Australia's minimum wage: what it is and how to compare job offers

Australia's minimum wage: a baseline for comparing job offers

When you read a job ad, the advertised pay is often the first thing you look at. But how do you know if it's a fair offer? The starting point is Australia's minimum wage – the legal floor set by the Fair Work Commission. For 2026–27, that's $26.44 per hour, or $52,255 per year. On the Salary Index, that gives a score of 48.2, meaning it's just under half the national full-time adult ordinary-time earnings benchmark of $108,352.

This article explains how to use the minimum wage as a reference when comparing job offers, whether you're looking at full-time, part-time, or casual roles. We'll cover awards, super, tax, and the salary index so you can make an informed decision.

What the national minimum wage means for job ads

The national minimum wage is the lowest hourly rate an employer can legally pay an employee who isn't covered by a modern award or enterprise agreement. Most jobs, however, fall under an award – a legal document that sets minimum pay and conditions for a specific industry or occupation. Award rates are almost always higher than the national minimum wage.

For example, a retail assistant under the General Retail Industry Award might earn around $25–$28 per hour depending on their classification, while the national minimum wage is $26.44. In hospitality, the Restaurant Industry Award sets rates that can be lower than the national minimum for some entry-level roles, but still above the legal floor. Always check the relevant pay guides for your industry.

When you see a salary in a job ad, ask: is it above the award minimum? If the ad doesn't specify an award, you can look up the classification on the Fair Work Ombudsman website. The how the index works page explains how to convert any annual salary into an index score for easy comparison.

Comparing offers using the salary index

The salary index is a simple tool: divide the annual gross salary by $108,352 (the national line) and multiply by 100. An index of 100 means the pay matches the average full-time adult ordinary-time earnings. An index of 48.2 is the national minimum wage. This lets you see at a glance where an offer sits relative to the broader market.

For instance, a job paying $70,000 per year has an index of about 64.6 – well above the minimum but still below the national average. A role in mining might offer $160,000 (index 147.7), while a retail position at $40,000 (index 36.9) would be below the minimum wage (which is illegal). Use the index to compare offers across different industries and states. Check states for local benchmarks – for example, the ACT index is 109.9, while Tasmania is 88.6.

Awards, enterprise agreements, and the minimum wage

If a job ad mentions a specific award or enterprise agreement, that's your clue to look up the exact pay rates. Awards are legally binding and set minimum wages for each classification level. The Fair Work Commission reviews award rates annually; from 1 July 2026, award minima rose by 4.75%. The entry-level award floor is $25.74 per hour, slightly below the national minimum wage, but most classifications are higher.

Enterprise agreements can set pay above the award, but never below. When comparing offers, factor in any additional benefits like overtime, penalty rates, or allowances. The national minimum wage is the absolute floor – any offer below it is unlawful.

Casual loading and junior rates

Casual employees get a loading (usually 25%) instead of paid leave. So a casual job advertising $33.05 per hour is actually paying the national minimum wage plus loading. The base rate is still $26.44. When comparing casual offers, look at the base rate, not the loaded rate, to see if it meets the minimum.

Junior rates are percentages of the adult minimum wage. For example, a 17-year-old can be paid $15.28 per hour under the national minimum wage order. But some awards set different junior percentages – always check the specific award. If you're under 21, your pay may be lower than the adult minimum wage, but it must still follow the legal percentages or the award's junior rates.

Tax and super: what you actually take home

The advertised salary is gross, before tax and super. From 1 July 2026, the super guarantee is 12% on top of your salary, paid into your super fund. That's extra money for your retirement – it's not part of your take-home pay. For a full-time worker on the national minimum wage of $52,250, your employer must also contribute $6,270 in super.

Income tax for 2026–27 (excluding Medicare) is: nil up to $18,200; 15% from $18,201 to $45,000; 30% from $45,001 to $135,000; 37% from $135,001 to $190,000; 45% above $190,000. Plus a 2% Medicare levy. A single resident on the minimum wage would pay about $5,092 in tax and $1,045 in Medicare levy, leaving about $46,113 take-home. But this ignores HELP debts, salary sacrifice, or the Medicare levy reduction.

When comparing offers, use a take-home calculator or the Salary Index to see the net difference. A higher gross salary doesn't always mean a proportionally higher net if you cross tax brackets.

Putting it all together: reading a job ad

Let's say you see an ad for a full-time retail assistant in Sydney paying $55,000 per year. The national minimum wage is $52,255, so this is above the floor. The retail award might set a minimum of $54,000 for that classification – so the offer is just above award. The salary index for $55,000 is about 50.8, below the national average but above the minimum. In NSW, the state index is 101.2, so this offer is well below the state average. You might negotiate or look for a role that pays closer to the industry average of 75.9 for retail trade.

Another example: a casual hospitality job in Melbourne offering $30 per hour. The base rate (excluding loading) is $24 – that's below the national minimum wage of $26.44, so it's illegal. The employer should be paying at least $26.44 plus 25% loading = $33.05. Always check the base rate.

Final tips for comparing offers

• Know the national minimum wage: $26.44/hr, $52,255/yr, index 48.2.
• Check the relevant award or agreement for your role.
• Use the salary index to compare offers across industries and states.
• Factor in super (12%) and tax when estimating take-home pay.
• For casual roles, compare the base rate, not the loaded rate.
• Junior workers: verify the correct percentage under the award or national minimum wage order.

By using Australia's minimum wage as a baseline, you can quickly assess whether a job offer is fair and competitive. For more detailed comparisons, explore industries and topics on Salary Index.