Millions of Australian workers will automatically receive a pay rise when minimum and award wages increase from July 1. The Fair Work Commission has announced an increase of 3.5 per cent

The decision means that the national minimum wage will be $24.95 an hour, or about $948 a week, based on a 38-hour week. That’s up from $24.10 an hour, which is $915.90 per week.

About 2.9 million workers will be impacted by the commission’s review, or 25 per cent of all Australian workers.

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The 3.5 per cent increase has fallen short of what the Australian Council of Trade Unions (ACTU) had been calling for at 4.5 per cent, but is higher than what industry groups wanted at around 2.5 per cent.

The Albanese government had called for an increase above inflation.

The Consumer Price Index is currently 2.4 per cent, however, the Reserve Bank of Australia (RBA) predicts prices will rise by 3.1 per cent over the year to June 2026.

ACTU national secretary Sally McManus said it was essential for the country’s lowest paid workers to receive a pay rise above inflation.

"It's about whether you can keep up with your bills or not, it's whether or not your life gets slightly better, whether it stays the same or whether it goes backwards. It's everything,” she said.

"When you're on those wages, you're not saving money. Everything you earn, you spend."

The Commission handed down a 3.75 per cent wage increase last year.

Economists will be keeping a close eye on the decision and whether it could impact the RBA's interest rate decision.

AMP chief economist Shane Oliver said a 3.5 per cent increase, which is midway between union and employer demands, would give workers as "real wage rise"

"[But] it’s not so high as to add to the risk of a wage price spiral and it’s around current wages growth," he said.

Superannuation boost coming July 1

Australian workers will also be getting an automatic boost to their retirement savings when compulsory superannuation payments increase on July 1.

The super guarantee rate will increase from 11.5 to 12 per cent. This is the final legislated increase to the rate.

According to the Super Members Council, the typical retirement balance is now projected to reach $500,000 in 30 years.

“This increase to people’s super is a powerful step forward for Australians’ financial futures. But too many people don’t yet know it’s happening,” Super Members Council CEO Misha Schubert said.