Australia's minimum wage will increase by 5.97 per cent, and minimum award workers will get a 4.75 per cent pay boost, in the Fair Work Commission's (FWC) annual wage review.

Unions had been calling for a 6 per cent increase, which employers branded a "ludicrous" ask.

Millions of Australians have been handed a pay rise, and the lowest-paid workers are getting the biggest bump in a move employer groups warn will fuel inflation.