Scale Suite's FY2026-27 wage cost analysis puts the minimum cost of a full-time minimum wage employee at $58,525 a year including superannuation, up $3,314 (6.0%) on last year. That is before payroll tax, workers compensation, leave loading or a single dollar of overhead. Three changes landed together on 1 July 2026: a 4.75% increase to award wages, the first full year of the 12% super guarantee applying to those higher wages, and Payday Super, which permanently changes the cashflow profile of every payroll in the country.
Published: July 2026. Updated July 2026.
The Fair Work Commission's 2026 Annual Wage Review, announced on 2 June 2026, increased modern award minimum wages by 4.75% and the National Minimum Wage by 5.97% from the first full pay period on or after 1 July 2026. The National Minimum Wage is now $26.44 per hour, or $1,004.90 per week, the first time it has passed $1,000 a week. The decision directly lifts pay for roughly 2.8 million award-reliant workers, about 21.1% of the Australian workforce.
A Scale Suite review of the decision alongside ATO and Treasury settings shows the full stack for FY2026-27: the super guarantee holds at 12% (its final legislated rate, reached 1 July 2025), the Fair Work high income threshold rises to $190,100, the unfair dismissal compensation cap rises to $95,050, and from 1 July 2026 employers must pay super at the same time as wages under Payday Super. Use our employee cost calculator to run these settings against your own payroll.
The cleanest way to see the movement is a full-time adult on the National Minimum Wage, 38 hours a week.
FY2025-26: $948.00 per week × 52 weeks = $49,296 in wages, plus 12% super of $5,916, for a total of $55,212.
FY2026-27: $1,004.90 per week × 52 weeks = $52,255 in wages, plus 12% super of $6,271, for a total of $58,525.
The increase is $3,314 per employee, or 6.0%, and that is the floor. Award-reliant staff above the base classification move 4.75%, and every dollar of wage increase drags 12 cents of super with it. For a business with ten award-reliant staff on rates near the minimum, the annual cost increase lands around $30,000 to $35,000 before any of the on-costs that scale with wages: payroll tax where you are over your state threshold, workers compensation premiums, and leave provisions. Our guide to the true cost of hiring an employee in Australia covers the full on-cost stack, which typically adds 25% to 40% above base salary.
The wage increase is visible. The working capital change is not, and for many SMEs it is the bigger number.
From 1 July 2026, super must be paid at the same time as salary and wages rather than quarterly. Under the old quarterly regime, a dollar of super accrued evenly across a 91-day quarter sat with the employer for an average of about 45 days, plus up to 28 more days until the quarterly due date: roughly 73 days of float on the average super dollar. Under Payday Super, contributions must reach the employee's fund within days of each payday [CONFIRM AT PUBLISH: final legislated receipt window, currently 7 calendar days from payday], cutting that average holding period to under a week.
Scale Suite's analysis puts the working capital effect at roughly 18 cents permanently released from the business for every dollar of annual super. The arithmetic is reproducible: (73 days minus 7 days) ÷ 365 = 18.1%.
Worked example: a 20-person business with average wages of $85,000 pays annual super of 20 × $85,000 × 12% = $204,000. Moving from quarterly to payday timing permanently removes about $37,000 of working capital ($204,000 × 18.1%) that previously cycled through the business each quarter. That money now sits in employees' funds earning returns for them, which is the policy intent, but it must come out of your cash buffer in the first year of the transition. If cash is tight, model the transition month by month with our cash flow forecast calculator, and see our full guide to Payday Super in 2026 for the compliance mechanics.
The enforcement side also hardened. The redesigned super guarantee charge under Payday Super escalates with time unpaid and is designed for near-real-time detection through Single Touch Payroll data. The ATO returned $1.1 billion in unpaid super to about 960,000 employees in 2024-25 and has said Payday Super will let it act faster. Late super is no longer a quarterly cleanup job; it is a per-pay-run exposure.
Wage theft is criminal. From 1 January 2025, intentional underpayment of wages or entitlements is a criminal offence. Companies face fines up to the greater of three times the underpayment or approximately $8.25 million; individuals face up to 10 years imprisonment. The 4.75% award increase is exactly the kind of change that creates accidental underpayment when annualised salaries and enterprise agreement rates are not re-tested against the new award floor. Re-run your set-off calculations from the first full pay period after 1 July.
Payroll tax thresholds. State thresholds and rates are unchanged in most jurisdictions for FY2026-27 [CONFIRM AT PUBLISH: verify each state's FY27 threshold against the state revenue offices; NSW currently $1.2 million at 5.45%], but a 4.75% wage rise pushes more businesses over the line without hiring anyone. Check your position with the payroll tax threshold calculator and our state-by-state payroll tax guide.
