As workplace cost changes took effect on July 1, business owners are being warned to review whether their business is still financially sustainable before costs begin to erode value.
From the first pay period on or after July 1, 2026, Australia’s National Minimum Wage will increase from $24.95 to $26.44 per hour, while minimum award wages will rise by 4.75 per cent.
At the same time, employers will also need to comply with the introduction of payday super, requiring superannuation to be paid at the same time as wages, alongside several other employment law changes.
For labour intensive businesses, particularly those operating on already thin margins, the combined impact could significantly increase operating costs overnight.
Director of Operations at AnyBusiness AU, Mary Tamvakologos, said many small businesses simply don’t have unlimited capacity to absorb another jump in employment costs.
“Some owners may decide it’s no longer worth continuing, while others will realise they need to sell sooner rather than later before profitability begins to decline,” she said.
“If rising wage costs reduce profits over the coming year, that can directly affect what a business is worth.”
According to Ms Tamvakologos, businesses likely to feel the greatest pressure include cafes, restaurants and takeaway businesses, retail stores, hair and beauty salons, childcare providers, cleaning businesses, disability and aged care providers, trades businesses with multiple employees, manufacturing businesses with large workforces.
Rather than panic, she said business owners should use the next few weeks to understand exactly how the changes affect their business.
She recommends owners review wage budgets and staffing costs, update cash flow forecasts, assess whether prices need adjusting, improve operational efficiency where possible, and speak with an accountant about profitability.
If considering selling within the next few years, seek a professional business valuation before margins are impacted.
