Construction award pay rates moved again from 1 July, the same way they do every year when the Fair Work Commission hands down its annual wage review. If you employ anyone under the Building and Construction General On-site Award (MA000020), the minimums you were paying in June are not the minimums you owe now. And every live job you quoted on last year's labour rates is quietly thinner than you think.
Pay rates keep making construction news for a simple reason: this is where builders get caught. Not because anyone set out to underpay, but because the numbers move every winter and nobody sends you a personalised memo. Here is the builder-eye view of what actually changes, and what to do about it in your quoting and admin.
Why construction award pay rates change every July
The Fair Work Commission reviews minimum wages every year, and the new rates take effect from the first full pay period on or after 1 July. That covers the base rates in the on-site award, and it flows through to everything calculated off those rates: overtime, penalties, casual loading and apprentice percentages.
Two things worth locking in:
- Do not run your payroll off a rate you memorised last year, a mate's number or an old pay guide PDF saved to your desktop. The exact current figures for your employee's classification live in the Fair Work pay tools, which are updated when the rates change.
- Super is now 12 per cent. The superannuation guarantee finished its long climb at 12 per cent from 1 July 2025, so if your labour cost build-up still says 11 or 11.5, it is wrong.
The award rate is not what the hour costs you
This is the mistake that hurts at quoting time. The hourly rate in the pay guide is what hits the worker's payslip before tax. What that hour costs your business is a different, bigger number. A proper labour rate build-up stacks up:
- Base award rate for the correct classification (the on-site award uses CW/ECW levels, and a qualified tradesperson sits well above the entry level)
- Allowances, which in construction are not optional extras. The industry allowance, tool allowance for tradespeople and daily fares and travel allowance all apply on top of the base rate for most on-site workers
- Casual loading of 25 per cent if they are casual
- Super at 12 per cent, workers comp premiums, portable long service levies (CoINVEST in Victoria, QLeave in Queensland, the Long Service Corporation in NSW) and payroll tax once you are over your state's threshold
- Unproductive time: annual leave, public holidays, rain days, RDOs and the hours lost to travel and supplier runs
Stack all of that and the true cost of a tradesperson's hour typically lands 30 to 50 per cent above the payslip rate, before you have added a cent of overhead or margin. Your charge-out rate then goes on top of cost, and GST goes on top of that. If your quotes show one labour number and you cannot say which of those layers it includes, that is the first thing to fix.
This is also the strongest argument for keeping labour rates in one place instead of scattered across old spreadsheets. Decent construction estimating software lets you update the rate once and have every new quote pick it up, instead of finding out in October that you have been quoting July's jobs on February's rates.
Where builders get caught
From talking to builders, the same few traps come up every year:
- Wrong classification. Paying a CW3 as a CW2 because that is what the last bloke was on. Check the level against the actual duties.
- Forgotten allowances. The base rate was right, the fares and tool allowances never made it into payroll.
- Flat rates that do not stack up. Paying an above-award flat hourly rate is legal only if the worker ends up better off than the award across their real roster, overtime and allowances included. "It is above award" is not a defence if the overtime weeks say otherwise.
- Apprentice percentages. Apprentice rates step up by year and by whether they are adult apprentices. Set a reminder for each anniversary.
- ABN arrangements that are really employment. If someone works your hours, on your jobs, under your direction, an ABN invoice does not make them a contractor.
What to do this week
Pull a one-hour admin block. Check every employee's classification and current rate against the Fair Work pay guide, update the labour rates in your estimating templates, then recost any live or pending quotes that still carry old rates. Put a recurring task in your project management software for the last week of June every year, because this exact job comes around again in ten months.
None of this is glamorous. It is the difference between a margin you planned and a margin you discover.
If you want your labour rates, quotes and job admin living in one place instead of six spreadsheets, the Built Simple app is free to download, calculators and all. Have a play and see how it fits your workflow.
