Annual wage review 2026: new wage and allowance determinations released ahead of 1 July changes

The Fair Work Commission (FWC) has released the final determinations for the Annual Wage Review 2026, confirming increases to minimum wages and expense-related allowances across Australia's modern awards.

The changes will take effect from the first full pay period on or after 1 July 2026, requiring early childhood education and care providers to review payroll systems, budgets and workforce planning arrangements before the new rates come into force.

The determinations follow the Expert Panel's Annual Wage Review 2026 decision and include updated wage schedules, revised allowances, a new National Minimum Wage Order and amendments to the Supported Wage System.

What the decision means for the ECEC sector

The Annual Wage Review affects thousands of educators, teachers and support staff working across the early childhood education and care sector.

For employees, the changes will result in increased minimum rates of pay from July.

For providers, the decision creates an immediate compliance obligation to ensure all applicable wage rates and allowances are updated from the first full pay period on or after 1 July.

The final determinations contain the legally binding rates that employers must apply, including revised minimum wages and expense-related allowances.

Key changes educators and providers should know

Minimum wages will increase

The updated rates apply to employees covered by modern awards, including many Certificate III educators, diploma-qualified educators, early childhood teachers and support staff.

While the percentage increase was outlined in the Annual Wage Review decision, the final determinations provide the specific hourly and weekly rates that employers must implement.

Allowances have been updated

A range of expense-related allowances have also been adjusted.

Depending on award coverage, this may include allowances relating to:

• first aid responsibilities
• clothing and laundry expenses
• meals
• vehicle use
• other award-specific provisions.

Providers should review the relevant award schedules to ensure allowances are updated correctly.

Supported Wage System changes

The Fair Work Commission has also published an updated determination relating to the Supported Wage System.

The changes affect employees who are assessed and paid under Supported Wage System arrangements and should be reviewed by employers where applicable.

How does this interact with the Worker Retention Payment?

The Annual Wage Review operates separately from the Australian Government's Worker Retention Payment (WRP), which was recently extended until November 2028.

For participating providers, the new award rates become the minimum legal rates of pay from the first full pay period on or after 1 July 2026. Services must continue to meet all Worker Retention Payment requirements while ensuring employees receive at least the updated award rates.

While the WRP provides funding support for eligible wage increases, providers should be aware that increases to award wages may also affect broader employment costs, including:

• superannuation contributions
• leave liabilities
• payroll tax (where applicable)
• workers compensation premiums
• other wage-related on-costs.

Services participating in the WRP should review payroll systems, wage schedules and workforce budgets to ensure both compliance and funding obligations continue to be met.

What providers should do now

With implementation required from the first full pay period on or after 1 July, services should begin preparing immediately.

Key actions include:

• updating payroll systems and software
• reviewing applicable award classifications
• adjusting allowances in line with the new determinations
• reviewing workforce budgets for the 2026–27 financial year
• communicating changes to employees
• confirming enterprise agreements continue to meet legal requirements
• checking educator and teacher classifications for accuracy.

Failure to apply the updated rates may expose employers to underpayment claims and compliance action.

Another consideration for workforce planning

The wage increases arrive at a time when many providers continue to face workforce shortages, rising operating costs and increasing expectations around quality and compliance.

For educators and teachers, the changes provide a welcome increase in minimum award wages.

For providers, the decision represents another important planning consideration as services balance workforce investment, operational sustainability and the ongoing challenge of attracting and retaining qualified professionals.

While annual wage reviews are a routine part of Australia's workplace relations system, the latest changes arrive during a period of continued workforce pressure across early childhood education and care, making it essential for providers to understand their obligations and prepare early.

Source: Fair Work Commission, Annual Wage Review 2026 Decision [2026] FWCFB 3500, National Minimum Wage Order and associated wage determinations.