Salary vs Wages: How to Compare Job Offers Using the Salary Index
Understand the difference between salary and wages in Australia. Learn how to compare job offers using the Salary Index, awards, and national benchmarks.
The national benchmark (index 100) is $108,352 per year, based on full-time adult ordinary-time earnings of $2,083.70 per week (ABS, May 2026).
Salary vs Wages: What’s the Difference?
When you read a job ad, you’ll see offers described as either a salary or wages. In Australia, these terms aren’t interchangeable—they signal different types of employment arrangements, pay structures, and legal protections. Understanding the difference helps you compare offers fairly, whether you’re a full-time professional or a casual worker under an award.
Salary typically means a fixed annual amount, paid in equal instalments regardless of hours worked. It’s common in professional, managerial, and administrative roles. Salaried employees are usually covered by an award or enterprise agreement that sets minimum pay, but the annual figure includes all ordinary hours. Overtime may be paid separately or included in an annualised salary arrangement.
Wages are calculated by the hour or week, often with penalty rates for evenings, weekends, or public holidays. Wage earners are usually covered by a modern award that specifies minimum hourly rates, loadings, and allowances. The Fair Work Ombudsman provides pay guides for each award, showing the exact rates for different classifications.
How the Salary Index Helps You Compare
The Salary Index sets a national benchmark where 100 equals full-time adult ordinary-time earnings. According to the Australian Bureau of Statistics, that figure was $2,083.70 per week in May 2026, annualised to $108,352. This is the average for all full-time adults, not a minimum or maximum.
To compare a salary offer with a wage offer, convert both to a yearly gross figure:
- Salary: use the annual figure as stated.
- Wages: multiply the hourly rate by 38 hours (standard full-time week) then by 52 weeks. If the ad mentions a casual loading (e.g., 25%), include that in the hourly rate.
Then divide that annual figure by $108,352 and multiply by 100. The result is the index number. For example:
- National minimum wage: $26.44/hr × 38 × 52 = $52,255/year → index 48.2.
- A salary of $120,000 → index 110.8.
- A casual wage of $33.05/hr (including loading) → $65,309/year → index 60.3.
The index lets you see where any offer sits against the national line, regardless of how the pay is described.
Reading Job Ads: What to Look For
Job ads must comply with the Fair Work Act. They can’t advertise pay rates below the applicable award or the National Minimum Wage. The Fair Work Ombudsman’s Pay and Conditions Tool helps you check the correct minimum for your role.
When comparing offers, look beyond the headline figure:
- Is it salary or wages? A salary might include all hours, while wages could mean extra pay for overtime or weekends.
- Is superannuation included? The super guarantee is 12% from 1 July 2026, paid on top of base pay. The Salary Index uses gross ordinary-time earnings before super, so you can compare base pay directly.
- What award applies? Awards set minimum rates, but many pay above the minimum. Check the industries page for sector benchmarks. For example, Mining has an index of 154.7, while Retail trade is 75.9.
- Where is the job? State indices vary: ACT is 109.9, WA is 106.9, while Tasmania is 88.6. The states page shows all state benchmarks.
Awards, Minimum Wage, and the National Line
The National Minimum Wage from 1 July 2026 is $26.44 per hour or $1,004.90 per week. This applies only to employees not covered by an award or registered agreement. Most workers are covered by an award, which often pays more. Award minimum wages rose by 4.75% from 1 July 2026, and some awards have special rates—for example, the Health Services Award changed from 1 October 2026, and the SCHADS Award will increase home care disability rates from 1 December 2026.
Junior rates are lower: under 16 years $9.73/hr, 16 years $12.51/hr, up to 20 years $25.83/hr. These are based on the adult national minimum wage multiplied by percentages set in National Minimum Wage Orders. Awards may set different junior rates.
Tax and Take-Home Pay
Your take-home pay depends on tax and the Medicare levy. For 2026–27, resident tax rates (excluding Medicare) are:
- 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. This ignores HELP repayments, salary sacrifice, and the Medicare levy surcharge. Use the how the index works page to estimate net pay for any index figure.
Putting It All Together
When you see a job ad, ask: Is this salary or wages? What award applies? What’s the index? The Salary Index gives you a single number to compare offers across industries, states, and pay structures. For example, a $100,000 salary in NSW (index 101.2) is close to the national line, while the same salary in WA (index 106.9) is below the state average.
Use the Salary Index to check any offer, and explore topics for more guides on pay, awards, and superannuation.
Questions people ask
What is the difference between salary and wages in Australia?
Salary is usually a fixed annual amount paid to employees in professional or managerial roles, regardless of hours worked. Wages are paid by the hour or week and often include penalty rates, overtime, and allowances under a modern award. The Fair Work Ombudsman sets minimum wages for award-covered employees, while the National Minimum Wage applies to those not covered by an award.
How can I compare a salary offer with a wage offer using the Salary Index?
Convert both offers to a yearly gross figure. For a wage, multiply the hourly rate by 38 hours (standard full-time week) and then by 52 weeks. Then divide that annual figure by the national benchmark ($108,352) and multiply by 100 to get the index. For example, the national minimum wage ($52,255/year) has an index of 48.2. A salary of $120,000 has an index of 110.8.
Do salary and wage offers include superannuation?
Salary and wage figures in job ads are usually base pay excluding super. The superannuation guarantee is 12% from 1 July 2026, paid on top of the base. When comparing offers, add 12% to the base to see total remuneration. The Salary Index uses gross ordinary-time earnings before super, so you can compare base pay directly.