Minimum Wage


Get prepared for the 2022 national minimum wage increase

17 June 2022

The Fair Work Commission recently announced Australia’s minimum wage will increase from July 1 2022.

This is the first year we’ve seen the decision to make a staggered increase depending on the wage paid. We are here to help you understand the why, the what and the how.

The Expert Panel for annual wage reviews considered several economic factors and changes last year leading to this decision.  The most significant being the sharp rise in the cost of living and strengthening of the labour market.

From July 1, the national minimum wage will increase $40 per week, amounting to an increase of 5.2%.  The new national minimum wage will be $812.60 per week or $21.38 per hour based on a 38-hour week.

Award minimum rates will see an increase of 4.6%, subject to a minimum increase of $40 per week and based on a 38-hour week for a full-time employee.  This means minimum award wages:

  • above $869.60 per week, will get a 4.6% increase
  • below $869.60 per week, will get a $40 increase based on a 38-hour week full time employee.

As an employer there are a number of steps you need to go through to make sure your business continues to pay people appropriately:

  1. Confirm the award and grade your team are paid under. In some awards employees move up in grades/levels based on length of time in the role so double check before taking the next steps.
  2. Identify anyone paid at the award rate. As of July 1, they will receive an increase. Even those at higher levels or grades will receive the increase.  Accidently forgetting managers is one of the biggest issues we identify working with SME’s.
  3. Identify anyone paid above the award rate. You may choose to increase their hourly rate as well.  However, you need to ensure that their hourly rate is at or above the award required rate.
  4. For anyone on a salary package (a fixed amount per year that is designed to cover the hours worked, overtime, allowances, and penalties etc.) you should be checking that the salary package is at least the equivalent of the new minimum wage for their level. Once again, if this increase means your salary is not aligned, you will need to increase the package. Make sure you check what is included in the package. Have you considered leave loading? Does it adequately compensate for any overtime, early morning or late starts they are currently expected to do?
  5. Prepare for the changes in your payroll system so it’s ready for the first payroll cycle in July. For those SME’s with automatic bank deposits set up, remember to up-date them.
  6. Also remember that superannuation calculations are increasing to 10.5% so this may need to be changed.
  7. Communicate to your employees what their new rate of pay is in a letter or email.

If you need help with any or all of these steps, Impact HR is here to support you. We can take you through the process step by step, so you’ll feel comfortable and ready for July 1.

For more information please contact one of our friendly HR professionals today on 1300 474 672.


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