What Is the National Minimum Wage?
The National Minimum Wage is the base rate of pay set under the Fair Work Act 2009 for employees who are not covered by a modern award or a registered agreement. Following the Fair Work Commission's 2026 Annual Wage Review, the National Minimum Wage increased from $24.95 to $26.44 per hour, or from $948.00 to $1,004.90 per week, effective from the first full pay period on or after 1 July 2026. This is the first time the National Minimum Wage has risen above $1,000 per week.
The National Minimum Wage applies to a relatively small share of the workforce in practice, since most employees are covered by a modern award or an enterprise agreement that sets pay rates specific to their industry or role.
Award Wages vs the Minimum Wage
For most workers, pay is not set by the National Minimum Wage at all, but by the modern award covering their industry or occupation. Modern awards set minimum pay rates, penalty rates and allowances that can be, and often are, higher than the National Minimum Wage. In the 2026 Annual Wage Review, the Fair Work Commission increased minimum award wages by 4.75 percent from 1 July 2026, affecting approximately 21.1 percent of all employees in Australia, or almost 2.8 million people.
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Where an employee is covered by an award or agreement, the rate set out in that award or agreement applies instead of the National Minimum Wage, even in the rare cases where an award rate happens to sit below it. Employers and employees can check the exact minimum rate that applies to a specific role using the Fair Work Ombudsman's Pay and Conditions Tool.
The Commission also made a structural adjustment to the lowest-paid classifications in the award system, phasing out the lowest ongoing classification (C13) in favour of the next level up (C12). As a result, the lowest ongoing wage rate in the modern award system is now $1,004.90 per week or $26.44 per hour, while the entry-level rate applying for an employee's first six months is $978.10 per week or $25.74 per hour. The Commission estimates this adjustment affects around 100,000 of the lowest-paid employees.
Casual Loading and the Minimum Wage
Casual employees who are award-free or agreement-free are entitled to a 25 percent casual loading on top of the National Minimum Wage, as set out in the annual National Minimum Wage Order made by the Fair Work Commission. This reflects the fact that casual employment does not include entitlements such as paid leave. Casual employees covered by a modern award receive the casual loading set out in that award, which is also commonly 25 percent, though the exact rate and how it interacts with penalty rates can vary between awards. Employees should check their specific award to confirm the applicable casual rate rather than assuming a flat figure applies across every industry.
How the Fair Work Commission Sets the Minimum Wage
Under section 285 of the Fair Work Act 2009, the Fair Work Commission is required to conduct an Annual Wage Review each year, through which it may vary modern award minimum wages and set the National Minimum Wage. The 2026 Annual Wage Review decision was handed down on 2 June 2026, with changes taking effect from the first full pay period on or after 1 July 2026.
In its decision, the Commission noted that accelerated inflation, tighter monetary policy, and unexpected global economic disruption had reopened the real wage gap that narrowed following the 2025 review. It ultimately awarded a 4.75 percent increase to award wages and a larger increase to the National Minimum Wage, while acknowledging this would not fully close that gap. The Commission also flagged an ongoing program to address gender-based undervaluation in award classifications, including a planned review of occupations such as disability home care workers, pharmacists, nurses and flight attendants.
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Minimum Wage Requirements for Visa Sponsorship
Separately from the National Minimum Wage and award system, employers sponsoring skilled workers on employer-sponsored visas must meet dedicated income thresholds set by the Department of Home Affairs. These thresholds exist to ensure sponsored workers are paid fairly and that skilled migration does not undercut local wages, and they operate independently of the Fair Work Commission's annual review.
The Temporary Skilled Migration Income Threshold, now generally referred to as the Core Skills Income Threshold following the introduction of the Skills in Demand visa on 7 December 2024, applies to nominations under the Skills in Demand (Subclass 482), Employer Nomination Scheme (Subclass 186), and Skilled Employer Sponsored Regional (Subclass 494) visas, and is indexed annually from 1 July. A separate, higher Specialist Skills Income Threshold applies to the Specialist Skills stream of the Subclass 482 visa.
In every case, sponsors must pay the higher of the applicable income threshold or the Annual Market Salary Rate, which reflects what an equivalent Australian worker would be paid for the same role in the same location. A salary that clears the relevant income threshold but falls short of the Annual Market Salary Rate for the role will not satisfy sponsorship requirements. Because these thresholds are indexed every 1 July and depend on the exact nomination lodgement date, the current figure should always be confirmed directly on the Department of Home Affairs website before a nomination is prepared.
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Whether you are an employer working out your sponsorship obligations under the current income thresholds, or a visa holder wanting to understand what you should be paid, the minimum wage and skilled visa salary rules can be difficult to untangle, particularly where an award, an enterprise agreement and a migration threshold all apply at once. The team at Australian Migration Lawyers can help you understand how these requirements apply to your situation. Get in touch for a detailed consultation, available seven days a week.
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