You've hired your first employee, or you're about to, and you need to know what you legally must pay. The answer depends on whether your employee is covered by a Modern Award, an enterprise agreement, or neither — and the law sets different minimum baselines for each.
The National Minimum Wage is set by the Fair Work Act 2009 (Cth) and reviewed each year by the Fair Work Commission. It applies to employees who are not covered by a Modern Award or enterprise agreement. If your employee is covered by an Award, the award sets the minimum pay (and it cannot be lower than the National Minimum Wage). If they're covered by an enterprise agreement, the agreement cannot set pay below the applicable award or the National Minimum Wage.
Current minimum wage rates
| Entitlement | Rate (from 1 July 2025) |
|---|---|
| National Minimum Wage (adult, per week, 38 hours) | $948 |
| National Minimum Wage (adult, per hour) | $24.95 |
| National Minimum Wage (casual, per hour, includes 25% loading) | $31.19 |
These rates apply to adult employees not covered by an Award or enterprise agreement. The Fair Work Commission increased both the National Minimum Wage and Modern Award rates by 3.5% from 1 July 2025. More detailed pay guides for specific industries and award classifications are available on the Fair Work Ombudsman website.
Modern Awards
A Modern Award applies on an industry basis — aged care, fitness, retail, hospitality, and so on. If your industry is covered by a Modern Award and your employee does not have an enterprise agreement, the award sets their minimum pay.
Award rates vary by classification. A level 1 aged-care worker might be paid differently than a level 3. Within each classification, the award also sets penalty rates (for weekend or night work), allowances (for travel, tools, uniforms), and other conditions.
The Fair Work Commission maintains a tool to find which award applies to your industry. Once you've identified the right award, the pay guide will show the rates for each classification.
Award example
The Fitness Industry Award sets pay rates by employee level. A level 2 fitness instructor receives $19.47 per hour (weekday rate). A level 5 fitness specialist with an AQF Diploma receives $25.34 per hour. These rates include the prescribed penalty rates and allowances within the award, and they cannot be undercut by an employment contract.
Enterprise agreements
An enterprise agreement is a negotiated deal between you, your employees, and their representative (if any) that sets pay and conditions. Once approved by the Fair Work Commission, it replaces any applicable award.
The critical floor: an enterprise agreement cannot set the base rate of pay below the relevant Modern Award or the National Minimum Wage, whichever is higher.
If an agreement states a base rate lower than the award, the agreement is treated as if the award rate applies — and the rest of the agreement still stands. This protection is automatic; you don't need to rewrite the agreement.
Worked example: a small manufacturer
Your manufacturing business employs five people. None of them have a relevant Modern Award (you've checked using the Fair Work tool), and you don't have an enterprise agreement. Your employees are all paid the National Minimum Wage.
You hire an accounts administrator on a 40-hour week. The National Minimum Wage applies (no award, no agreement). You must pay at least $948 per week, or $24.95 per hour, regardless of the hours or the role title.
Alternatively, suppose two of your employees are covered by the Manufacturing and Associated Industries and Occupations Award. Their minimum pay is set by the award classifications: a process operator might receive $26.45 per hour, a technician $28.90 per hour. Even though the National Minimum Wage is lower, the award rate applies.
Now suppose you negotiate an enterprise agreement with all five employees. In the agreement, you propose a base rate of $23 per hour. The Fair Work Commission will not approve it — it's below the National Minimum Wage and (if applicable) below the award rates. If you somehow agreed to it in writing, the agreement would be treated as if the minimum wage or award rate applied instead.
When the standard rate doesn't apply
Casual and part-time: Casual employees receive a 25% loading on top of the hourly rate (currently $31.19 per hour) instead of paid leave. The loading is a substitute, not an addition. Part-time employees are entitled to their pro-rata share of award benefits (loadings, allowances, leave) based on hours worked.
Juniors and trainees: Modern Awards set lower minimum rates for employees under 21 and for apprentices and trainees. For example, a junior in the Retail Award might receive a percentage of the adult rate. Check the relevant award.
Employees with disability: In rare cases, an approved determination may set a lower rate for an employee whose disability affects productivity. This requires a formal assessment and approval.
Transitional periods: If a Modern Award is remade or an enterprise agreement commences, there may be transitional rules. These are fact-specific and warrant professional advice.
Getting the right figure for your facts
An Artificer Legal employment lawyer can help you confirm the minimum pay rate that applies to your employee. We'll identify whether a Modern Award covers your industry and role, advise on the relevant classification and any applicable allowances or loadings, and if you're negotiating an enterprise agreement, ensure the base rate and conditions comply with the Fair Work Act. We can also review your employment contracts to confirm they're not promising less than the legal minimum.
The difference between the minimum and what you should pay
The legal minimum is a floor, not a market rate. The minimum wage is $24.95 per hour; the market rate for a skilled tradesperson or specialist might be $35–50 per hour. If you're competing for talent, you'll need to pay above the minimum. But if you're asking "what's the least I can legally pay", the answer is one of the figures above — and it depends on which applies to your employee's role and circumstances. Don't assume an employment contract overrides the law. Get the structure right first.
The most common mistake is confusing the National Minimum Wage with the award rate. Many employers assume all employees are paid the National Minimum Wage, then discover an employee was entitled to an award rate $5–10 per hour higher. Check which applies to your industry and role before setting pay.