An overview of FY 25-26 minimum wage in Australia

Author

The Rippling Team

Published

17 October 2024

Updated

30 December 2025

Read time

5 MIN

In this article

Minimum wage in Australia refers to the lowest amount you can legally pay an employee who isn't covered by an award for their ordinary hours of work.

Minimum wage compliance isn’t something you can 'mostly' get right. If you underpay staff, even by mistake, you expose your business to back payments, fines, and Fair Work scrutiny.

We put this guide together to explain how the national minimum wage works in Australia. You'll discover who it applies to, and how it interacts with modern awards, employee types, and pay structures.

What's the national minimum wage in Australia?

As of 1 July 2025, the national minimum wage in Australia is $24.95 per hour or $948 per week (before tax) for a full-time employee. Minimum wages apply to employees who don't fall under a modern award or enterprise agreement.

The national minimum wage exists to ensure every worker gets a fair baseline rate of pay. It stops employers from paying less than a legal minimum, helps protect workers from exploitation, and provides a wage floor that keeps up with general living costs.

The Fair Work Commission (FWC) reviews and sets this rate once a year through its Annual Wage Review. It considers things like inflation, the cost of living, productivity, and broader economic conditions before it decides whether to lift the rate and by how much.

Most changes start on 1 July each year, so you generally need to update your payroll settings around mid-year to avoid accidental underpayment. Modern payroll software for Australian businesses typically updates automatically.

Note that certain groups, like juniors, apprentices, trainees and employees working under the Supported Wage System, have their own special national minimum wage that reflects their age, experience or productivity. More on this next.

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How the minimum wage applies to different workers

The National Minimum Wage Order doesn’t apply in the same way to every worker. The base hourly rate stays the same, but loadings, age-based percentages, and special wage rules change how much different employees take home.

Full-time and part-time employees

Full-time and part-time employees earn the same base hourly minimum wage. But their weekly pay depends on how many hours they work.

Full-time employees earn at least $24.95 per hour, which equals $948.00 per week for a 38-hour week (before tax).
Part-time employees also earn $24.95 per hour, but their weekly pay scales down based on their agreed hours.

Example: A part-time employee working 20 hours per week earns a minimum of $499.00 per week (20 × $24.95).

Casual employees

Casual employees start from the same base hourly minimum wage, but you must add a 25% casual loading to it. This loading makes up for the lack of paid leave and other entitlements.

Base minimum wage: $24.95 per hour
Casual loading (25%): $6.24 per hour

Minimum casual rate: $31.19 per hour

Junior employees

Junior employees (under 21) don’t receive the full adult minimum wage. Instead, the Order sets a special national minimum wage depending on age, based on the following percentages of the adult rate:

Under 16: 36.8%
16 years: 47.3%
17 years: 57.8%
18 years: 68.3%
19 years: 82.5%
20 years: 97.7%

Example: A 17-year-old earns 57.8% of $24.95, which equals $14.42 per hour. Once a junior employee turns 21, the full adult national minimum wage applies.

Apprentices

Award-free apprentices fall under Special National Minimum Wage 4. This means that their pay links to the Miscellaneous Award 2020 apprentice rates, not a percentage of the adult minimum wage. The exact minimum rate depends on:

the year of the apprenticeship
the apprentice’s age
whether the apprenticeship is full-time, part-time, or school-based

Adult apprentices (21 and over)

You must pay the adult apprentice rate that applies to the relevant year of training under the Miscellaneous Award.

Example: You must pay a full-time, award-free apprentice aged 27 in their first year $22.50 per hour ($854.72 per week). This is 80% of the Level 3 adult classification rate under the Miscellaneous Award 2020.

Junior apprentices

Junior apprentices receive a junior percentage of the applicable apprentice rate, based on their age. You need to apply the percentage to the apprentice rate for that year of training, not to the adult minimum wage.

Example: A full-time, award-free 17-year-old first-year apprentice earns 57.8% of the first-year apprentice rate. Based on an apprentice rate of $22.50 per hour, this equals $13.01 per hour ($494.19 per week).

Trainees

Award- and agreement-free trainees fall under Special National Minimum Wage 5. You must pay the National Training Wage in Schedule E of the Miscellaneous Award 2020.

The training wage changes based on the trainee’s wage level (A, B, or C), which links to the training package, plus the trainee’s highest year of schooling and time out of school.

Example: You must pay a full-time, award-free trainee aged 21 or over who falls under National Training Wage Level D $18.50 per hour ($703.00 per week).

Supported Wage System employees

Employees with a disability whose productive capacity is affected may fall under Special National Minimum Wage 2. Under the Supported Wage System (SWS), the employee’s pay links to an assessed productivity percentage of the national minimum wage.

That means you pay them a share of the full adult minimum wage based on how productive they are capable of being, as determined by a formal SWS assessment.

Example: If an employee has an assessed productive capacity of 50%, you must pay them 50% of the adult national minimum wage. Based on the FY2025 adult rate of $24.95, that equals $12.48 per hour.

Industry-specific minimum wages (Modern Awards)

In Australia, modern awards outline the minimum pay rates and conditions for specific industries and occupations. If an employee falls under a modern award, then the award rate applies (which is often higher than the national minimum wage).

An employee’s minimum wage under an award usually comes down to their classification level. Awards group employees by duties, skills, and experience. Higher classifications come with higher minimum pay, along with award-specific rules surrounding penalties, allowances, overtime, and loadings. It's important that you apply the correct classification and not just the lowest level by default.

