Western Australia’s State Minimum Wage will increase by 4.75% from July 1, 2026, adding further cost pressures for businesses already grappling with inflation and economic uncertainty.
The State decision lifts the minimum wage to $998.30 per week, or $26.27 per hour, with award rates also rising by 4.75%.
The increase affects around 27,000 employers and more than 300,000 employees in the State industrial relations system.
In handing down its decision, the WA Industrial Relations Commission (WAIRC) pointed to a complex economic environment, balancing the need to support living standards with mounting cost pressures on business. Inflation has risen to 3.9% to April 2026 and is expected to remain elevated, while global uncertainty – including the Middle East crisis – continues to drive volatility and higher input costs, particularly fuel.
A higher increase than CCIWA called for
CCIWA had recommended a more modest 3.25% increase, warning that small and family businesses – which make up the majority of employers in the State system – are disproportionately exposed to rising costs.
In its submission, CCIWA highlighted the cumulative impact of inflation, surging fuel and transport costs, higher interest rates and elevated insolvency levels across key sectors such as hospitality, construction and retail. These pressures, combined with weak productivity growth, were central to its call for a cautious approach.
The WAIRC acknowledged these concerns, noting evidence provided by CCIWA on declining business confidence and the real operational challenges facing employers.
What it means for employers
CCIWA Chief Economist Dr Daniel Kiely said the increase would be difficult for many businesses to absorb.
“We know that many people in the community are doing it tough at the moment but it’s important to include small and family businesses in that group,” he said.
“There are better ways to target cost-of-living relief to low-income earners without locking in unsustainable wage increases.
“Increasing wage pressures on businesses will stifle growth, which will have a ripple effect across the whole economy.”
Kiely warned the increase could further fuel inflation, potentially eroding the intended benefit for workers.
“The best way to drive real wage growth is through long-term, sustained productivity growth, rather than baking in pay increases that will further constrain businesses,” he said.
Flow-on impacts
Businesses surveyed by CCIWA consistently highlight wage costs as one of the biggest barriers to growth.
“This decision will no doubt have many small businesses looking for ways they can reduce costs – and unfortunately that could impact workers through reduced shifts,” Kiely said.
“When we survey our members, costs are consistently the biggest barrier they’re facing to growth, and wage costs are number one within that.
“These wage increases will flow through to all businesses, setting a new benchmark for wage growth.”
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