Parental leave. Government Paid Parental Leave rises to 130 days for children born or placed on or after 1 July 2026, and unpaid flexible parental leave increases to 130 days.
The C13 phase-out. The Commission began phasing out the lowest ongoing award classification (C13). The lowest ongoing award rate is now $1,004.90 per week, with entry-level (C14) rates at a minimum $978.10 per week for no more than the first six months of employment. Around 100,000 of the lowest-paid workers get an above-4.75% rise, which matters if you employ at entry classifications in hospitality, retail or cleaning.
For a services business running 35% to 45% of revenue as wages, a 4.75% wage movement is a 1.7 to 2.1 point hit to gross margin if nothing else changes. There are only three responses: price, productivity, or absorption. The businesses that handle wage rounds well decide which of the three they are doing before the first affected pay run, not at year end. If your finance function cannot tell you your fully loaded cost per employee and your margin sensitivity to this increase, that is a gap worth closing; it is standard output for an outsourced finance team, and our guide to how much it costs to run a finance team in Australia shows the benchmarks.
How much did the minimum wage go up in July 2026?
The National Minimum Wage rose 5.97% to $26.44 per hour ($1,004.90 per week) from the first full pay period on or after 1 July 2026. Modern award minimum wages rose 4.75%.
What does a minimum wage employee cost in Australia in 2026-27?
A full-time adult on the National Minimum Wage costs a minimum of $58,525 a year including 12% superannuation. Payroll tax, workers compensation, leave loading and overheads sit on top of that.
Is Payday Super law now?
Yes. From 1 July 2026, employers must pay superannuation at the same time as salary and wages rather than quarterly. Contributions need to reach the employee's fund within a short window of each payday, and the redesigned super guarantee charge applies to late payments.
How does Payday Super affect cashflow?
It removes the float employers previously held between accruing super and the quarterly due date. On Scale Suite's analysis that is roughly 18% of your annual super bill in permanently reduced working capital, about $37,000 for a 20-person business on average wages of $85,000.
Did the super guarantee rate change on 1 July 2026?
No. The super guarantee reached its final legislated rate of 12% on 1 July 2025 and remains at 12% for FY2026-27. What changed on 1 July 2026 is the payment timing under Payday Super.
Do I have to pass the 4.75% increase to staff paid above award?
Not automatically, but you must confirm every employee still clears the new award floor for their classification, including under annualised salary arrangements and set-off clauses. With intentional underpayment now a criminal offence, this check is not optional.
What is the high income threshold for 2026-27?
$190,100. Employees guaranteed earnings above this can fall outside award coverage, and the unfair dismissal compensation cap is now $95,050.
Which industries are most affected by the 2026 wage decision?
Sectors with high award reliance: accommodation and food services, retail, healthcare and social assistance, and administrative and support services. These account for more than two-thirds of award-reliant workers.
Scale Suite is a Sydney-based provider of outsourced finance teams and fractional CFO services for Australian SMEs. We deliver weekly bookkeeping, payroll, BAS/IAS lodgement, cashflow reporting, management accounts, and strategic fractional CFO oversight, all as a fully embedded team that works inside your business.
CA-qualified, Xero Certified, and registered BAS Agents, we replace fragmented bookkeepers and once-a-year accountants with one responsive finance function at a fraction of the cost of full-time hires. We serve growing businesses across Sydney, Melbourne, Brisbane, and Perth, with packages starting from $1,500 per month and no lock-in contracts.
We review and check this guide periodically. At the time of writing (July 2026), all information was current. Scale Suite is a registered BAS Agent, not a licensed tax advisor or financial advisor. This content is general information only and does not constitute professional tax, financial, or legal advice. Some details may change over time.
Suggested citation: Scale Suite (2026), FY2026-27 Wage Cost Report, scalesuite.com.au/resources/fy2026-27-wage-cost-report
Headline figures: minimum cost of a full-time minimum wage employee in FY2026-27 is $58,525 including super, up $3,314 (6.0%) year on year; award wages rose 4.75% and the National Minimum Wage 5.97% to $26.44 per hour from 1 July 2026; Payday Super permanently removes roughly 18 cents of working capital per dollar of annual super, about $37,000 for a typical 20-person business.
Methodology: Scale Suite analysis of the Fair Work Commission Annual Wage Review 2026 decision, Fair Work Ombudsman published rates, and ATO superannuation guarantee and Payday Super settings, current at July 2026.
Scale Suite is a Sydney-based provider of outsourced finance and HR services for Australian SMEs. We deliver bookkeeping, financial reporting, payroll processing, fractional CFO support, recruitment, employee onboarding, people and culture support, and fractional HR oversight, all as a fully embedded team that works inside your business.
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