5 industrial relations changes taking effect on 1 July

By Phoebe Armstrong

on June 29, 2026

Featured, Legal, Organisational enablement

The new financial year will bring changes to pay, superannuation, parental leave, psychosocial risk management and more. Here’s what these changes will mean in practice for HR.

The start of a new financial year rarely arrives quietly for HR. On top of internal budgets and planning, 1 July also marks the point when a raft of legislative reforms take effect, prompting employers to reassess how they pay, manage and support their people.

This year is no exception. From a new approach to superannuation payments to expanded parental leave entitlements and changes to workplace safety obligations, upcoming changes will require employers to ensure their policies and processes are ready from day one.

While some reforms will require immediate administrative action, others have much broader strategic implications.

Here’s a rundown of five key industrial relations and workplace changes taking effect from 1 July, along with what they mean for HR in practice.

1. Payday super

Australia’s Payday Super legislation comes into force on 1 July, imposing a new obligation on businesses to pay superannuation at the same time as wages or salaries.

This approach replaces the current quarterly model for a pay-cycle-aligned approach, whether that’s weekly, fortnightly or monthly.

Some exceptions will apply, including payments to new employees (with a tenure of less than two weeks) and small and irregular payments that occur outside an employee’s usual pay cycle, such as one-off bonuses or expense reimbursements.

If an employer misses the new seven-day deadline for super payments, the superannuation guarantee charge (the penalty for failing to pay super contributions correctly) will become payable immediately from the next calendar day, with daily compounding interest on the shortfall.

What does this mean for HR?

Staying compliant with the new laws will require ongoing collaboration between business functions, says Tracy Angwin, Director of the Australian Payroll Association.

“HR can ensure accountability between payroll, finance and people teams by leading change management initiatives, facilitating clear cross-team communication and verifying that payroll has the necessary tools, support and comprehensive training for payday super compliance,” she says.

The changes could lead to an increase in employee queries about super contributions, she adds.

“HR should prepare by communicating changes clearly, updating payslip format as necessary and providing resources like FAQs and super fund verification guidance.”

She suggests some additional steps employers can take to ensure Payday Super processes are implemented smoothly:

Reviewing superannuation processes, especially any bounce backs due to incorrect fund details
Ensuring payroll codes for Single Touch Payroll are audited for accuracy
Confirming software and clearing house readiness
Planning cash flow with finance teams
Ensuring contractor payments align with the payroll process.

“HR should prepare by communicating changes clearly, updating payslip format as necessary and providing resources like FAQs and super fund verification guidance.” – Tracy Angwin, Director, Australian Payroll Association

2. Minimum wage increase

The Fair Work Commission recently announced it would increase Australia’s minimum wage by six per cent, and minimum award wages by 4.75 per cent.

This increase outpaces inflation over the 2025-26 financial year, which has attracted criticism from industry groups including the Australian Chamber of Commerce and Industry (ACCI).

In its response to the news, the ACCI argued that the increase would add to cost pressures across the economy at a time when many businesses, particularly small businesses, have very limited capacity to absorb additional costs.

Some commentators have also suggested the change could add to inflationary pressures and trigger interest-rate hikes. You can read more about the long-term considerations of the minimum wage increase here.

What does this mean for HR?

This change will flow on to next year’s payroll costs, tax withholding and reporting cycles, so HR should ensure it is reflected in reporting from 1 July this year.

Some employers are also currently facing a tough choice between absorbing the cost of higher wages or reducing headcount.

According to Lisa Mannering FCPHR, employment lawyer and HR consultant at Langtree Legal and a member of AHRI’s ER/IR advisory panel, HR is well-placed to help leaders find strategic ways to absorb costs without losing talent.

“The simplest savings an employer can make are by reviewing and decreasing overtime, and decreasing expenses,” she says. “Dialling back discretionary benefits may be an option, too. Employers may find that these measures alone re-balance the books.”

The impending changes might also serve as a jumping-off point for a conversation between HR and leaders about productivity, she adds.

“Getting more efficiency out of the assets and people that you have, or implementing tech solutions to reduce hours worked, could future-proof your organisation and actually be simpler than shedding staff entirely.”

3. Changes to paid parental leave

Paid parental leave (PPL) has been subject to significant reforms over the past two years, and is set to expand further in the coming financial year.

Starting from 1 July, eligible parents will be able to access up to 26 weeks of government-funded PPL (six months based on a standard five-day week) – an increase from 24 weeks in 2025 and 22 weeks in 2024.

The amount of leave reserved for each parent in a couple will also increase from three weeks to four weeks on a use-it-or-lose-it basis from July this year. Single parents will receive the full 26 weeks.

