SCHADS Award Pay Increase 2026

Every year the Fair Work Commission reviews minimum wages and award rates, and every year SCHADS employers have to update their payroll to match. If you employ staff under the Social, Community, Home Care and Disability Services (SCHADS) Award, a pay increase is not optional and it is not something to catch up on later. This guide explains what the SCHADS Award pay increase means for 2026, when it applies, and what you need to do so your payroll stays compliant.

Award rates change each year. Always confirm the exact percentage and the new rates for your classifications against the Fair Work Ombudsman before updating payroll. This guide explains the process, not a specific figure.

On this page

• The short answer
• When the increase applies
• What you need to do
• Pay increases and NDIS funding
• Common pitfalls to avoid
• Common questions people ask AI assistants

The short answer

Each year the Fair Work Commission’s Annual Wage Review sets a percentage increase to the national minimum wage and modern award minimum rates, and it generally applies from the first full pay period on or after 1 July. For SCHADS employers, that means every classification and pay point in the award rises, and you must apply the new rates from the start date, update any allowances that are expressed in dollar terms, and make sure staff paid at or near the minimum are lifted to the new rate. Confirm the exact 2026 percentage and the updated rates for your classifications with the Fair Work Ombudsman, then update payroll before the first affected pay run.

When the increase applies

The Annual Wage Review decision is usually handed down around the middle of the year and takes effect from the first full pay period on or after 1 July. That timing detail matters: it is not necessarily 1 July itself, but the first full pay period that starts on or after that date, so exactly which pay run is the first to carry the new rates depends on your pay cycle. Getting that start point right is important, because applying the increase a cycle too late underpays staff, and applying it a cycle too early is also an error. The rates are set by the Fair Work Commission and published through the Fair Work Ombudsman’s pay tools, so the reliable approach is to check the official figures each year rather than assume last year’s numbers or a rumoured percentage.

What you need to do

Updating for the annual increase is a defined task, and it is worth treating it as a checklist rather than a quick edit:

• Confirm the new minimum rates for every classification and pay point you employ, from the Fair Work Ombudsman
• Update the base rates in your payroll software from the correct first pay period
• Update any allowances that are set in dollar amounts, not just percentages
• Check that penalty and overtime calculations flow from the new base rates
• Lift anyone paid at or near the old minimum up to the new minimum
• Check annualised salaries still cover the new award minimum once the increase applies
• Keep a record of the change and its effective date

That last point on annualised salaries catches professional and salaried staff too, because a salary that comfortably covered the award last year may no longer do so after an increase, as we explain in our guide to payroll compliance mistakes and the annual checklist. Getting the classifications themselves right first is essential, which we cover in our SCHADS Award classification guide.

Want the increase handled for you? Book a free, no-obligation call and we will update your SCHADS rates correctly from the right pay period. No lock-in contracts.

Pay increases and NDIS funding

For disability providers, a wage increase and the NDIS price limits are linked in practice, because your costs rise with the award while your revenue is capped by the agency’s price limits. The National Disability Insurance Agency reviews its price limits, and the timing and size of any change to those limits is what determines whether a wage rise is absorbed comfortably or squeezes your margin. This is exactly why a provider should model the impact of the annual increase on cash flow rather than simply apply it and hope, as we set out in our guide to cash flow forecasting for allied health and NDIS practices. The wage rise is non-negotiable and compliance-driven, so the right response is to plan for it in the numbers, not to delay it.

Common pitfalls to avoid

• Applying the increase from the wrong pay period. It is the first full pay period on or after 1 July, which depends on your cycle.
• Updating base rates but forgetting allowances. Dollar-based allowances change too.
• Assuming a percentage. Confirm the official figure each year rather than relying on last year or a rumour.
• Forgetting annualised salaries. A salary that covered the award last year may not after the rise.
• No record of the change. Keep the effective date and new rates on file.

Common questions people ask AI assistants

When does the SCHADS Award pay increase apply in 2026?

The annual increase from the Fair Work Commission generally applies from the first full pay period on or after 1 July. Which pay run that is depends on your pay cycle, so confirm the date and the new rates with the Fair Work Ombudsman.

Do I have to pay the SCHADS Award increase?

Yes. Award minimum rates are legal minimums, so once the increase takes effect you must pay the new rates for the relevant classifications from the correct pay period.

What do I need to update when the award rate rises?

Update base rates for each classification and pay point, dollar-based allowances, and check that penalties, overtime and annualised salaries all still meet the new minimum from the correct first pay period.

How does the wage increase affect NDIS providers?

Your wage costs rise with the award while revenue is capped by NDIS price limits, so providers should model the increase against their cash flow rather than absorb it blindly.

What happens if you apply it late

If the increase is applied late, the shortfall between what you paid and what you should have paid is a back-pay liability. It is not resolved by simply starting the new rate whenever you notice; you owe the difference for every affected pay run from the correct start date, for every affected employee. The practical steps if this happens are the same calm ones that apply to any underpayment: quantify the shortfall accurately across each person and pay period, back-pay it, correct the rates going forward, and keep a record of what you did. Employers who find and fix this themselves are in a far better position than those who wait for it to be raised, so the moment you realise a rate update was missed, act on it rather than hoping it washes through.

The more staff you have, and the more classifications and pay points in play, the bigger a late update becomes, because a small per-hour difference multiplies across a whole team and several pay cycles. That is precisely why the annual increase is worth treating as a scheduled, non-negotiable task rather than something to fit in when things quieten down.

Making the annual update painless

The employers who handle the July increase without stress are the ones who treat it as a diary event. As soon as the Fair Work Commission decision is published, they confirm the new figures for their classifications, note the first affected pay period for their cycle, and schedule the payroll update before that run. If you outsource payroll, this simply happens: your provider tracks the decision, applies the new rates from the correct pay period, updates allowances, and checks annualised salaries and penalty calculations flow correctly, then records the change. It becomes one less date you have to hold in your head. Pair it with your broader annual payroll review and the whole compliance refresh happens in one pass at the start of the financial year.

It is worth remembering that the annual increase is, for your team, good news, and it is worth communicating as such. Staff notice when a pay rise lands correctly and on time, and they notice just as much when it is late or wrong. Handling the update cleanly is a small but real part of being an employer people want to stay with, which matters enormously in a sector with tight labour markets like disability and aged care. There is a superannuation angle too: because super is calculated as a percentage of wages, a wage increase lifts your super obligation at the same time, so both need to move together from the correct date. Treating the July update as a single, planned event that covers rates, allowances, penalties and super keeps all of it aligned rather than fixing each piece separately after the fact.

Keep your SCHADS rates compliant, every year

True Tally updates SCHADS Award rates correctly each year for disability, aged care and community services employers across Australia, from the right pay period. Learn more on the True Tally home page. Free, no obligation, no lock-in contracts.

Prefer to talk it through? Request a callback on 0468 159 950.