Minimum wage in the USA vs Australia: State and industry differences

Minimum wage in the USA vs Australia: State and industry differences

When people search for "minimum wage in USA", they often want to understand how Australia compares. The short answer: Australia’s national minimum wage is much higher in dollar terms, but the real story is in the differences between states and industries. This guide uses the Salary Index to show where the minimum wage sits against the national line, and how state and industry benchmarks vary.

Australia’s minimum wage system

Australia’s national minimum wage is set by the Fair Work Commission each year. From 1 July 2026, it is $26.44 per hour or $1,004.90 per week (38 hours). That annualises to $52,255, giving an index of 48.2 – meaning it is less than half of full-time adult ordinary-time earnings (index 100). Casual employees get a 25% loading, so $33.05 per hour.

Most workers are covered by a modern award, which sets minimum rates higher than the national minimum. Awards rose by 4.75% from 1 July 2026. The lowest award rate for ongoing employment must be at least $26.44 per hour, and entry-level rates (first six months) must be at least $25.74 per hour. Junior rates apply for under-21s, ranging from $9.73 (under 16) to $25.83 (20 years).

State differences: not in minimum wage, but in average earnings

Unlike the US, where each state can set its own minimum wage, Australia has a single national minimum wage and award system. However, average earnings vary significantly by state. The states page shows indices based on ABS Average Weekly Earnings (May 2026):

• ACT: 109.9 ($1,190.90/week annualised)
• WA: 106.9 ($1,158.25)
• NSW: 101.2 ($1,096.58)
• VIC: 98 ($1,061.37)
• QLD: 97.9 ($1,060.64)
• NT: 95.2 ($1,031.73)
• SA: 94.6 ($1,024.50)
• TAS: 88.6 ($960.08)

These indices reflect the mix of industries and occupations in each state. For example, WA’s high index is driven by mining, while Tasmania’s lower index reflects a larger share of hospitality and retail jobs. So while the minimum wage in the USA might be $7.25 federally but $16 in Washington state, Australia’s differences show up in average pay rather than legal minimums.

Industry differences: where the minimum wage bites hardest

Industry awards create a floor, but actual average earnings vary enormously. The industries page shows indices:

• Mining: 154.7 – well above the national line
• Professional, scientific and technical: 114.7
• Education and training: 105.5
• Health care and social assistance: 97.8
• Retail trade: 75.9
• Accommodation and food services: 72.5

Workers in retail and hospitality are closest to the minimum wage. For example, a retail sales assistant on the Retail Award might earn around $27–$28 per hour, still far below the national average. The minimum wage in the USA also varies by industry – for instance, tipped workers in restaurants can be paid as low as $2.13 per hour federally – but Australia’s award system ensures a higher floor across all industries.

How the Salary Index helps

The Salary Index converts any annual gross salary into an index where 100 equals full-time adult ordinary-time earnings ($108,352). The national minimum wage index of 48.2 shows how far below the average it sits. For comparison, a retail worker earning $55,000 has an index of 50.8, while a mining engineer on $150,000 has an index of 138.5.

When you look at state and industry indices, remember they are averages. A person working in hospitality in Tasmania may earn less than the state average, while a professional in the ACT may earn more. The index is a benchmark, not a promise.

Tax and super considerations

From 1 July 2026, the super guarantee is 12% on wages up to $270,830. So on the national minimum wage of $52,255, an employer must contribute $6,270.60 in super. For a casual on $33.05 per hour, super is also 12%.

Resident tax rates for 2026-27 (excluding Medicare): nil up to $18,200; 15% from $18,201 to $45,000; 30% to $135,000; 37% to $190,000; 45% above. Plus a 2% Medicare levy. A full-time worker on the national minimum wage would pay about $5,167 in tax and $1,045 in Medicare levy, leaving a take-home of about $46,043 (excluding super). That’s an index of around 42.5 after tax.

Final thoughts

The minimum wage in the USA is a state-by-state patchwork, while Australia’s is national but with industry-specific awards. The Salary Index shows that even the highest state average (ACT) is only 10% above the national line, while the lowest (Tasmania) is 11% below. Industry differences are starker: mining pays more than double the national minimum wage, while hospitality pays barely above it.

For more detail, see our pay guides and topics pages. The index is a tool to compare any salary against the national benchmark – whether you’re earning the minimum wage or well above.