- Communicating with affected staff
If you’re concerned about how this increase may affect your business’s payroll obligations and financial position, please get in touch with our team. We can help you forecast the impact of the wage rise, assess your payroll liabilities, and develop strategies to manage the transition efficiently.
