The Fair Work Commission handed down its 2026 Annual Wage Review decision on 2 June. A 4.75% increase to all modern award minimum rates, effective from the first full pay period on or after 1 July 2026.
For hospitality operators, that means every base rate, penalty rate, casual loading and overtime figure in the Hospitality Award and Restaurant Industry Award shifts simultaneously. On top of last year's 3.5% and 2024's 3.75%, labour costs have risen more than 12% in three years.
The venues that come out ahead aren't the ones that cut hours or reduce covers. They're the ones who use this moment to run smarter — getting more from the same team rather than asking the same team to do less.
4.75%
Award wage increase from 1 July 2026 — higher than 2025's 3.5%
$26.44
New minimum floor rate per hour for the lowest ongoing award classification
12%+
Total award wage increase over the last three years
What's Actually Changing on 1 July
The 4.75% increase applies to all modern awards — including the Hospitality Industry (General) Award (MA000009) and the Restaurant Industry Award (MA000119). Every classification level shifts: Level 1 juniors, Level 3 cooks, senior supervisors, casual loadings, and all penalty rates.
The increase applies from the first full pay period starting on or after 1 July 2026. If your weekly pay period runs Monday to Sunday, the new rates apply from Monday 6 July. If it starts Wednesday, the new rates apply from Wednesday 1 July.
Your payroll software needs to be updated before that first pay period closes. If you're on Xero, MYOB or Deputy, check for an update and apply it before the first week of July.
What It Actually Costs Your Venue
The real number isn't the percentage — it's what it adds up to across your roster. A venue running 10 casual staff at an average of 20 hours per week at the Level 2 Hospitality Award rate will see their weekly labour bill increase by roughly $120–$160 per week, or around $6,500–$8,000 per year — before penalty rates and superannuation are factored in.
For a venue already running on 5–8% net margins, that's a material number. It needs to come from somewhere — and the most sustainable place is throughput, not headcount.
"The venues that absorb wage increases best aren't the ones with fewer staff. They're the ones who handle more covers with the same team — through smarter systems and better flow."
— Ai-Menu, June 2026
Why Cutting Hours Isn't the Answer
The instinct when labour costs rise is to pull back rosters. But hospitality businesses live and die by service quality and throughput. Cutting floor coverage during peak service means slower ordering, longer waits, tables lost and customers who don't come back. The revenue hit from that is almost always worse than the wage saving.
The better question isn't "how do I pay less for the same output?" It's "how do I get more output from what I'm already paying?"
How to Get More From the Same Team
The following levers all work independently — but the cumulative effect of running them together is where venues see real movement on margin.
1
Let customers order themselves at peakAi-Kiosk handles the entire counter transaction — browse, order, pay, receipt — so your team focuses on production and service rather than order-taking during the busiest windows. The same crew handles more covers without anyone being stretched thin.
2
Free your floor staff from order-takingWith Ai-QR at the table, customers order and pay from their phone. Your floor team's time goes back to delivering food, reading the room, and building the experience that keeps people coming back — what they're best at.
3
Roster smarter with real sales dataAi-Manager gives you real-time and historical sales data so you can roster against what's actually happening — not just habit. See your busiest sessions by day and hour, and put your labour where it earns its keep.
4
Speed up the kitchen with a display screenAi-BumpX replaces paper dockets with a live kitchen display. Orders appear the moment they're placed, wait times are tracked, and your kitchen team works through the board faster — fewer mistakes, faster table turns.
5
Spot low-margin items before they drag the numbersAi-Chat analyses your live POS data and flags which items cost more to produce than they return. With labour costs rising, every low-margin seller on your menu is now a bigger problem than it was last year.
"A kiosk doesn't replace your team. It removes the bottleneck that was limiting what your team could do."
— Ai-Menu, June 2026
What to Do Before 1 July
✓
Update your payroll software.The new rates apply from the first full pay period on or after 1 July. Confirm your payroll provider (Xero, MYOB, Deputy, Tanda) has the updated award rates loaded before you process the first July pay run.
✓
Check your enterprise agreements.If you operate under an EBA, the base pay rate must still be at or above the relevant award rate. Now is the time to confirm compliance, not after a Fair Work audit.
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Run a labour cost analysis against your current revenue.Use your Ai-Manager data or a simple spreadsheet to calculate what 4.75% adds to your weekly wage bill. Know your number before it appears on the payroll.
✓
Review your peak service bottlenecks.Where does service slow down? Counter queues? Order errors? Table turn lag? Each of those is a capacity problem that technology can fix — and fixing it is more valuable now that each staff hour costs more.
✓
Talk to Ai-Menu about capacity tools.Ai-Kiosk, Ai-QR, Ai-BumpX and Ai-Manager all address the labour efficiency problem directly. Our team can show you what each would add to your specific operation.
Get more from every shift.
Higher wages mean every staff hour needs to work harder. Talk to our team about the tools that help your venue handle more covers without adding more people.
Common questions from Australian restaurant and venue operators
The Fair Work Commission increased all modern award minimum wages by 4.75% from 1 July 2026. This is higher than the 3.5% increase in 2025 and 3.75% in 2024. The lowest rate for ongoing employment is now at least $26.44/hr ($1,004.90/week).
From the first full pay period starting on or after 1 July 2026. If your pay period starts on Monday, the new rates apply from Monday 6 July. If it starts mid-week, check when the first full period after 1 July begins.
Yes. The 4.75% increase applies to all modern award base rates, which flow through to casual loadings, penalty rates, overtime and allowances. Both full-time, part-time and casual employees covered by the Hospitality or Restaurant Award are affected.
Enterprise agreements must still meet or exceed the base award rates. If your EBA rates are close to the award floor, the July increase may push the award above your EBA rates — triggering an automatic obligation to pay the higher amount. Confirm with your payroll provider or legal advisor before 1 July.
The most effective tools reduce the number of staff-hours needed per cover — not the number of staff. Ai-Kiosk handles ordering and payment at the counter autonomously, Ai-QR lets tables order from their phones, Ai-BumpX speeds up kitchen throughput, and Ai-Manager helps you roster against real sales data. Together, they let the same team handle more service without being stretched thin.