“The old PPL scheme offered minimal leave for fathers and partners,” says Fay Calderone, Partner at Hall and Wilcox. “The assumption that mothers were ‘primary carers’ limited shared caregiving and kept women outside of the workforce for longer, contributing towards a gender pay gap.

“The reforms have expanded flexibility to support new parents’ transition back to the workforce and improve participation. This includes increasing the maximum period of PPL… which can be used flexibly and can be shared over two years.”

What does this mean for HR?

With the expanded leave entitlements in place, Calderone recommends taking the following steps to ensure businesses remain compliant:

Reviewing and updating parental leave policies to reflect the legislative changes
Ensuring payroll systems are updated to process 26 weeks of paid parental leave, including superannuation contributions
Planning for longer periods of absence, which may involve employing temporary hires.
Following reforms introduced last year, employees also receive superannuation on paid parental leave (paid directly to their super funds by the ATO), which should also be factored into payroll planning.

“The old PPL scheme offered minimal leave for fathers and partners. The assumption that mothers were ‘primary carers’ limited shared caregiving and kept women outside of the workforce for longer, contributing towards a gender pay gap. – Fay Calderone, Partner, Hall and Wilcox

4. Tax cuts to help with the cost of living

Several tax cuts will kick in on 1 July, including the new Working Australians Tax Offset (WATO).

The WATO provides an additional tax cut of up to $250 for working Australians on top of the tax cuts announced in the 2025-26 Budget. This measure is intended to support the workforce with the rising cost of living, and is set to benefit over 13 million Australian workers.

However, some groups, including The Centre for Independent Studies and The Australian Greens, have criticised the WATO as insufficient to help workers manage financial pressures, pointing out that the measure will provide a tax cut equivalent to less than $5 per week.

Other tax changes due to take effect on 1 July include:

The 16 per cent tax rate on taxable income between $18,201 and $45,000 will drop to 15 per cent. From 1 July 2027, the tax rate will drop to 14 per cent.
A $1000 instant tax deduction will be introduced to deliver lower and simpler taxes for workers from 2026-27. 6.2 million workers, or 42 per cent of taxpayers, will benefit from an average tax saving of $205 for 2026-27.

What does this mean for HR?

HR should be aware that the financial relief offered by these tax cuts might not be as immediate or substantial as some employees hoped.

As the cost-of-living crisis continues to cause widespread financial stress, providing relevant, timely support for employees will help employers both culturally and competitively.

Learn more about choosing and implementing the right financial wellbeing support for your people here.

5. Work health and safety codes become enforceable (NSW)

From 1 July, an update to the Work Health and Safety Act 2011 (NSW) will give approved NSW WHS codes of practice greater legal weight. This includes the code of practice for managing psychosocial hazards at work.

Until now, the codes have served as guidance for managing a hazard. They could be referenced in legal claims or safety inspections, but employers could not be prosecuted or fined for breaching them.

From 1 July, persons conducting a business or undertaking (PCBUs) in NSW will either need to follow an applicable approved code of practice or be able to demonstrate that any alternative approach delivers an equivalent or higher standard of health and safety.

Inspectors will be able to issue improvement or prohibition notices if safety systems fall short of an approved code, even if no workplace incident or injury has occurred.

What does this mean for HR?

To ensure compliance with the newly enforceable codes of practice, NSW employers should audit their existing WHS policies and work systems against the approved codes to identify any remaining compliance gaps.

If your business uses an alternative approach to the one outlined in the code, it’s crucial to ensure there is documented evidence that the alternative method is equally safe or safer.

HR plays a critical role in ensuring leaders and managers are prepared for increased scrutiny around psychosocial safety. In a recent report from Citation Group, just one in four businesses strongly agreed they could confidently manage psychosocial risk.

For guidance on psychosocial risk management and manager training, check out the articles below:

AHRI will run an article further explaining how NSW employer obligations around psychosocial safety will evolve as a result of this legislation later this week.

These changes are the latest instalment in a slew of industrial relations reforms over the past few years.

To stay across Australia’s shifting employment law landscape, check out AHRI’s new ER/IR Unpacked podcast, where experts cut through complex legislation and workplace issues to focus on what they mean for HR in practice.

🧰 HR’s career resource toolkit

Learning: Gain the knowledge and skills needed to navigate the complex landscape of psychosocial wellbeing in the workplace with AHRI’s Psychosocial Code of Practice course.
Learning: Take your employment law expertise to the next level with AHRI’s Advanced HR Law course, or ensure you’ve got your bases covered with this introduction course.
Article: What are the long-term considerations of the recent minimum wage and award increases?
Article: 9 common questions about the upcoming Payday superannuation changes
Podcast: Stay across Australia’s evolving employment law landscape with AHRI’s ER/IR Unpacked podcast.

All information, content and materials available on this site are for general informational purposes only. The contents of this article do not constitute legal advice and should not be relied upon as such.

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