OTE salary explained: awards versus the national minimum wage

What is OTE salary?

OTE stands for ordinary time earnings. It’s the amount your employer pays you for your ordinary hours of work – the hours you’re rostered or expected to work under your award, agreement, or contract. OTE isn’t just your base hourly rate; it includes things like casual loading, shift penalties, commissions, and performance bonuses. It’s the figure your employer uses to work out the minimum super guarantee contribution (12% from 1 July 2026).

Understanding your OTE salary helps you see where your pay sits against the national line. On the Salary Index, the national benchmark is 100, which equals full-time adult ordinary-time earnings of $2,083.70 per week (annualised $108,352), according to the Australian Bureau of Statistics Average Weekly Earnings for May 2026.

Awards versus the national minimum wage

The national minimum wage is the legal floor: $26.44 per hour, or $1,004.90 per week (annualised $52,255, index 48.2). But most employees are covered by a modern award or enterprise agreement that sets higher rates. Awards are industry or occupation-specific and are reviewed annually by the Fair Work Commission. For example, the entry-level award floor is $25.74 per hour – slightly below the national minimum – but that’s only the lowest classification in some awards. Most award classifications pay well above the national minimum.

Your OTE salary is directly affected by which award applies to you. If you work under the Hospitality Award, your ordinary hourly rate might be $27.50, plus casual loading if you’re casual. If you’re under the Clerks Award, your rate could be $28.00. These award rates are OTE, and they determine your super guarantee contributions.

How OTE differs from total earnings

OTE is not the same as your total gross pay. Overtime payments are not OTE if your ordinary hours are clearly defined in your award. For instance, if you work 38 ordinary hours and 5 overtime hours, only the 38 hours count as OTE. The overtime is still salary or wages for tax purposes, but it doesn’t attract super guarantee. The Australian Taxation Office provides a detailed list of what counts as OTE – including shift penalties, commissions, and piece rates – and what doesn’t, such as overtime and annual leave loading referrable to lost overtime.

Example: casual employee under an award

Let’s say you’re a casual retail worker under the General Retail Industry Award. Your base hourly rate is $27.00 (above the national minimum). Because you’re casual, you get a 25% loading, making your OTE rate $33.75 per hour. Your employer calculates super guarantee on that $33.75, not the base rate. If you work 30 ordinary hours in a week, your OTE is $1,012.50. Compare that to the national line: $1,012.50 is about 48.6% of the full-time adult benchmark of $2,083.70, giving you an index of 48.6. That’s close to the national minimum wage index (48.2), but your actual take-home is higher because of the loading.

Using the Salary Index to compare your OTE

The Salary Index lets you see where your gross annual OTE sits against the national line. Divide your yearly OTE by $108,352 and multiply by 100. For example, if your OTE is $60,000, your index is 55.4. If it’s $80,000, your index is 73.8. The index works for any pay arrangement – full-time, part-time, or casual – as long as you use your ordinary time earnings, not overtime.

State and industry benchmarks also help. For instance, the states page shows that Western Australia has an index of 106.9, while Tasmania is 88.6. In industries, mining tops at 154.7, while retail trade is 75.9. If your OTE is below the industry average, you might be under an award that hasn’t kept pace, or you may be in a lower classification.

What about super and tax?

Your OTE salary determines your super guarantee. From 1 July 2026, the rate is 12%, up to the maximum contribution base of $270,830. If your OTE is $60,000, your employer must contribute $7,200 to super annually. Tax on your OTE depends on your total income. For 2026–27, resident tax rates start at nil up to $18,200, then 15% to $45,000, 30% to $135,000, and so on. Add the 2% Medicare levy. Take-home pay estimates on the Salary Index assume the tax-free threshold and flat Medicare levy, ignoring HELP repayments or salary sacrifice.

Why awards matter for your OTE

Awards set the minimum conditions for your industry, including ordinary hours, overtime rates, and allowances. If your award specifies that ordinary hours are 38 per week, then any hours beyond that are overtime and not OTE. But if your award doesn’t clearly define ordinary hours, all hours you work are considered ordinary hours for OTE purposes. That’s why it’s important to know your award. The pay guides on Salary Index can help you find your award classification and compare rates.

Example: shift worker under an award

A factory worker under the Manufacturing Award might have ordinary hours of 38 per week, with shift penalties for afternoon or night shifts. The base rate is $28.00 per hour, but the afternoon shift penalty adds 15%, making OTE $32.20 per hour. If they work 38 ordinary hours, weekly OTE is $1,223.60, index 58.7. The same worker doing 5 hours overtime at time-and-a-half would earn extra, but those overtime dollars don’t count as OTE.

Final thoughts

Your OTE salary is the key number for super, and it’s shaped by your award or agreement. The national minimum wage is a baseline, but most people earn above it thanks to award rates, loadings, and penalties. Use the Salary Index to see how your OTE compares, and check your award to make sure you’re getting the right loadings and allowances. If you’re unsure, the Fair Work Ombudsman website has pay calculators and award summaries.