Payroll just changed again. Here’s what to check before your next pay run

If you run payroll for your workshop, the ground shifted under you on 1 July with changes to superannuation. The Fair Work Commission handed down its 2026 Annual Wage Review decision on 2 June and the changes took effect from the first full pay period on or after 1 July. If you haven’t checked your rates and classifications since, now’s the time.

What actually changed

Modern award minimum wages went up 4.75 percent. That’s a bigger jump than last year’s 3.5 percent increase and it applies across the board to award reliant employees, which covers most workshop staff paid under the Vehicle Repair, Services and Retail Award.

Here’s what that looks like in real numbers, straight from the Fair Work Ombudsman’s own pay guide for the award, published 24 June 2026:

• RS&R Level 1, the entry rate, $25.74 an hour, $978.10 a week
• RS&R Level 2, $26.44 an hour, $1,004.90 a week
• Tradesperson Level I, $29.45 an hour, $1,119.10 a week
• Tradesperson Level II, $32.22 an hour, $1,224.40 a week

Worth noticing, Level 2’s weekly rate now matches the new National Minimum Wage exactly, $1,004.90. The award’s lowest classifications are directly tied to that national figure, so when the NMW moves, so does the floor of your award.

The classification check that’s easy to miss

There’s a change that isn’t about the percentage at all. Since January 2025, the award has limited how long an employee can sit at RS&R Level 1. It’s meant to be a genuine entry point, up to 38 hours of induction training, not a long term holding pattern. Within three months, that employee needs to be reclassified to Level 2 or above and paid accordingly.

It’s an easy one to lose track of when you’re flat out on the tools and it sits completely separate from the annual wage review, so a payroll system update alone won’t catch it. If you’ve got anyone who started around April or May and is still sitting at Level 1, that’s worth checking now.

Why this year’s number is bigger than usual

The Fair Work Commission was upfront that this was a tighter than normal call. Inflation ran hotter than forecast through the year and the Reserve Bank held monetary policy tight in response. The Commission’s reasoning was that it needed to stop award reliant workers falling further behind in real terms, without pushing an increase so large it created its own problems elsewhere. Employer groups had argued for something closer to 2 to 4 percent, unions wanted 6 percent, and the Commission landed at 4.75, closer to the union position than most employers expected.

None of that changes what you need to do. It just explains why the jump feels bigger than last July’s.

What to check this week

First, confirm your payroll system has actually pulled through the new rates and that they match the figures set in July updates. Most software updates automatically, but automatic doesn’t mean correct, check a payslip against the award directly.

Second, look specifically at anyone sitting at Level 1. If they’ve been there more than three months, they should already be reclassified and that’s a separate check from the general wage increase.

Third, if you’ve got staff on annualised salaries or set off arrangements rather than straight award rates, check the maths still clears the new minimums, particularly for anyone working regular overtime or weekend shifts. An annualised salary that comfortably covered award entitlements last financial year might not clear the bar this year.

Where to get it checked

If you’re an AAAA member, Employer Assist exists precisely for this kind of check, a short call can confirm you’re covered before you run another pay cycle. If you’re not a member, the Fair Work Ombudsman’s own Pay and Conditions Tool and pay guide for MA000089 are free to use and are the same source the figures above come from.

Payroll compliance isn’t glamorous. It’s not the reason anyone got into this trade. But it’s the difference between a Tuesday spent on the tools and a very bad Tuesday spent explaining yourself to Fair Work. Twenty minutes now, against the current award rates, is cheap insurance either way.