Your Guide to the National Minimum Wage Increase

The Australian government announced in June that the national minimum wage was to increase from 1 July 2022.

The national minimum wage has increased from $20.33 per hour to $21.38 per hour. This means an extra $40 per week for millions of Australians.

The rise constitutes a 5.2% increase and comes amid the rising cost of living crisis affecting the country.

Awards minimum wages have also increased by 4.6%. Awards are legal documents that set minimum pay rates and employment conditions in various industries covering millions of Australian workers.

So, what does this mean for business owners?

National Minimum Wage increase

The national minimum wage for non-award full-time employees is now $812.44 per 38-hour week. 

The 5.2% increase is above the current inflation rate of 5.1%, reflecting an election promise of the Australian Prime Minister, Anthony Albanese, to announce a pay rise in line with inflation.

The Fair Work Commission (FWC), whose expert panel sits every year to review minimum wage, said the increase would affect more than 2.7 million workers.

The increase meant businesses had to begin paying the national minimum wage from the first full pay period after 1 July 2022.

Award minimum wage increase

Modern award minimum wages have increased by 4.6% or $40, whichever is higher.

For example, let’s say an employee works under the Manufacturing Award and earned a weekly wage of $805.40 before 1 July 2022. As that is below $869.60, the employee has since received a $40 increase in their weekly wage.

Alternatively, any employee under the Manufacturing Award who earned more than $869.60 before July now receives a 4.6% increase since that works out as more than $40. 

Unlike the national minimum wage increase, the award increase is being rolled out in two stages.

For most awards, the changes came into effect on 1 July 2022, but employees under some awards within the aviation, hospitality and tourism industries had to wait until 1 October 2022.