From the first full pay period on or after 1 July 2026, modern award rates rose by 4.75%. For most construction businesses that is already flowing through payroll. The headline percentage was the easy part. The harder question, and the one that costs real money, is what it has done to the margin on jobs you priced before it landed.
Start with the part that hurts builders and trade contractors specifically.
If you priced a fixed-price job earlier this year on the old labour rates, and that job is still running, the increase now comes straight out of your margin. You cannot reprice a contract that is already signed, and the longer the job runs, the more of it you wear.
This is a costing problem, not a payroll one. If your tender templates still carry pre-July labour rates, every quote you have sent this month is quietly under-pricing the work. That is the leak worth finding this week, not next quarter.
Most on-site workers are paid under an award, the Building and Construction General On-site Award, the Plumbing and Fire Sprinklers Award, the Electrical Award, or the Joinery Award depending on the trade, or under an enterprise agreement.
If your team is on an award, the 4.75% applies directly. If you run an enterprise agreement, it can still reach you, because base rates in an agreement cannot sit below the relevant award. Apprentice and trainee rates move with it too.
(The National Minimum Wage rose separately, by a larger amount, but it only covers workers outside any award. In construction that is a small group, so for most crews the award figure is the one that matters.)
So, the first job is to confirm which awards or agreements actually apply to your people, and which classifications are affected.
The 4.75% lift applies across modern award rates. It takes effect from your first full pay period on or after 1 July, so a pay cycle that straddled the date moved to the new rates at the start of the next full period, not part-way through.
For the small number of workers on the National Minimum Wage, that rate is now $1,004.90 a week, or $26.44 an hour. The entry-level rate for the first six months of employment is $978.10 a week, or $25.74 an hour. The casual loading for award and agreement-free employees stays at 25%.
The increase is bigger than the line on the payslip. A higher base rate also lifts:
Across a full crew, the all-in increase is meaningfully more than 4.75% of base wages alone. That gap is the part owners most often miss when they wave the rise through as “just under five per cent.”
The increase is in effect, so this is recovery and repricing, not preparation:
A 4.75% rise is manageable when you have priced for it. It hurts when it lands on jobs costed for a cheaper year. The builders who stay in front of this treat 1 July as a costing date, not just a payroll date, and go looking for the margin movement rather than waiting to find it in a job that came in tight.
If you want a clear read on what the increase has done to your labour budgets, job margins and forecast for the year ahead, speak with our team.
