What is salary? Awards, the national minimum wage and where your pay sits on the index
Understand what salary means in Australia, how it relates to awards and the national minimum wage, and where your pay sits on the Salary Index.
Salary is your annual gross pay; the national benchmark (index 100) is $108,352, while the national minimum wage sits at index 48.2.
What is salary in Australia?
Salary is the annual gross pay you receive from your employer before tax and super. In Australia, your salary is shaped by two main legal frameworks: the National Minimum Wage and modern awards. Understanding where your pay sits against these benchmarks helps you know if you're being paid fairly.
The national benchmark: index 100
The Australian Bureau of Statistics (ABS) measures full-time adult ordinary time earnings. As of May 2026, that average is $2,083.70 per week, or $108,352 per year. The Salary Index uses this as the baseline (index 100). If your salary is exactly $108,352, your index is 100. If it's half that, your index is 50.
The National Minimum Wage
The Fair Work Ombudsman sets the National Minimum Wage each year. From 1 July 2026, it is $26.44 per hour or $1,004.90 per week, annualised to $52,255. On the index, that's 48.2 – less than half the average full-time earner. This rate applies only to employees not covered by an award or registered agreement. Most workers are covered by an award, so the National Minimum Wage is a safety net, not the typical floor.
Awards: the real minimum for most
Modern awards cover specific industries and occupations. They set minimum pay rates for each classification level, plus penalty rates, allowances, and conditions. Award minimums are often higher than the National Minimum Wage. For example, the Retail Award might set a minimum of $25.74 per hour for an entry-level adult – that's slightly below the national minimum, but only for introductory periods. After that, the rate rises. The Fair Work Ombudsman explains that some award rates can be less than the National Minimum Wage for limited introductory periods, but the award rate still applies.
Award wages rose by 4.75% from 1 July 2026, reflecting the Annual Wage Review. That means most award-covered employees got a pay increase on that date.
How the index helps compare
The industries page shows average earnings by sector. For instance:
- Mining: index 154.7 (average $167,658/year)
- Retail trade: index 75.9 (average $82,243/year)
- Accommodation and food services: index 72.5 (average $78,515/year)
- Professional, scientific and technical services: index 114.7 (average $124,259/year)
These are averages, not minimums. A retail worker on the award minimum might earn well below the industry average. The index helps you see where your personal salary sits relative to the national line.
Casual loading and super
If you're a casual employee, you get a loading of at least 25% on top of the minimum rate. For the National Minimum Wage, that's $33.05 per hour. Superannuation guarantee is 12% from 1 July 2026, paid on top of your salary. Your salary figure in your contract is usually gross before super.
State differences
Where you live also matters. The states page shows average full-time adult ordinary time earnings by state. For example:
- ACT: index 109.9 ($119,090/year)
- WA: index 106.9 ($115,825/year)
- Tasmania: index 88.6 ($96,008/year)
Award rates are national, but actual salaries vary by location.
Putting it together: what is salary?
Your salary is the annual amount you agree with your employer. It must be at least the award rate for your classification (or the National Minimum Wage if no award applies). The pay guides from Fair Work Ombudsman list minimum rates for each award. To see where your salary ranks nationally, use the how the index works page to calculate your personal index.
For example, if you earn $70,000 a year as a full-time adult, your index is about 64.6 – below the national average but above the minimum wage index of 48.2. If you earn $120,000, your index is 110.8, above the national line.
Tax and take-home pay
Salary is gross. From 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. Take-home pay estimates on this site use those rates with the tax-free threshold and flat Medicare levy, ignoring HELP, salary sacrifice, and surcharges.
Bottom line
Salary in Australia is not just a number – it's anchored by the National Minimum Wage and modern awards. The Salary Index gives you a quick way to compare your pay against the national average. Whether you're on an award or an enterprise agreement, knowing your minimum entitlement is the first step to understanding what your salary really means.
Questions people ask
What is the difference between salary and wages in Australia?
Salary is usually expressed as an annual amount, while wages are often quoted per hour or per week. Both refer to gross pay before tax and super. In Australia, most full-time employees are paid a salary, but the legal minimum is set by the award or the National Minimum Wage. The Salary Index converts any annual salary into a number relative to the national benchmark of $108,352 (index 100).
How does an award affect my salary?
A modern award sets the minimum pay rate for your industry and job classification. Your salary cannot be less than the award rate for your role. Awards also include penalty rates, allowances, and conditions. If your award rate is higher than the National Minimum Wage, that is your legal floor. The Salary Index helps you see where your salary sits compared to the average full-time adult earner.
Is the national minimum wage the same as the award minimum?
No. The National Minimum Wage ($26.44/hr from 1 July 2026) applies only to employees not covered by an award or registered agreement. Most workers are covered by an award, which often sets higher minimum rates. For example, a retail employee might have a minimum rate above $26.44 depending on their classification. Always check your award via the Fair Work Ombudsman's Pay Calculator.