The Turnbull government has urged the Fair Work Commission to take a cautious approach to raising the minimum wage, warning an "excessive" pay rise could imperil job creation in a changing economy.

In its submission to the commission's annual wage review process, the government said increasing the minimum wage was "not an efficient way to address relative living standards or the needs of the low-paid".

Around 196,300 - or 1.9 per cent of employees as of May 2016 - are paid the national minimum wage rate of $17.70 per hour.

In a contribution that will incense low-paid workers still angry over the commission's cut to some Sunday penalty rates - a decision Prime Minister Malcolm Turnbull has backed - the Coalition said low-paid workers "are often found in high-income households".