Key Employment Law Changes from 1 July – What Employers Need to Know

The high income threshold is rising, payday super is commencing, and award wages are going up. Here’s what to action before 1 July.

A number of important employment law changes take effect from 1 July 2026. Whether you are a small business or a large employer, these changes will affect your obligations and in some cases, your exposure. Below is a summary of the key changes and what you should be doing now to prepare.

The Headlines

From 1 July 2026:

• The high-income threshold is increasing to $190,100.
• New “payday super” rules require employers to pay superannuation at the same time as wages.
• Minimum rates of pay are increasing.

Each of these changes is addressed in more detail below.

High Income Threshold – Now $190,100

The high-income threshold is the earnings cap above which an employee who is not covered by a modern award or enterprise agreement cannot bring an unfair dismissal claim. From 1 July 2026, this threshold increases to $190,100. The contractor high income threshold will also increase to $190,100, and the compensation cap (the maximum amount the Fair Work Commission can order in an unfair dismissal case) will increase to $95,050.

This matters because any employee earning below $190,100 or any employee covered by a modern award or enterprise agreement regardless of earnings, will have access to the unfair dismissal jurisdiction of the Fair Work Commission.

Employers should review the salary levels of employees who were previously above the threshold, as some may now fall within the unfair dismissal jurisdiction for the first time. This is particularly relevant for employees who are not covered by an award or enterprise agreement.

The high income threshold is also relevant to employees who have provided guarantees as to annual earnings, so as to remove the award application for those employees. If you have employees who have received such an undertaking, you should ensure that the remuneration is now above $190,100.

Payday Super – New Rules from 1 July 2026

From 1 July 2026, employers will be required to pay superannuation contributions at the same time they pay their employees’ wages. This replaces the current system, which requires employers to pay super contributions at least every three months.

Under the new rules, super contributions must reach the employee’s nominated account within 7 business days of the salary or wages being paid. For the first super contribution for a new employee, contributions must be made within 20 business days of salary or wages being paid.

This is a significant operational change. Employers should begin reviewing their payroll systems and business processes now to ensure they are ready. This may include speaking with your payroll software provider, accountant, or registered tax professional. The Australian Taxation Office is the primary enforcement agency and has published guidance on the transition.

Minimum Wage Increases

The Fair Work Commission has handed down its 2026 Annual Wage Review decision. Modern award wages are increasing by 4.75% from the first full pay period on or after 1 July 2026. The National Minimum Wage is increasing to $26.44 per hour ($1,004.90 per week).

These increases apply from the first full pay period on or after 1 July 2026, not necessarily from 1 July itself. If your pay cycle starts mid-week and 1 July falls partway through, the new rates commence from the start of the next full pay period.

Any business with employees covered by a modern award needs to ensure that rates of pay including for employees paid above-award salaries, remain at or above the new minimum requirements.

What You Need to Do

1. Review employee earnings against the new $190,100 unfair dismissal threshold and consider whether any employees now fall within the unfair dismissal jurisdiction who were previously excluded.
2. Review your payroll systems and processes to ensure you can pay superannuation contributions at the same time as wages from 1 July.
3. Check whether you have employees covered by a modern award and update pay rates from the first full pay period on or after 1 July.
4. If you have an enterprise agreement, check that base rates of pay remain at or above the applicable modern award minimums.
5. If you pay above-award with set-off or annualised salary arrangements, review whether the new minimums can still be absorbed.

How we can help

If you wish to discuss any aspect of this newsflash or require specialist advice or assistance in relation to an employment law issue, please do not hesitate to contact us.