What Is Base Salary? A Guide to Gross Pay, Super, and Tax in Australia

What Is Base Salary?

Base salary is the minimum rate of pay you receive for your ordinary hours of work. It’s the foundation of your pay packet, before any extras like overtime, bonuses, commissions, or allowances are added. In Australia, your base salary is set by one of three things: a modern award, an enterprise agreement, or the National Minimum Wage Order if you’re not covered by either.

The Fair Work Ombudsman explains that base salary (also called the base rate of pay) is the amount an employee must be paid for each ordinary hour worked. It doesn’t include penalty rates, shift loadings, or casual loadings – those are paid on top. For casual employees, the base salary is the hourly rate before the 25% casual loading (for award/agreement-free workers) or the award’s casual rate.

How Is Base Salary Determined?

Most employees in the national system are covered by a modern award. The Fair Work Commission’s pay guides show the minimum base salary for each classification in your industry. For example, a retail employee at Level 1 has a base salary of $25.74 per hour from 1 July 2026 (after the 4.75% increase). An enterprise agreement can set a higher base salary, but never lower than the award rate. If you’re award/agreement-free, your base salary is the national minimum wage: $26.44 per hour or $1,004.90 per week ($52,255 annualised).

Your base salary also depends on your age and experience. Junior employees (under 21) receive a percentage of the adult rate. For instance, an 18-year-old on the national minimum wage earns $18.06 per hour. Apprentices and trainees have their own special rates based on the Miscellaneous Award.

Base Salary and the Salary Index

The Salary Index compares your annual gross base salary (or total ordinary-time earnings) to the national benchmark of full-time adult ordinary-time earnings. That benchmark is $108,352 per year (index 100), based on ABS Average Weekly Earnings for May 2026. If your base salary is $52,255 (national minimum wage), your index is 48.2 – meaning you earn about half the average. In contrast, the average base salary in mining (index 154.7) is $167,500, well above the national line.

Different industries and states have different typical base salaries. For example, the average base salary in retail trade is index 75.9 ($82,200), while in professional services it’s 114.7 ($124,300). In Western Australia the state index is 106.9 ($115,825), while Tasmania is 88.6 ($96,008).

Base Salary and Superannuation

Your superannuation guarantee is calculated on your base salary – specifically, on your ordinary time earnings. From 1 July 2026, the super rate is 12%. So if your base salary is $60,000, your employer must contribute $7,200 per year into your super fund. This is on top of your gross pay, not deducted from it. Overtime and bonuses are not always included in ordinary time earnings, so your super might be based only on your base salary.

Base Salary and Tax

Your base salary is the starting point for calculating your income tax. The Australian Tax Office (ATO) uses your total gross salary (base plus extras) to determine your tax bracket. For 2026–27, the resident tax rates (excluding Medicare) are:

• Nil on the first $18,200
• 15% on income from $18,201 to $45,000
• 30% on income from $45,001 to $135,000
• 37% on income from $135,001 to $190,000
• 45% on income above $190,001

Plus a 2% Medicare levy. For someone on the national minimum wage base salary of $52,255, the estimated tax (with tax-free threshold and Medicare) is about $8,667, leaving a take-home pay of $43,588. But remember, this is just an estimate – your actual tax may differ if you have HELP loans or salary sacrifice.

Why Base Salary Matters

Knowing your base salary helps you understand your minimum entitlements, check your pay slip, and negotiate a fair wage. It’s also the figure used in most salary surveys and the Salary Index. If you’re comparing job offers, look at the base salary first – then consider bonuses, super, and other benefits. For more on how awards set base rates, see our topics page.

In short, base salary is your guaranteed ordinary-time pay. It’s not your total package, but it’s the most important number for understanding where you stand in the Australian labour market.