Seasonally adjusted employment increased by 114,700 people between June and July, and hours worked increased 1.3% according to the Australian Bureau of Statistics (ABS).
The increase in employment was underpinned by a larger increase in part-time employment (71,200 people) compared to full time employment (43,500 people).
Women's hours worked increased more than men's in July, increasing 2.3% compared to 0.6% respectively.
Overall, the percentage of people employed in Australia increased 0.5 percentage points to 59.8%, up from a low of 58.2% in May.
Source: Labour Force, Australia, Jul 2020 - Australian Bureau of Statistics.
"The July figures indicate that employment had recovered by 343,000 people and hours worked had also recovered 5.5% since May," ABS head of labour statistics Bjorn Jarvis said.
"Employment remained over half a million people lower than seen in March, while hours worked remained 5.5% lower.
"[However] the number of unemployed people rose by nearly 16,000 between June and July.
"For the first time there were more than one million people out of work, available to work and actively looking for work," he said.
The participation rate increase 0.6 percentage points to 64.7% in July, while the unemployment rate increased 0.1 percentage points to 7.5%.
The number of unemployed people increased by 15,700 in July 2020 to 1,009,400 people, and has increased by 296,200 people since July 2019.