Salary Increase 2026: What the 4.75% Award Rise Means for Your Gross Pay, Super, and Tax
Understand the 2026 salary increase: national minimum wage rises to $26.44/hr, award wages up 4.75%, super guarantee hits 12%, and tax brackets for 2026–27. Use the Salary Index to
The national minimum wage increase to $26.44 per hour places it at an index of 48.2, while the 4.75% award rise lifts many award rates closer to the national line of 100.
What is the salary increase 2026?
When we talk about a salary increase 2026 in Australia, we’re usually referring to the changes that take effect from 1 July each year. The Fair Work Commission’s Annual Wage Review sets new minimum wages, and the super guarantee rate also rises. This article explains what those changes mean for your gross pay, your super, and the tax you’ll pay, using the Salary Index to put figures in perspective.
The national minimum wage and award increases
From 1 July 2026, the national minimum wage is $26.44 per hour, or $1,004.90 per week for a 38-hour week. That’s an annualised gross of $52,255. On the Salary Index, where 100 equals full-time adult ordinary-time earnings ($108,352), that’s an index of 48.2. In other words, someone on the national minimum wage earns about half the national average.
Most employees are covered by a modern award. The Fair Work Ombudsman confirms that minimum award wages rose by 4.75% from 1 July 2026, with a floor of $26.44 per hour for ongoing adult employees. Entry-level rates for the first six months must be at least $25.74 per hour. If you’re on an award, check your classification using the pay guides on the Fair Work Ombudsman site or your employer’s payroll system.
Example: award increase in practice
Suppose you’re a retail worker on the General Retail Industry Award. Before 1 July 2026, your base rate might have been $24.50 per hour. A 4.75% increase would bring it to about $25.66 per hour. But because the award floor is $26.44, your rate would actually rise to that higher amount. Always compare the percentage increase with the new minimum rates.
Super guarantee and payday super
From 1 July 2026, the super guarantee rises to 12% of your ordinary time earnings. That’s up from 11.5% in 2025–26. For someone on the national minimum wage, that means an extra $6,270 per year in super contributions (12% of $52,255), on top of gross pay. The new payday super rules mean your employer must pay your super at the same time as your wages, not quarterly. This helps your super grow sooner.
The maximum super contribution base for 2026–27 is $270,830. If you earn above that, your employer only pays super on the first $270,830. For high earners, the salary increase 2026 may not boost super beyond that cap.
Tax on your salary increase
Your gross pay increase will be taxed according to the 2026–27 resident tax rates. The tax-free threshold remains $18,200. Then:
- 15% on income from $18,201 to $45,000
- 30% from $45,001 to $135,000
- 37% from $135,001 to $190,000
- 45% above $190,000
Plus the Medicare levy of 2%. Note that the high income threshold for unfair dismissal and other purposes increased to $190,100, matching the top bracket threshold.
Example: tax on a $5,000 award increase
Imagine you earn $60,000 in 2025–26 and get a 4.75% award increase to $62,850 in 2026–27. The extra $2,850 is taxed at your marginal rate of 30% plus 2% Medicare, so you keep about $1,939 of the increase. Your take-home pay rises, but not by the full gross amount.
How the Salary Index helps you compare
The Salary Index converts your gross annual pay into a number relative to the national line of 100. For example, if you earn $80,000, your index is about 74 (80,000 ÷ 108,352 × 100). That tells you where you sit compared to the average full-time adult worker. You can also compare by states or industries. For instance, the mining industry index is 154.7, while accommodation and food services is 72.5.
What about junior rates?
If you’re under 21 and not covered by an award that sets different junior rates, the national minimum wage order applies percentages of the adult rate. For 2026–27, the hourly rates are:
- Under 16: $9.73
- 16 years: $12.51
- 17 years: $15.28
- 18 years: $18.06
- 19 years: $21.81
- 20 years: $25.83
A modern award may set higher junior rates, so always check your award. The salary increase 2026 for juniors is the same percentage increase applied to the adult rate, but the dollar amount is lower.
State and territory differences
The Salary Index shows that average earnings vary across Australia. For 2026, the ACT has the highest index at 109.9 ($119,090 annualised), while Tasmania is lowest at 88.6 ($96,008). If you move states, your pay relative to the national line changes. The national minimum wage is the same everywhere, but award rates and market pay differ.
Putting it all together
The salary increase 2026 brings a 4.75% lift to award wages, a higher national minimum wage floor, and a super guarantee of 12%. Your gross pay goes up, but tax and Medicare take a slice. Use the how the index works page to calculate your own index and see how you compare. And remember, the figures here are benchmarks – your actual pay depends on your award, enterprise agreement, or individual contract.
For more detail on specific awards and pay rates, refer to the pay guides published by the Fair Work Ombudsman. The Fair Work Commission’s Annual Wage Review 2026 decision provides the legal basis for the changes.
Questions people ask
Does the 4.75% award increase apply to all employees?
The 4.75% increase applies to minimum award wages from 1 July 2026, but only if the resulting rate is at least $26.44 per hour for ongoing adult employees. If you are paid above the award minimum, your employer may not be required to increase your pay by 4.75%, though many do. Check your award classification and your pay slip. For employees covered by an enterprise agreement, the base rate must still meet the award minimum, so the increase may flow through indirectly.
How does the super guarantee increase to 12% affect my take-home pay?
From 1 July 2026, the super guarantee rises to 12% of your ordinary time earnings. This is on top of your gross pay, so your take-home pay does not decrease. However, employers must now pay super on the same day as wages (payday super). The maximum contribution base for super is $270,830 for 2026–27, meaning earnings above that don't attract compulsory super. Your total remuneration package effectively increases by the extra super contribution.
What are the tax brackets for 2026–27 and how do they affect my salary increase?
For 2026–27, resident tax rates (excluding Medicare) are: nil up to $18,200; 15% from $18,201 to $45,000; 30% from $45,001 to $135,000; 37% from $135,001 to $190,000; and 45% above $190,000. The Medicare levy is 2%. If your salary increase pushes you into a higher bracket, only the portion above the threshold is taxed at the higher rate. For example, a $5,000 increase from $130,000 to $135,000 would be taxed at 30% (plus 2% Medicare), not the 37% bracket.