Minimum Wage and 12% Superannuation: Help for Businesses in Wollongong and the Illawarra

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The Fair Work Commission has increased the National Minimum Wage, effective from 1 July 2025.

The Superannuation Guarantee Legislation has increased the Superannuation entitlement to 12% of pay from 1 July 2025.

What is the change?

The Fair Work Commission has announced a 3.5% rise in the National Minimum Wage and minimum award wages, effective from the first full pay period after 1 July 2025.

The Superannuation contribution is also effective from the first full Pay period after the 1st July 2025

Key details for National Minimum Wage:

National Minimum Wage: From 1 July 2025, the new rate will be $948.00 per week, or $24.95 per hour.
Award Minimum Wages: Similarly, wages under awards will also see a 3.5% increase from the first full pay period starting after 1 July 2025.
The new national minimum wage applies to employees not covered by an award or agreement. Those covered by awards will see their pay adjusted according to the latest award rates.

Superannuation is calculated on Ordinary Time Earnings (OTE).

OTE does not include reimbursement of expenses incurred by the employee in the context of their employment.

For Example, A salesperson. In addition to his regular salary, he receives $300 per month to cover expenses he is expected to incur while visiting clients, such as travel and mobile phone costs. The salesperson is likely to use the whole allowance in the course of visiting clients.

The $300 allowance is not OTE, salary, or wages because it’s not a reward for services.

The supernation contribution of 12% is not payable on the allowance.

What does this mean for you?

Adjust payroll: Update your payroll system to reflect the new minimum wage rates by 1 July 2025. Ensure that the changes take effect from the first full pay period commencing on or after this date.

Review employee agreements: If a registered agreement covers your employees, verify that the base pay rate in the deal is not less than the new minimum wage or award rate. Adjust if necessary to comply with the latest standards.

Communicate: Inform your employees about the changes in their pay rates before the implementation date. Clear communication will help manage expectations and maintain transparency.

NEED HELP? CONTACT JOHN ON 0407 069 507.

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