On 2 June 2025, Fair Work Commission handed down their decision on this year’s Annual Wage Review. The decision determined that:
Importantly, the decision determined that they had an operative date of the first full pay period on or after 1 July 2025. This means for employers, that your first pay period after 1 July (which means a pay period which does not include any dates from June 2025) will be when new rates apply. For most businesses this will be in the coming days and weeks.
In addition to the Annual Wage Review increase, employers should also be aware that the final increase to superannuation applied from 1 July 2025. Superannuation is now 12% and unlike the wage increase will apply from 1 July. This means that if you have a pay cycle which includes both June and July 2025 dates, the new superannuation rate of 12% will apply.
Now more than ever, compliance is critical. Decisions like the Annual Wage Review can be complicated to navigate, along with the raft of changes we have recently seen to the Fair Work Act due to the Closing Loopholes legislation. It is crucial for you to undertake reviews of your payroll and your employment arrangements to ensure they remain compliant.
For those employers who have been paying above Award rates, this year’s 3.5% increase to minimum award rates could have resulted in your rates no longer being above Award. This means the Award provisions may surpass those of the employment contract or IFA, resulting in your employees no longer being better off and therefore being unintentionally underpaid.
The longer an underpayment goes undetected, the more difficult and expensive it becomes to rectify when it is picked up. Furthermore, there can be serious implications for superannuation, payroll tax, civil and criminal consequences along with workers compensation premiums as well. It makes good sense to undertake an audit of your Payroll system to make sure payments are being made correctly to your employees.
If your employment contracts or IFAs have been in place for more than a year or two, the South Australian Business Chamber (SABC) recommends you review the arrangement to ensure that:
For those who subscribe to our PAYpack service, you should have received an email advising you that your Modern Awards have been updated, please login to your member portal to access the updated Awards.
How We Can Help:
You can’t afford to get it wrong! South Australian Business Chamber’s team of Consultants are experts in industrial relations and can work with you to conduct an audit on your payroll system, review your contracts, IFA’s or Agreements to ensure your compliance.
Our team or Workplace Advisors are also on standby to provide you with advice on rates of pay, Modern Award classifications and more.
Contact our Business Advice Hotline on (08) 8300 0000 (select option 1) and we will make sure you are not at risk of a costly underpayment.
