8 HR changes for FY2026 you need to know

The new financial year isn’t just another date on the calendar, it’s a line in the sand for compliance, payroll and workplace rights.

From rising super contributions to expanded paid parental leave, several changes take effect on 1 July 2025, while others, introduced in the past 12 months, are now unavoidable. 

Here’s your FY26 HR Playbook: eight critical updates every Australian business needs to take action on now.

1. Super Guarantee hits 12%, but cap drops

From 1 July, the Superannuation Guarantee (SGC) increases from 11.5% to 12%. But for the first time, the maximum super salary base has decreased, from $262,500 to $250,000. That means the annual SGC cap is now $30,000 (12% of $250,000).

The concessional contributions cap also remains unchanged at $30,000, bringing it into alignment with the SGC cap.

Why it matters:

The change to the SGC contribution increases payroll costs, affects total remuneration and “plus super” contracts and introduces a trap. You may now breach the concessional cap with standard SGC alone.

What to do:

• Review high earners’ contracts carefully.
• Check for total-rem structures that relied on the higher SGC base.
• Flag salary-sacrifice arrangements that could unintentionally exceed the cap.

2. Minimum wage increases 3.5%

The National Minimum Wage rises to $24.95/hour or $948.70/week, effective 1 July 2025. Updated award schedules have now been published.

Why it matters:

Modern award rates move in lockstep, and casual rates must include the 25% loading, bringing the minimum casual hourly rate to $31.19.

What to do:

• Update payroll systems with new award rates.
• Re-check junior, apprentice and part-time rates against the latest schedules.
• Communicate the increase to impacted staff.

3. High-income threshold increases to $183,100

The Fair Work Commission has confirmed that the high-income threshold for unfair dismissal claims rises to $183,100 from 1 July (up from $175,000).

Why it matters:

Employees earning above the threshold can’t file unfair dismissal claims (but they can still bring unlawful termination ones). However,  general protections still apply and awards may still cover them.

What to do:

• Identify anyone close to the threshold.
• Review upcoming salary increases that may push someone over.

4. Redundancy tax-free thresholds increase

From 1 July, the ATO’s tax-free redundancy cap increases to $13,100 + $6,552 per full year of service.

Why it matters:

After-tax severance entitlements may shift, and old calculators may be using outdated numbers.

What to do:

• Update redundancy modelling tools and termination letters.
• Check your treatment of long-tenured staff and top-tier packages.

5. Paid Parental Leave expands to 24 weeks

From 1 July 2025, the Federal Government’s Paid Parental Leave scheme increases to 24 weeks (120 days) for eligible births or adoptions.

Why it matters:

This affects employer top-up policies, return-to-work plans and your long-term leave liability.

What to do:

• Update your leave request forms and payroll settings.
• Communicate entitlements clearly to expecting parents.
• Review the interaction between government and employer-paid leave.

6. Right to Disconnect extends to small business

The Right to Disconnect, already in force for large employers, takes effect for small businesses (<15 employees) on 26 August 2025.

Why it matters:

Employees will have the legal right to ignore unreasonable out-of-hours contact. Failure to comply can trigger Fair Work orders.

What to do:

• Draft and publish a workplace disconnection policy.
• Train managers on respectful contact outside hours.
• Review rostering, stand-by and on-call expectations.

7. Same Job, Same Pay fully operational

This reform took effect on 1 November 2024, but FY25 is when many businesses will feel the full impact. Labour-hire workers must now receive equal pay to host-site employees performing equivalent roles.

Why it matters:

Labour-hire and contracting costs may rise. Misalignment exposes employers to penalties and reputational risk.

What to do:

• Map affected labour-hire arrangements across all departments.
• Review enterprise agreements and agency contracts for compliance.
• Brief procurement and finance teams on project cost impacts.

8. Stage 3 tax cuts are live… and still catching people out

The restructured Stage 3 tax cuts came into effect 1 July 2024, with updated PAYG withholding tables issued for FY2025 that remain current into FY2026. (Although a new tax cut is coming next financial year). 

Why it matters:

If your payroll system hasn’t updated properly, employees may be over- or under-withheld,  triggering ATO penalties and employee frustration.

What to do:

• Confirm payroll software is using the latest tax tables.
• Reassure staff by communicating expected net pay impacts.
• Run a spot audit across recent pay runs to double-check.

Are you FY2026 ready?

As FY2026 begins, there are plenty of HR-related changes that businesses need to be on top of. 

If you have any questions regarding the changes or are keen to find out how they could impact you or your business, speak with one of the Catalina Consultant team members today.