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What Every Employer MUST Know For 1 July 2023

26-Jul-2023 13:41 | Cassidy Lau (Administrator)

The commencement of a new financial year brings with it important changes and new rates which will apply from 1 July 2023.

NEW! National Minimum Wage (NMW)

With the NMW:

  • this is applicable to employees to whom neither a Modern Award or enterprise agreement applies
  • the NMW increases to become $882.80 per week or $23.23 per hour
  • the increase to the NMW will come into operation on 1 July 2023
  • in addition:

(a)   special NMW rates apply to employees with disabilities, junior employees, apprentices, and those on training arrangements

(b)   the minimum casual loading remains unchanged at 25%

NEW! Modern Award Increases

  • minimum wages to most Modern Awards increase by 5.75% (starting on the first full pay period on or after 1 July 2023)
  • absorption of wage increases into over-award payments remains permissible (subject to the terms of the relevant employment agreement and what other amounts are being absorbed into any annualised wage arrangement)
  • increases to the minimum wages of junior workers, apprentices, trainees, piece workers and employees on the supported wage system will occur
  • expense-related allowances in Modern Awards will increase as set out in the Modern Award (eg, by the applicable CPI index figure)
  • annualised salaries will need to be reviewed to ensure they continue to properly absorb/include all relevant minimum Modern Award amounts and that they continue to meet any technical notification and reconciliation requirements applying to annualised wage arrangements in certain Modern Awards

NEW! Impact on Enterprise Agreements

With enterprise agreements:

  • they must always meet or exceed the minimum wage of:

(a)   the relevant Modern Award (ie, the Modern Award that would have applied had the enterprise agreement not been in existence)

(b)   the NMW (ie, where a Modern Award would not apply even if the enterprise agreement was not in existence)

  • thus, pay rates in enterprise agreements may need to be increased (even if the enterprise agreement has its own wage increase regime)

NEW! The Sting

Be mindful that wage increases may have flow-on effects such as increasing:

  • the value of leave loading, penalty rates, overtime and superannuation contributions
  • the value of accrued leave entitlements
  • the cost of wage related expenses such as payroll tax and workers compensation premiums

NEW! High Income Threshold (HIT)

With the HIT:

  • it increases to $167,500
  • it impacts:

(a)   who can make a claim for unfair dismissal (for those not covered by a Modern Award or to whom an enterprise agreement does not apply)

(b)   the maximum amount of compensation payable in an unfair dismissal claim (which increases to $83,750)

(c)   those on a 'guarantee of annual earnings' (a Modern Award does not apply to an employee whenever this guarantee is in place provided it continues to meet the relevant legislative requirements)

NEW! Redundancy

The tax-free component of a genuine redundancy payment increases to be:

  • a base amount of $11,985
  • an additional amount of $5,994 for each completed year of service

NEW! Superannuation Contributions Base

With superannuation:

  • the superannuation guarantee rate increases to 11.0%
  • the maximum superannuation contribution base increases to $62,270 per quarter ($249,080 per annum)
  • an employer is not required to make superannuation contributions on behalf of employees on earnings in excess of that maximum contribution base


If you have any questions about the above or would like any other employment related assistance, please contact our Matthews Folbigg Workplace Solutions employment law team.

Stewart Gough 
T: (02) 9806 7483
M: 0458 586 444

Peter Doughman
Senior Associate
T: (02) 9806 7412
M: 0404 020 409

DISCLAIMER: This article is provided to readers for their general information and on a complimentary basis. It contains a brief summary only and should not be relied upon or used as a definitive or complete statement of the relevant law.

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