With 1 July just around the corner, now is a great time for employers to get across the key workplace changes coming into effect in the new financial year.

While some updates will require practical changes to your HR and payroll processes, others present an opportunity to review policies and internal procedures. There is also a significant proposed change to Victorian legislation that employers should be aware of, which may impact employees across the state regarding their ability to work from home.

 

Here’s a summary of the key changes coming into effect from 1 July 2026.

 

1. Minimum wage increases 4.75%

The 2026 Annual Wage Review resulted in increases in the National Minimum Wage and minimum wages in Modern Awards from 1 July 2026.

The National Minimum Wage will increase to $26.44 per hour (or $1,004.90 per week based on a 38 hour work week). Casual rates will attract a 25% loading to this rate.

Minimum wages under all Modern Awards will increase by 4.75%. This also brings increases to penalties and allowances.

 

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2. Payday Super

From 1 July 2026, employers are required to remit superannuation guarantee contributions on the same day that payroll is processed, so that super contributions reach an employee’s chosen superfund within 7 days.

There is a grace period for payment of a new employee’s first contribution, which allows for their payment to be made within 20 days of their first pay date.

Non-compliance with the new payment rules will result in penalties through an updated super guarantee charge, which will be payable from the next calendar day and attract interest on a daily basis.

 

What you need to do:

 

3. Superannuation contribution thresholds

As super contributions must now be paid at each pay period, the maximum contribution base for FY27 is an annual amount of $270,830 (previously it was a quarterly figure), which results in a maximum SG contribution of $32,499.60 in this financial year.

The maximum contribution base is the maximum base salary that an employee earns on which their employer is required to pay the SG contribution. The employer is not required to pay super on any earnings over this amount in the financial year.

The general superannuation concessional contribution cap for FY27 is $32,500. This is the maximum amount of super you can contribute (from employer contributions, salary sacrifice contributions and personal contributions for tax deductions) to your fund without incurring extra tax at the marginal rate.

 

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4. Expansion of parental leave obligations

The government-funded paid parental leave will increase to 26 weeks (130 days) for any babies born or adopted on or after 1 July 2026. This is final stage of the government’s reform to the paid parental leave scheme and provides an increase of 2 weeks on last year’s provision.

Of the 26 weeks, each parent has at least 4 weeks reserved for them, which will be forfeited if unused.

As part of the reform, the government will also directly pay a 12% super contribution on any government-funded parental leave payment to eligible parents.

 

What you need to do:

 

5. High income threshold to be updated

From 1 July 2026, the high income threshold is an annual base salary of $190,100.

The high income threshold indicates the maximum earnings that an individual can earn to be eligible for unfair dismissal protections from the FWC. Any employee earning at or above the threshold cannot file unfair dismissal claims, but can still apply for general protections claims (exceptions to the access to unfair dismissal claims may be applicable for some Award or enterprise agreement covered employees).

Maximum compensation for an unfair dismissal claim is 6 months’ salary – which, for someone earning the maximum amount before reaching the threshold, is $95,000.

 

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6. Redundancy tax-free threshold and ETP caps

The tax-free threshold for redundancy payments in FY27 is $13,598, plus $6,801 for every full year of service.

The cap for employment termination payments (ETP) taxed at the concessional rate is increasing to $270,000. Any amount in excess of this cap is taxed at the top marginal rate.

 

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7. Laws restricting NDAs in sexual harassment cases (VIC)

Effective 1 July 2026, the Victorian government has introduced a law that restricts the use of NDAs when dealing with workplace sexual harassment disputes to protect Victorian workers who have experienced workplace sexual harassment. This law prevents employers from covering up cases or silencing victims, and from influencing a worker to sign a NDA.

 

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8. The right to work from home (VIC)

On 16 June 2026, the Victorian government presented a new legislation to the Victorian Parliament that provides for the right to work from home under the state’s anti-discrimination laws, within the Equal Opportunity Act 2010 (VIC).

If passed, the new law will provide eligible employees in Victoria with the right to work from home for up to 2 days per week, and be effective as of 1 September 2026 in all public and private businesses in Victoria. However, for small businesses (fewer than 15 employees), this law will come into effect on 1 July 2027 to allow time for any necessary adjustments in their business operations.

This legislation will be applicable for employees who can reasonably perform their roles remotely, including part-time and regular casual employees, but excludes roles that require a physical presence to fulfil their primary function.

This legislation is significant, as this is the first time that working from home would become a statutory right in any Australian state. Moreover, the fact that this law sits within state anti-discrimination legislation, and not under the Fair Work Act, positions the provision as an issue of equal opportunity, with more scrutiny likely to be applied to disputes and enforcement. Any disputes will handled by the Victorian Equal Opportunity and Human Rights Commission (VEOHRC) and the Victorian Civil and Administrative Tribunal (VCAT).

Details are still yet to be finalised through Parliament and further updates will be released prior to commencement.

 

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Are you FY27 ready?

As FY27 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.