New Financial Year, New Employer Obligations: What Businesses Need to Review
The start of a new financial year is an important time for employers to check that their workplace obligations, payroll systems and employment arrangements are up to date.
From 1 July 2026, several changes affect employers, including changes to superannuation payment timing, and increases to minimum wages and award rates.
For businesses, these changes are a timely reminder that employment compliance is not a “set and forget” exercise. Even small payroll or workplace management issues can create legal, financial and operational risks if they are not addressed early.
Payday Super: superannuation must be paid with wages
One of the most significant changes for employers is the commencement of Payday Super.
Employers are now required to pay superannuation at the same time as wages. In practical terms, this means businesses need to ensure their payroll systems, cash flow processes and superannuation clearing arrangements are working properly so that employee super contributions are paid on time.
For employers who have historically paid super quarterly, this may require a substantial change in process.
Failing to pay super correctly can expose employers to penalties, interest and compliance action. It can also damage employee trust, particularly where superannuation errors are discovered after a long period of underpayment.
Minimum wage and award wages have increased
Employers also need to ensure they are applying the new minimum wage and award rates from the correct date.
From the first full pay period starting on or after 1 July 2026, the National Minimum Wage increased to $1,004.90 per week or $26.44 per hour. Minimum award wages also increased.
A common mistake is assuming that salaried employees are automatically unaffected by award increases. In many cases, employers still need to ensure that the salary is sufficient to cover the employee’s minimum entitlements under the applicable award or enterprise agreement.
Employers who utilise individual employment agreements or “above Award” employment agreements designed to offset Award entitlements should review these arrangements carefully. The increase in minimum Award rates may reduce or eliminate the buffer that previously ensured compliance. Employers should check whether the salary still leaves the employee better off overall when compared with their award entitlements.
Without a review, employers could unintentionally find themselves paying employees less than their minimum lawful entitlement from 1 July, exposing the employer to potential underpayment claims, back-pay liabilities, penalties, and compliance risks.
Employers should review contracts and policies
The new financial year is a good time for businesses to review whether their employment documents and workplace systems are current.
Employers should consider reviewing:
- employment contract templates;
- award classifications;
- workplace health and safety policies;
- bullying, harassment and grievance policies;
- performance management procedures;
- flexible work and leave policies;
- contractor arrangements; and
- record-keeping processes.
For businesses that have grown quickly, have not reviewed employment contracts for some time, or rely on older templates, there may be gaps that only become obvious once a dispute or compliance issue arises.
Review of employment contracts is also recommended to prepare for proposed restrictions on non-complete clauses and reforms or updates to the National Employment Standards and Fair Work Act being considered by government.
Practical steps for employers
Employers should consider taking the following steps:
- Check that all employees are being paid at least the new minimum wage or applicable award rate.
- Confirm that superannuation is being paid in line with Payday Super requirements.
- Review employment contracts and workplace policies.
- Train managers on handling workplace complaints, performance issues and psychosocial risks.
- Keep accurate records of wages, superannuation, leave, hours of work and employee classifications.
- Obtain advice before making significant changes to contracts, pay structures or workplace arrangements.
The key takeaway
The 1 July changes are a reminder that employers need to stay on top of workplace compliance.
Getting advice early can help employers identify gaps, reduce risk and ensure their business is meeting its legal obligations. If we can assist you in these areas please call us on 9525-8688 or click here to contact us.
