2026 Annual Wage Review Decision
On 2 June 2026, the Fair Work Commission (Commission) announced an increase in the modern award wage rates of 4.75%, effective from 1 July 2026. Naturally, the increase applies to the Pastoral Award 2020, which covers many dairy farm employees.
The National Minimum Wage will increase to $1,004.90 per week, or $26.44 per hour, also effective from 1 July 2026.
In making its decision, the Commission acknowledged the Middle East conflict and its impact on the Australian economy.
A summary of the Commission’s decision can be accessed via Annual Wage Review 2026 | Fair Work Commission
Based on prior years’ decisions, it is anticipated that pay guides for each award will be updated prior to the end of June.
(Following the 2025 annual wage decision, all pay guides were finalised by 21 July 2025). Once finalised, they will be accessible via https://www.fairwork.gov.au/pay-and-wages/minimum-wages/pay-guides
What does this mean for employers?
If you have employees paid under the Award, they must receive the new minimum rates from 1 July 2026.
Award allowances will also increase and should be checked as part of your annual payroll review.
If you are paying employees above Award rates, you do not have to pass on in full the 4.75% increase. It is essential, however, that their pay remain at or above the new Award minimum.
If you are paying an employee an annual salary, it is essential that the employee remains Better Off Overall (BOOT) and that all the requirements of clause 17 of the Award are met. The Award can be accessed via Pastoral Award 2020 [MA000035] - Fair Work Ombudsman
What should farmers do now?
Review all employee classifications under the Pastoral Award – clause 31 of the Award, noting that the Dairy Operator Classifications apply to levels 1, 2, 3, 5, 7 and 8.
Compare current pay rates against the updated Fair Work Ombudsman Pay guides, once published.
Carefully review and amend, if necessary, annual salary and annualised wage arrangements.
Update payroll systems before the first full pay period commencing on or after 1 July 2026.
While businesses already paying well above Award rates may experience limited impact, farms paying at or close to the Award rates must make adjustments to remain compliant.
SADA members with questions regarding the Annual Wage Review or their employment obligations are encouraged to seek advice before implementing changes ). Contact with Workplace Horizons can be made via our website Contact — WP Horizons, or by calling Laurie or Robynne Bolton on
0410 529 528 or 0423 764 377 respectively.
Workplace Horizons will provide a further member’s update, with the applicable new pay rates, once they are available.
Disclaimer
The information contained in this client update is general in nature and is provided for information purposes only. It does not constitute legal advice.
While care has been taken to ensure the information is current and accurate at the time of publication, laws and interpretations may change.
For advice specific to your circumstances, please contact us directly.