From 1 July 2024, the minimum wage will increase by 3.75%, up from $23.23 an hour to $24.10, following the Fair Work Commission (FWC) ruling on 3 June 2024.
This is expected to impact around 2.6m Australians and means those working a 38-hour week receiving the minimum wage would have their pay increased from $882.80 to $915.90 per week or an extra $33 per week.
The FWC sighted the ongoing cost-of-living pressures that modern award-reliant employees continue to experience in Australia as being the primary reason for their decision. And that the increase was consistent with forecasts of inflation returning to target next year.
Impacts on SMEs
Those employers with employees covered by awards will need to ensure they make this adjustment to the minimum wage on 1 July 2024. At the same time, the superannuation guarantee rate also increases on 1 July 2024 from 11% to 11.5%.
These two increases are putting a lot of pressure on SMEs given rising energy, rent, insurance and borrowing costs. As Chief Executive of the Council of Small Business Organisations Australia, Luke Achterstraat, commented “that while businesses support wage increases for employees, employers are already battling rising costs in a tough economic climate.
Unfortunately, the decision today, will mean higher costs and more cost pressure for small businesses who are really struggling to churn out a profit and to remain in business at the moment”.
However, the FWC responded, “Modern award minimum wages remain, in real terms, lower than they were five years ago, notwithstanding last year’s increase of 5.75 per cent, and employee households reliant on award wages are undergoing financial stress as a result.”
How Falanga & Co can help
If you are unclear about your business obligations in relation to the FWC minimum wage increase ruling Falanga & Co team are always here to help. For existing clients please get in touch with your Falanga & Co accountant today.
For those who are not Falanga & Co clients and need assistance, we invite you to click here to schedule a discovery call with a member of our team.
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