Below you can see some FY2025 examples of Level 1 minimum hourly rates under common modern awards. These figures apply to adult, full-time employees before penalties or allowances.

General Retail Industry Award: The current minimum hourly rate for a level 1 employee under this award is $26.55 per hour.
Fitness Industry Award: The minimum hourly rate a level 1 employee can earn under this award is $24.28 per hour.
Banking, Finance and Insurance Award: An employer has to pay a level 1 employee under this award a minimum of $25.74 per hour.
Professional Employees Award: Under this award, the current minimum hourly rate for a level 1 graduate employee (with a 3-year degree) is $32.18.
Health Professionals and Support Services Award: For a level 1 support services employee, the minimum hourly rate is $25.74.

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How overtime and penalty rates affect minimum wage calculations

The National Employment Standards (NES) set the minimum legal entitlements for employees in Australia. When it comes to overtime and penalty rates, the NES doesn’t create an automatic entitlement.

For employees who are award- and agreement-free, the NES only requires you to pay at least the applicable minimum wage for all hours they work. Overtime rates, weekend penalties, or public holiday loadings only come into play if the employee’s employment contract includes them. If the contract doesn't include them, then paying the base minimum wage is all you need to do to meet your legal obligation.

Things change once a modern award or enterprise agreement applies, though. Awards and agreements outline non-negotiable rules for overtime and penalty rates, including when higher rates apply and how to calculate them. These rates often cover work outside ordinary hours, such as overtime, weekends, public holidays, early mornings, or late nights. And they can increase pay above the base rate quite significantly.

Minimum wage compliance: what employers must get right

The Fair Work Ombudsman doesn't mess around when it comes to wage complaints and underpayments. This is especially true now that stringent wage theft laws are in place. If you get minimum wage compliance wrong, the consequences can include back payments, financial penalties, and legal action.

Here are some of the main minimum wage compliance obligations for Australian employers:

01
Pay the correct minimum wage
You must pay every employee at least the national minimum wage or the relevant modern award rate. This includes getting classifications right. Payroll software that understands Australian employment laws can help apply the correct base rates automatically and reduce classification errors.
02
Apply casual loading correctly
Casual employees must receive a 25% casual loading on top of their base hourly rate to compensate for the lack of paid leave entitlements. You must apply this loading consistently to all ordinary hours they work. This is unless an award or agreement sets different rules.
03
Keep accurate time and wage records
You must keep detailed records of hours worked, wages paid, and entitlements accrued for at least seven years. This is a requirement under the Fair Work Act 2009. An HRIS and solid time and attendance tracking software can make it much easier to maintain accurate records.
04
Provide compliant payslips
You must issue payslips within one working day of payment. Payslips need to clearly show ordinary hours, pay rates, loadings, deductions, and any overtime or penalty rates. Missing or incorrect payslips are one of the fastest ways to attract Fair Work scrutiny.
05
Update wages when minimum rates change
The FWC reviews minimum wages each year, with changes usually taking effect from 1 July. You must update pay rates straight away when those increases apply. Good payroll software typically handles these updates automatically, reducing the risk of paying outdated rates.
06
Adjust wages for juniors, apprentices, and trainees
Junior employees, apprentices, and trainees move through different pay rates as they age or progress through training. You need to apply these increases on time. Combined HR and payroll systems help track birthdays, training stages, and progression dates so pay changes don’t get missed or forgotten about.
07
Pay out final entitlements correctly
When employment ends, you must pay out accrued entitlements, such as annual leave. You calculate this based on the employee’s current minimum wage or award rate at the time of termination. Errors at termination often fuel disputes, so accuracy is important.

A solution for seamless minimum wage compliance

Minimum wage compliance changes over time as rates update, employees move roles, juniors age up, and apprentices progress. If you rely on manual checks or disconnected systems, it’s very easy for mistakes to happen.

Rippling's all-in-one workforce management software helps by keeping HR, Payroll, IT, and Spend in one place, all built on the same employee record. That single source of truth means changes to pay, employment type, age, or classification flow straight through to payroll without double handling.

In practice, that makes it easier to:

apply minimum wage updates when rates change
keep pay aligned with employee details and progression
calculate wages consistently across award-free and award-covered roles
avoid chasing information across spreadsheets and separate tools

Rippling keeps workforce data connected. That reduces manual work, lowers compliance risk, and gives you more confidence that you're paying your people correctly, every pay run.

FAQs

What's the minimum wage for a 20-year-old in Australia?

For young workers under 21 years old, the National Minimum Wage Order sets junior minimum wages based on age. At 20 years of age, the junior rate is 97.7% of the national minimum wage.

So, for a 20-year-old award- and agreement-free employee:

97.7% × $24.95 = $24.38 per hour (before tax)

How do I know if an employee is award-free or covered by a modern award?

Coverage depends on the industry, role, and duties, not job titles. Many employees assume they’re award-free when they aren’t. If you’re unsure, you should check the relevant modern awards or use the Fair Work Pay and Conditions Tool to confirm coverage before setting pay rates.

What happens if I accidentally underpay an employee?

Even accidental underpayments can trigger back payments, penalties, and Fair Work action. You still need to fix the error, repay the employee, and update your payroll going forward. This is why regularly reviewing pay rates and using systems that track changes automatically is essential.

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Disclaimer

Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting and legal advisers before engaging in any related activities or transactions.