2025-26 Annual Wage Review progressing as expected
Employers will rightly be anticipating the upcoming decision from the Fair Work Commission (FWC) in this year’s Annual Wage Review, which is awaited in the coming weeks. Last year’s decision of 3 June yielded an increase of 3.5% across all award minimum rates and the National Minimum Wage (NMW), with this year’s outcome once again expected in the first week of June.
The ACTU’s supplementary submission to the FWC Minimum Wage Panel seeks to lift minimum and award wages by 6%, pushing the NMW to $26.45 per hour (permanent), $1004.88 per week. This is a 1% increase on their March submission which was revised in response to inflationary pressures flowing from the Middle East war, with the ACTU arguing that a 6% increase “provides a buffer if the global situation worsens”.
In their supplementary submission, employer body, AIG, labelled the ACTU claim for a 6% increase “reckless”, calling instead for any increase to not exceed 3.9%. Initial submissions from ACCI, Australian Hotels Association and Restaurant & Catering Industry Association all advocate for an increase limited to 3.5%.
Australian Catholic Council for Employment Relations has lobbied for a 5% increase to eliminate “working poverty”, whilst the Centre for Indigenous People and Work (along with other employee-groups) “strongly supports” the granting of an increase of at least this amount.
Changes to calculation of increases for expense-related allowances, but not yet
On 18 May 2026, the FWC published a statement acknowledging the Australian Bureau of Statistics’ (ABS) decision to transition from quarterly to monthly Consumer Price Index (CPI) data, being the same data utilised to determine annual increases (if any) to expense-related allowances contained in Modern Awards.
A standard clause providing for the automatic adjustment of expense-related allowances in line with an applicable CPI figure is included in 149 awards which contain expense-related allowances. Traditionally, the applicable CPI figure at the time of previous annual wage reviews has almost always been the March quarter data published at the end of April each year. In November 2025, the ABS started publishing monthly CPI data which, for the first time, replaced the quarterly CPI as the primary measure of headline inflation. The FWC concedes that the introduction of the monthly CPI series may impact which index series determines the relevant adjustment factor for a designated allowance in accordance with the standard award clause, meaning refinement of the ‘standard award clause’ may be necessary for Annual Wage Reviews in future years.
The FWC assessed that there is insufficient time to suitably consider this issue before the 2026 Annual Wage Review decision needs to be issued, so have elected to delay proceedings to consider any changes required to the standard award clause flowing from the changes to CPI publication until 2027. For the 2026 Annual Wage Review, the FWC will derive quarterly figures for the relevant CPI series using the same averaging method adopted by the ABS to “ensure the adjustments are calculated using the same measurement framework on a like‑for‑like basis”. In summary, increases to expense-related allowances will be determined in 2026 in the same manner as all previous years, but the formula may be subject to minor adjustment from 2027 and beyond.