Every year, the Fair Work Commission (FWC) reviews Australia's national minimum wage and hands down a decision that directly affects over 2.6 million workers. The 2025-26 Annual Wage Review delivered a 3.75% increase, lifting the national minimum wage to $25.10 per hour or $953.80 per week for a full-time 38-hour week. Here is what that means in practice.
What the Increase Looks Like in Dollar Terms
The 3.75% increase translates to an extra $0.91 per hour, or approximately $34.58 per week before tax for a full-time worker on the national minimum wage. Over a full year, that is around $1,798 in additional gross pay.
After tax, the picture is slightly less impressive. A minimum wage worker earning $49,598 per year falls into the 16% and 30% tax brackets under the revised Stage 3 rates. After income tax and the Medicare Levy, the take-home increase works out to roughly $26.50 per week, or about $1,378 per year.
Want to see exactly what a minimum wage salary looks like after tax? Our salary calculator breaks it down to the cent, including Medicare Levy, HELP repayments, and super contributions.
Modern Award Workers: The Flow-On Effect
The minimum wage decision does not just affect workers on the bare minimum. The FWC's ruling also flows through to all 121 modern awards that cover specific industries. Award rates are adjusted by the same percentage, which means workers in retail, hospitality, healthcare, and dozens of other sectors all received a 3.75% bump to their base rates.
For example, a Level 3 retail worker under the General Retail Industry Award saw their hourly rate increase from approximately $27.50 to $28.53. A qualified aged care worker under the Aged Care Award received a similar percentage lift on top of the additional interim increases the FWC has been granting to the aged care sector since 2023.
Does It Keep Up With the Cost of Living?
This is the critical question, and the answer depends on how you measure it. The Consumer Price Index (CPI) rose by 3.2% over the year to December 2025, so a 3.75% wage increase technically outpaces headline inflation by about half a percentage point. In real terms, minimum wage workers are marginally better off.
However, CPI is an average across all goods and services. The items that consume the largest share of a low-income worker's budget — rent, groceries, electricity, and fuel — have been rising faster than the headline figure. Rents in particular have surged by 7% to 9% nationally over the past year, which hits minimum wage workers hardest because they spend a larger proportion of their income on housing.
The ACTU argued for a 5% increase in its submission to the FWC, while employer groups pushed for no more than 2.5%. The 3.75% outcome was, as usual, a compromise — but one that at least maintained the purchasing power of the minimum wage in aggregate terms.
How Australia Compares Globally
Australia's minimum wage remains one of the highest in the world in absolute terms. At $25.10 per hour, it sits above the UK's National Living Wage (equivalent to roughly AUD $22.80), Canada's federal minimum (around AUD $21.50), and well above the US federal minimum of USD $7.25 (approximately AUD $11.20) — though many US states set significantly higher rates.
When adjusted for purchasing power parity, Australia's minimum wage ranks in the global top five, alongside Luxembourg, New Zealand, and the Netherlands. This is something the economy can be proud of, though it does contribute to Australia's relatively high cost base for businesses.
If you are comparing what you might earn across different countries, our salary calculators cover Australia and 12 other countries to help you see the differences side by side.
Impact on Casual and Part-Time Workers
The minimum wage increase applies pro-rata to part-time workers and includes the 25% casual loading. A casual worker on the national minimum wage now earns $31.38 per hour including the loading. For someone working a typical 25-hour casual week, the annual gross income comes to approximately $40,794.
Our hourly rate calculator lets you convert between hourly, weekly, fortnightly, and annual pay so you can see exactly where you stand. If you regularly work overtime, the overtime calculator will show you what those extra hours are worth at time-and-a-half or double-time rates.
What About the Super Guarantee?
With the SG now at 12%, every dollar of your minimum wage increase also generates an additional 12 cents in superannuation contributions. On the full $1,798 annual wage increase, that means an extra $215.76 flowing into your super fund. It does not sound like much, but over a 40-year career with compound returns, those marginal increases add up to tens of thousands at retirement.
Penalty Rates and Take-Home Pay
For workers in retail and hospitality, weekend and public holiday penalty rates multiply the base rate significantly. A minimum wage worker pulling a Sunday shift in retail earns a 200% loading — that is $50.20 per hour under the new rates. Even a Saturday rate of 125% delivers $31.38 per hour.
These penalty rates are a crucial part of low-income workers' earnings. The FWC's controversial 2017 decision to reduce Sunday penalty rates in retail and hospitality from 200% to 175% was partially reversed for some awards, but it remains a live issue in industrial relations.
What Can You Do to Maximise Your Pay?
If you are on the minimum wage or an award rate, make sure your employer is paying you correctly. The Fair Work Ombudsman's Pay and Conditions Tool (PACT) lets you look up your exact entitlements based on your award, classification, and hours worked.
Common underpayment issues include not receiving the correct casual loading, being paid flat rates that do not account for penalty rates, and employers failing to pass on the annual wage increase on time. If something looks off, check your payslip against our salary calculator and contact the Fair Work Ombudsman if needed.
The minimum wage may not make anyone rich, but it is a fundamental safety net. Understanding your rights and running your numbers ensures you are getting every dollar you are entitled to.