Award wages rose 4.75 per cent. Here is what it did to your appraisal
The Annual Wage Review 2026 lifted award minimum wages by 4.75 per cent from 1 July. On a wage heavy business that is a direct hit to earnings, and it changes the number a buyer works from.
General information only, not financial, legal or taxation advice. Tony Pope holds Queensland Office of Fair Trading licence 4963575.
The short version
- Modern award minimum wages and the national minimum wage rose 4.75 per cent from 1 July 2026. The national minimum wage is now $1,004.90 a week, or $26.44 an hour.
- On a business where wages are 35 per cent of revenue, a 4.75 per cent increase costs roughly 1.7 per cent of revenue straight off the bottom line if nothing else moves.
- A buyer prices forward, not backward. FY26 accounts that predate the increase will be adjusted by their accountant whether or not you adjust them first.
- The businesses that hold value are the ones that can show the increase was passed on, absorbed by productivity, or already reflected in current trading.
The Annual Wage Review 2026 increased modern award minimum wages and the national minimum wage by 4.75 per cent, operative from 1 July 2026. The national minimum wage became $1,004.90 a week, or $26.44 an hour. The decision also carried a structural adjustment, lifting the C13 rate by an additional amount representing one third of the difference between the C13 and the C12 rates.
If you employ people under an award, that landed in your payroll ten weeks ago and it is in your numbers now.
The arithmetic nobody enjoys
Take a business turning over $2 million with wages at 35 per cent of revenue, so $700,000. A 4.75 per cent increase on the award linked portion is roughly $33,000 a year, before the flow through to superannuation, workers compensation and leave accruals, which is another ten to fifteen per cent on top of the increase itself.
Call it $36,000 to $38,000 all in.
Now put that against earnings. If the business was returning $250,000 to an owner, and none of the increase was recovered, earnings are now somewhere near $213,000. At a multiple of three, the price moved by more than $110,000.
That is not a wage problem. That is a pricing and productivity problem that shows up in the wage line.
What a buyer does with it
They adjust forward, which is the thing owners consistently underestimate.
A buyer looking at FY26 accounts is looking at a year that ended before the increase applied. Their accountant will restate the wage line to the current cost base as a matter of routine, because they are buying next year, not last year. If your appraisal is built on unadjusted FY26 earnings and theirs is built on adjusted earnings, there is a gap between the two of you that has nothing to do with negotiation and everything to do with which year you are each talking about.
Far better to do that restatement yourself, show it, and control the framing.
The three outcomes, and they are very different
Passed on. Prices moved, customers stayed, margin held. Show the price increase and the revenue for the months since. This is the strongest position and it is worth evidencing properly.
Absorbed by productivity. Rosters changed, a process improved, the same work is done with fewer hours. Show hours against revenue by month rather than just dollars, because that is where it is visible.
Absorbed by margin. Nothing changed and the money came out of profit. This is the honest answer for a lot of businesses and it needs to be said rather than hidden, because it will be found. What helps is separating it clearly, so a buyer can see it is one identifiable movement rather than a general decline.
What to do in the next month
Pull your gross margin and your wages to revenue ratio by month for the last eighteen months. Mark the July line. Look at what the six months since actually did.
If the ratio stepped up in July and has not come back, you know what the conversation with a buyer is going to be, and you have time to do something about it before it is a negotiation rather than a plan.
If it stepped up and recovered, you have just built the single most useful page in your information pack, and most sellers in your position will not have it.
Common questions
How much did the minimum wage go up in July 2026?
The Fair Work Commission's Annual Wage Review 2026 decision increased modern award minimum wages and the national minimum wage by 4.75 per cent, operative from 1 July 2026. The national minimum wage became $1,004.90 per week or $26.44 per hour. The decision also included a structural adjustment lifting the C13 rate by an additional amount representing one third of the difference between the C13 and C12 rates.
Does a wage increase reduce what my business is worth?
Only to the extent it reduces sustainable earnings. If the increase was passed through in pricing, or offset by roster or productivity changes, the earnings a buyer is pricing are unchanged. If it was absorbed and margin fell, then yes, and the fall is capitalised by whatever multiple applies.
Should I wait for a full year of post-increase trading before selling?
Not automatically. A buyer will want to see enough months at the new cost base to believe the margin holds, and three to six clean months of that usually does more than waiting a full year. Waiting also has a cost, because you are carrying the risk of the following year's decision as well.
Keep reading
All notes on selling a business · All seller guides · What is my business worth?
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