Every year the wage decision comes down, gets a day of headlines, and then most trade business owners file it under "something my bookkeeper handles" and move on. This year that's a mistake, not because the increase itself is large, but because of what it's landing on top of. The 4.75% award rise from 1 July isn't the whole story. It's the last brick on a wage bill that's already been quietly getting heavier all year, and if your prices haven't moved to match, your margin has just shrunk without you deciding it should.
What actually changed on 1 July
The Fair Work Commission handed down its Annual Wage Review 2026 decision, and it takes effect from the first full pay period starting on or after 1 July 2026. Two numbers matter.
Modern award minimum wages went up 4.75%. That's the one that hits most trade businesses, because the great majority of your employees, apprentices, labourers, qualified tradespeople, are paid under a modern award such as the Building and Construction, Electrical, or Plumbing awards. The National Minimum Wage, which covers the small number of workers not under any award, went up by about 6% to $26.44 an hour, or $1,004.90 a week. You can read the detail straight from the source on the Fair Work Ombudsman's Annual Wage Review 2026 page.
So for planning purposes, the number to hold in your head is 4.75% on your award-covered wages, applied from your first full pay period in July.
"But I pay above award" doesn't get you out of it
The most common reaction from owners who already pay their people well above the minimum is to assume this doesn't touch them. It does, in two ways.
First, the award is the floor, and the floor just rose. If any of your people, especially apprentices and juniors, were sitting close to the award rate, they may now be below it, and paying below the applicable award rate is a compliance problem, not a preference. You need to actually check, not assume.
Second, and this is the one that quietly costs you, the whole market's costs went up at once. Your competitors' labour costs rose too, but so did the wage expectations of everyone you employ or want to employ. Award increases pull the going rate up across the board. If you hold your own above-award pay flat while the floor climbs toward it, you've narrowed the gap that made you a good place to work, and in a trade where good staff are the constraint, that gap is worth protecting.
The bit that makes it bite: it's not just 4.75%
Here's what turns a manageable rise into a margin problem. The wage increase isn't landing on a flat cost base. It's landing on wages that already carry more on-costs than they did a year ago.
Super now sits at its full 12% rate, and since 1 July it has to be paid on the same cycle as wages under payday super, not parked and paid quarterly. So every dollar of that 4.75% pay rise also carries 12% super on top of it, and that super now leaves your account every single pay run. Then add the flow-on to anything calculated as a percentage of wages, and the true cost of the increase to your business is meaningfully more than the headline 4.75%.
None of these are optional and none of them are new arguments to have. They're settled. What's not settled is whether your pricing has kept up, and for most trade businesses the honest answer is no, because prices tend to move once a year if that, while costs have moved several times.
Gold nugget. Work out your true fully-loaded hourly cost for a tradesperson, then compare it to what you're actually charging out per hour, and do it today rather than at tax time. Take the new award hourly rate, add 12% super, add workers comp, add leave loading and public holidays, add the non-billable hours (travel, quoting, admin) that you still pay for but can't invoice. That fully-loaded number is what an hour of that person actually costs you. If your charge-out rate is a fixed multiple of the old wage, that multiple just shrank, and your margin shrank with it. Most owners have never done this calculation once. The ones who do it every July are the ones whose profit doesn't quietly leak away.
The move most owners skip: reprice, don't absorb
The instinct when costs rise is to absorb them, quote the same as last month, and hope volume covers it. That's how a busy trade business ends up busier than ever and no better off, the exact trap we pull apart in Why Most Tradies Are Busy But Not Profitable. A 4.75% wage rise absorbed rather than passed on comes straight off your bottom line, and your bottom line is a lot thinner than 4.75%, so proportionally it hurts far more than the number suggests.
The fix isn't complicated, it's just uncomfortable: your rates need to move when your costs move. If your labour just got 4.75% more expensive before on-costs, and materials and insurance and everything else have crept up too, then a quote priced on last year's cost base is a quote that makes you less money than you think it does. This is the annual discipline of pricing your services so you actually make money: not a one-off exercise, a review you run every time the cost base shifts, and the wage decision is the clearest signal of the year that it has.
While you're at it, check the compliance basics
Since you're in the payroll system anyway, the wage rise is a good prompt to confirm two things are actually right, because getting them wrong is expensive and the penalties don't care that it was an accident.
Confirm the new award rates are loaded correctly in your payroll software from the right pay period, not backdated wrong or applied a week late. And confirm your payday super is genuinely working the way it's meant to now that it's live, on time, on the full rate, every run. We laid out exactly what to verify in Payday Super Is Now Live: Your First-Month Checklist, and the wage increase is a natural moment to run that check while you've got the payroll open. If you want the full run of what else is changing across 2026 and 2027, Beyond Payday Super covers the lot.
The wage decision itself is not the thing to worry about. It's fair, it's expected, and good staff are worth it. The thing to worry about is a wage bill that rose while your prices stood still, because that's a decision you didn't make on purpose. If you want a straight look at whether your rates are actually covering your real, current cost of doing the work, that's one of the numbers we go through in the Trade Business Health Check: a fixed-price review of your numbers and your pricing, with a written plan of what to fix first.