by Optimum
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The new financial year is no longer coming. It is here. Four things changed on 1 July. If you haven’t acted on all of them, this month is when it shows. This is what is live now, what compliance looks like in practice, and what the opening weeks of FY27 typically do to your workforce.
01 The Annual Wage Review Decision, What It Actually Means
The Fair Work Commission handed down the AWR 2026 decision on 2 June 2026. The headline numbers:
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Modern Award minimum rates: increased by 4.75% across the board
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Lowest-paid award workers (C13 classification): an additional ~1.2% structural uplift on top of the 4.75%
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Effective date: the first full pay period on or after 1 July 2026, not necessarily 1 July itself
Approximately 2.8 million Australians, around 21% of the workforce, are directly covered by modern award rates. If you employ anyone in retail, hospitality, healthcare, or aged care, you are almost certainly directly affected. The sectors most exposed are accommodation and food services, retail, and healthcare and social assistance.
For above-award employees, the AWR decision does not automatically require an increase but it raises the floor. In tight-skill segments, offers that were competitive last month may not be today. Businesses hiring in July should update their salary guidance before briefing a recruiter, not after.
02 Payday Super Is Now Operational, Not a Pilot, Not a Trial
From 1 July 2026, the quarterly superannuation payment cycle is gone. Super Guarantee contributions must now reach employees’ nominated super fund accounts within seven business days of every payday. The obligation applies from the first pay run of FY27, there is no grace period.
The practical shift is significant. Under the old quarterly model, businesses managed super as a lump sum cashflow event four times a year. Under Payday Super, it becomes a recurring obligation at every payroll cycle. For a business running fortnightly payroll, that is 26 separate compliance events per year where timing and accuracy must be right.
The penalty structure has no tolerance for slow starts. The Super Guarantee Charge applies when contributions fail to reach the fund within the seven-day window, with penalties of 25–50% of the unpaid amount depending on prior history. Add nominal interest and an administration component, and note that SGC charges are non-deductible, the real cost of one missed pay cycle can be two to three times the original contribution.
03 26-Week Parental Leave Is Now the Standard
The Government’s Paid Parental Leave scheme expanded to 26 weeks on 1 July 2026. Both parents can access the leave, with a reserved portion for each to encourage shared uptake. Payments remain at the national minimum wage, now $26.44 per hour under the new AWR.
For most employers, the immediate operational question is backfill. A shorter absence can often be managed with ad hoc cover. Six months rarely can, particularly in a specialist, client-facing, or leadership role where knowledge transfer is complex and ramp-up is slow. A gap in cover at that level doesn’t just create inconvenience; it creates risk.
04 The July Resignation Wave, Why Your Risk Is Highest Right Now
July is consistently one of Australia’s highest-turnover months, a pattern confirmed by WorkplaceInfo and supported by ABS labour mobility data. The mechanism is straightforward: performance reviews conclude in June, bonuses are paid, and employees who have been weighing a move now act. For long-serving employees, the financial incentives are real, large leave accruals paid out in a lower-income year attract less tax, making post-EOFY the most sensible time to leave.
The result is that the employees most likely to resign in July are not the disengaged underperformers. They are the high performers who have waited for the right moment. They have received their bonus, had their performance review, and made a decision. By the time the resignation lands on your desk, it is typically already final.
The best time to reduce July resignation risk is before June ends, a conversation that signals recognition, growth, and future opportunity.
By July, most decisions are made. But for employees still on the fence, the first weeks of the new financial year are the last point at which a meaningful intervention is realistic.
What does that look like? Not a counter-offer. It is a conversation that tells them specifically what FY27 holds for them: a new scope, a development plan, a title change, something concrete that demonstrates leadership is paying attention.
For employers hiring in July, the resignation wave creates a secondary effect: candidate volume increases as people who resigned in June enter the market. But competition for those candidates is also at its peak, every organisation with newly activated headcount is competing for the same pool. A role that takes four weeks to fill in February can take eight in July. Speed and decisiveness in the hiring process matters more right now than at any other point in the year.
Putting It Together, What FY27 Week One Looks Like in Practice
The opening weeks of the new financial year are the most compliance-dense of the year, and also the most talent-critical. The organisations navigating it well are running on three tracks simultaneously:
| Compliance | People | Talent |
|---|---|---|
|
Apply AWR rates in your first pay run Confirm Payday Super is processing per payday, not quarterly Update parental leave policy to 26 weeks Check enterprise agreement floors against the new award minimum |
Have specific retention conversations with high performers now Build structured backfill plans for parental leave, not ad hoc cover Set clear FY27 goals and role scope for every direct report Brief managers on right-to-disconnect obligations |
Brief your recruiter on approved roles before candidates are gone Update salary offers, AWR has moved the floor Move fast, a four-week fill in February becomes eight in July Consider contract for roles that need rapid cover |
Need help navigating the FY27 changes?
Optimum Consulting works with employers every July, applying AWR changes correctly, structuring parental leave cover, and moving fast on new-year hiring before the best candidates are gone.
The actions in this piece are most effective in the first two weeks of July. Get in touch for a no-obligation conversation.
ogroup.com.au | 1300 288 400
Sources
This insight draws on publicly available information current as at June 2026.
- 1Fair Work Commission Annual Wage Review 2026 Decision — fwc.gov.au
- 2Fair Work Ombudsman — Payday Super new rules starting 1 July 2026 — fairwork.gov.au
- 3Australian Taxation Office — About Payday Super — ato.gov.au
- 4Department of Employment and Workplace Relations — AWR 2026 media statement
- 5HRD Australia / HCA Mag — AWR 2026 employer impact analysis
- 6WorkplaceInfo — Why do so many employees quit in July?
- 7ABS Labour Mobility Data — abs.gov.au
- 8Foremind / ScaleSuite — Employee Turnover Statistics Australia 2026
Sarah Linder, Operations Manager
Ben Walsh, National General Manager – Recruitment
This insight is prepared for general information purposes. It does not constitute legal or financial advice. Contact Optimum Consulting for advice specific to your workplace.
