The minimum wage is the lowest legally enforceable hourly, daily, or weekly rate that employers can pay their employees. It’s set and reviewed annually by the Fair Work Commission (FWC) and serves as a safeguard to ensure workers receive fair compensation for their labour.
In Australia, there are two key types of minimum wages:
As of 1 July 2025, the National Minimum Wage is:
This base rate applies to adult employees not covered by an award or registered agreement.
However, most employees in Australia are covered by modern awards, which specify higher minimum pay rates based on the type of work, classification level, and employment type (e.g. casual, part-time, full-time).
The Fair Work Commission conducts an annual wage review and decides whether the national minimum wage and award rates should be adjusted. This decision typically takes effect on 1 July each year and considers factors such as:
The commission’s goal is to balance the needs of employees with the economic realities for employers, especially small businesses.
Minimum wage rates can differ based on:
Example:
A Level 3 Retail Employee may earn more than a Level 1, reflecting their skills, experience, or responsibilities.
Employers must:
Failure to meet these obligations can result in penalties, back payments, and even legal action through the Fair Work Ombudsman.
Fair Work Ombudsman – Employer Obligations
There is often debate between the minimum wage and the living wage:
Advocates argue that the living wage should be the benchmark to reduce working poverty, while critics caution that excessively high wage floors can burden small businesses.
Microkeeper’s HR and payroll platform simplifies compliance with minimum wage laws by:
Whether you're managing a retail team or a hospitality roster, Microkeeper helps ensure your staff are paid correctly and fairly every time.
Explore Microkeeper’s Award-Compliant Payroll Software
Yes, but casual workers receive a higher hourly rate to compensate for lack of paid leave—this is called casual loading (currently 25%).
No. Even if both parties agree, it is unlawful to pay below the legal minimum wage. Such agreements are void under the Fair Work Act.
You may need to backpay the full amount owed, face fines from the Fair Work Ombudsman, and risk brand damage or legal claims.
Use the Find My Award tool from Fair Work, or consult an HR professional.
The minimum wage exists to protect workers from exploitation and ensure fair compensation across industries. For employers, keeping up with wage updates and compliance can be complex—but with tools like Microkeeper, staying compliant is easier than ever.
As the cost of living and regulatory expectations evolve, staying informed and leveraging compliant HR software ensures you don’t fall behind or make costly payroll mistakes.
Disclaimer: This glossary entry is for informational purposes only and does not constitute legal or financial advice. Always refer to the Fair Work Commission or a professional advisor for up-to-date guidance on wage obligations.
