Wages have lifted for the fourth quarter in a row, growing 3.1 per cent annually in the September quarter.
But the increase is still being far outstripped by inflation as Australians' real wage growth sits deep in negative territory.
The national statistics bureau's wage price index lifted one per cent over the three months.
"This is the highest quarterly growth in hourly wages recorded since March quarter 2012," Australian Bureau of Statistics program manager of prices Michelle Marquardt said.
She said rising pays were largely driven by the private sector, where wages were growing at twice the rate of those in the public sector.
Competition for workers has been putting upwards pressure on wages in the private sector, Ms Marquardt said, as well as the largest Fair Work Commission award increase in more than a decade.
The data showed pay bumps growing in size as well as a larger proportion of private employers handing out pay rises.
In the June quarter, wages grew 0.7 per cent in three months and 2.6 per cent over the year.
This followed a 0.7 per cent lift in the March quarter and 0.7 per cent growth in the final quarter of 2021.
But the rising cost of living continues to outstrip wages growth as headline inflation hit 7.3 per cent in the September quarter.
EY senior economist Paula Gadsby said the September quarter WPI result was a double-edged sword.
"Real wages continue to fall which will further weaken consumer confidence, already at recessionary lows due to the rising cost of living and rising mortgage rates," Ms Gadsby said.
"On the upside, it will not add much to price pressure, further assisting the Reserve Bank in their efforts to cool the economy and tame inflation."
She said fierce competition for labour - with the jobless rate close to 50-year lows - was only gradually feeding into wages growth.
"This indicates that despite high inflation, long-term inflation expectations have remained anchored," she said.
"It will be a central goal for the Reserve Bank to ensure that this continues to be the case."
Australian Council of Trade Unions assistant secretary Liam O'Brien said the WPI figures represented the biggest fall in real wages on record and that the industrial relations system was failing workers.
He said the Labor government's workplace reforms, which includes expanded multi-employer bargaining rights, would help get wages moving.
"To get pay rises across the economy we need to make bargaining more accessible, in more workplaces," he said.
Economists expected to see wages keep ticking up in the September quarter.
CommSec tipped a 0.9 per cent lift over the three months, while St George economists anticipated a 1.1 per cent lift in quarterly growth.
St George chief economist Besa Deda said the index was likely undershooting wage pressures in the economy because it does not capture one-off retention and sign-on bonuses.
