Australia’s cleaning industry is bracing for a material uplift in labour costs following the Fair Work Commission’s 2026 Annual Wage Review decision, which confirmed a 4.75 per cent increase to minimum award wages effective from the first full pay period on or after 1 July 2026.
The National Minimum Wage will increase to $1,004.90 per week, or $26.44 per hour, the first time the rate has crossed the $1,000-per-week threshold. All Cleaning Services Award rates increase by 4.75 per cent from 1 July 2026.
What the increase means for operators
For contract cleaning businesses that employ large numbers of award-covered workers across commercial, industrial and government sites, the compounding effect of successive annual increases is becoming a defining operational challenge. This year’s 4.75 per cent award rise is larger than the 3.50 per cent increase in 2025 and the 3.75 per cent increase in 2024, though smaller than the 5.75 per cent rise recorded in 2023.
Adding further pressure, the superannuation guarantee rate is set to increase to 12 per cent from July 2026 under the Treasury Laws Amendment, meaning the cumulative on-cost impact extends well beyond the headline wage figure. For employers calculating true staff costs, inclusive of superannuation, workers’ compensation and applicable payroll tax, the per-hour cost of labour rises substantially above the award rate itself.
Getting compliance right
The new rates apply from the first full pay period on or after 1 July 2026, meaning that if a weekly pay period starts on Wednesday, the new rates apply from Wednesday 1 July 2026. Operators are urged to audit current payroll systems and confirm classifications under the Cleaning Services Award 2020 before the deadline.
Entry-level rates applying during an employee’s first six months must reach at least $978.10 per week, or $25.74 per hour, providing a separate compliance threshold for businesses that regularly onboard new staff.
HR On Call director Melissa Behrend says the most common compliance failure at wage review time is that payroll simply does not get updated. “In some instances, employers may pay above the award rate and then forget that the rate increases each year, and over time this will fall below the award rate,” she says. “To ensure this does not occur, check your rates.”
Behrend also urges operators to look beyond base pay when conducting their annual review. “Employers need to check any allowances that may also be increased at this time,” she says, adding that the annual review presents a valuable opportunity to confirm that all employees are correctly classified under the award.
Wages alone won’t solve retention
Approximately 21 percent of Australia’s workforce, roughly 2.8 million employees, are paid according to minimum award rates, making the cleaning sector, with its heavy reliance on award-based employment, among those most directly affected by the decision. Yet Behrend cautions against viewing wage increases as a silver bullet for the industry’s persistent recruitment and retention challenges.
“Employers need to rely on more than just wages to attract and retain employees in any industry,” she says. “There are areas such as career and personal development, flexibility, team building and other benefits that employees consider important. From an employer perspective, it’s important to understand your team and adjust accordingly.”
Operators seeking further guidance on Cleaning Services Award classifications and allowances are encouraged to consult the Fair Work Ombudsman’s updated pay guides at ahead of the 1 July deadline.
