The 2026-27 financial year begins with a raft of significant changes affecting workers and families across Australia, including a boost to the minimum wage, a rise in the superannuation guarantee, and an expansion of paid parental leave. From 1 July, the national minimum wage increases by 3.5% to $24.10 per hour, or $915.90 per week for a full-time worker, according to the Fair Work Commission's annual wage review decision handed down in June.
Minimum Wage Increase Details
The 3.5% rise is lower than last year's 4.3% increase but still above the current inflation rate of 2.8%. The Fair Work Commission said the decision balances the needs of low-paid workers with the economic pressures on businesses. The new rate applies to all employees covered by the national minimum wage order, including casual workers who receive a 25% loading, bringing their minimum to $30.13 per hour.
In its decision, the commission noted that “the increase will provide a real wage increase for the lowest-paid workers while recognising the cost pressures facing businesses.” The Australian Council of Trade Unions (ACTU) welcomed the rise but argued it should have been higher to keep pace with living costs. “While any increase is better than none, working families are still struggling with high rents and grocery prices,” said ACTU Secretary Sally McManus.
Superannuation Guarantee Hits 12%
The superannuation guarantee rate rises from 11.5% to 12% on 1 July, as part of the legislated schedule to reach 12% by 2025. This means employers must contribute an additional 0.5% of an employee’s ordinary time earnings into their super fund. For a worker earning the average full-time salary of $98,000, this translates to an extra $490 per year going into their retirement savings.
The increase is the final step in a series of legislated rises that began in 2021. Industry Super Australia said the boost will add thousands of dollars to a typical worker’s retirement balance over their career. “Reaching 12% is a milestone that will significantly improve retirement outcomes for millions of Australians,” said CEO Bernie Dean.
Paid Parental Leave Expansion
Paid parental leave expands from 22 weeks to 26 weeks (six months) from 1 July, with the government’s scheme now offering up to $1,912.40 per week based on the national minimum wage. The extension is part of the Albanese government’s commitment to increase paid parental leave to 26 weeks by 2026. The changes also allow families to share the leave more flexibly, including both parents taking leave simultaneously.
Families with a combined household income of up to $350,000 per year are eligible for the full 26 weeks, while those earning between $350,000 and $450,000 receive a reduced amount. The government estimates that around 180,000 families will benefit from the expanded scheme each year. “This is about giving families more time to bond with their new baby and supporting parents to share caring responsibilities,” said Minister for Social Services Amanda Rishworth.
Other Changes from 1 July
Several other measures also take effect from 1 July. The Medicare levy low-income threshold increases, meaning more low-income earners will pay no levy or a reduced rate. The tax-free threshold for the Medicare levy for singles rises to $24,276, up from $23,365, and for families to $40,939, up from $39,402. The pension work bonus increases, allowing age pensioners to earn more without reducing their pension. The income-free area for the pension work bonus rises to $500 per fortnight, up from $300.
Additionally, the maximum rate of the Commonwealth Rent Assistance increases by 10%, providing relief to renters in the private market. The government said this will help around 1.1 million households. The changes to rent assistance are part of the broader cost-of-living package announced in the May budget.
Business groups have expressed concern about the cumulative impact of the wage and super increases on employment costs. The Australian Chamber of Commerce and Industry said the minimum wage rise and super guarantee increase together add around $2,500 per year to the cost of employing a full-time worker on the minimum wage. “Small businesses are already grappling with high energy costs and supply chain pressures,” said ACCI Chief Executive Andrew McKellar. “These increases, while modest, add to the burden.”
Overall, the 1 July changes are expected to inject additional spending power into the economy while also boosting retirement savings and supporting families with newborns. The government has framed the changes as part of its plan to deliver cost-of-living relief while building a fairer and more productive economy.
