Annual Pay Rate Changes: Why It’s Time to Upgrade Your Review Process

Each July, payroll teams across Australia prepare for a familiar challenge: updating pay rates in line with Fair Work’s Annual Wage Review. The 2025 decision, a 3.5% increase to the National Minimum Wage and all modern award minimum rates, comes into effect from the first full pay period after 1 July.

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While the change itself is straightforward, implementing and then reviewing it has been done correctly across large, complex organisations can require some internal effort. 

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The Reality of Manual Reviewing Pay Rates

65% of payroll teams say reviewing and validating annual pay rate changes is complex and effort-intensive, often becoming a hassle to do in an already extremely busy start to the new financial year. 

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For many, the process still relies heavily on manual checks. Looking something like: 

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• Extracting new award rates and matching them against internal pay structures, 
• Updating each relevant system individually, often including time and attendance, payroll, HRIS, and rostering systems,
• Running parallel calculations or test pay runs to confirm nothing has broken,
• Documenting the process and outcomes to prove the updates were applied correctly.
  
  

This work is often done under tight deadlines, with no single source of truth, and usually falls to a small number of people in the payroll or IT teams who have to complete it within two working days. 

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Why Manual Testing Is Challenging 

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There are a few key reasons this process can be challenging:

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1. Organisations that utilise many different pay systems
   Rate changes need to be updated in several systems, payroll, rostering, T&A, each with different logic. Manual testing across all of them is slow and easy to get wrong.

2. Those who pay under multiple awards and enterprise agreements‍
   Managing multiple awards and EAs means different rules, classifications and pay structures. Small misses, like birthday-based rate changes, can easily slip through.
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3. No clear ownership
   Rate updates often fall between teams. Sometimes it’s payroll’s job, sometimes it’s IT. Without clear ownership, checks can get missed.
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4. Limited testing environments
   Most teams don’t have a safe place to test. That means rate changes are often verified in live systems or done using spreadsheets / or the eyeball test. 
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5. Pressure to get it done fast
   Rate updates hit when teams are juggling EOFY deadlines. With limited time, testing gets rushed, or pushed to the bottom of the list.

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The Risk Might Feel Small, But It Isn’t

We’ve seen organisations miss a 10-cent hourly rate increase, assuming it wouldn’t have much impact. But over thousands of hours and hundreds of employees, that margin can turn into a significant variance. 

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Just last week, one PaidRight user avoided a $4,000 underpayment after our platform detected a missed birthday-based rate increase. The employee’s details were correct in the system, but the rate hadn't been updated. Their payroll system missed it.

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The same goes for the annual rate changes. Minor errors, when updating the rates can lead to significant variances if left unnoticed. 

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Are Your Enterprise Agreements Rates Still Above Award?

Just because employees are paid under an enterprise agreement doesn’t mean you’re in the clear. Every time award rates increase, there’s an obligation to ensure your EA rates still pass the BOOT, that they’re better off overall.

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It’s a process that often requires some internal effort from teams to validate that their EAs do pass the BOOT, and if they don’t how much they need to increase them by to cover the increases. 

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How To Do A Rates Check in 10 Minutes

To reduce this risk and remove the manual effort, we have launched a rate-checking tool designed to automate the testing process. In less than 10 minutes, your team can:

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• Upload pay files and/or employee events data, 
• Run the data against the new award rates that are pre-built in the platform, 
• Add in EA rates (if applicable),
• Validate that all rates are compliant and correctly configured. 

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It works across every system, and provides a clear report for audit and compliance purposes. What used to take a team of three people two days can now be done in minutes.

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A Better Process for July 1, and Beyond

Annual rate updates aren’t going away. But the stress and risk that come with implementing them can.

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If your current process relies on spreadsheets, disconnected systems, and crossed fingers, now is the time to rethink your approach. PaidRight gives teams the speed, accuracy and confidence they need, not just for July 1, but for every pay run.

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Want to learn more?