What an Annualised Salary Means When Comparing Job Offers
Learn how to compare job offers using annualised salary. Understand the national index, award entitlements, and what your pay is really worth.
An annualised salary of $108,352 matches the national full-time adult ordinary-time earnings index of 100; lower or higher amounts shift the index accordingly.
What Is an Annualised Salary?
When you see a job ad that says "annualised salary, it means the employer pays you a fixed amount each year. This amount is intended to cover your minimum entitlements under the award or enterprise agreement. These entitlements can include minimum pay rates, penalties, overtime, allowances, and annual leave loading. The Fair Work Ombudsman explains that an annualised wage arrangement must follow the rules in the award or agreement that applies. It must be reviewed every 12 months (or when employment ends) to check if the employee was paid at least what they would have been entitled to under the award.
Annualised Salary and Awards
Many modern awards allow annualised wages. The Fair Work Commission publishes the Modern Awards Pay Database with the calculated minimum rates, allowances, overtime, and penalty rates. From 1 July 2026, the national minimum wage is $26.44 per hour, $1,004.90 per week, annualised to $52,255 (index 48.2). Award minima rose 4.75% from 1 July 2026. If an award doesn't apply, a salary must provide at least the National Minimum Wage and National Employment Standards.
Comparing Offers with the Salary Index
The Salary Index helps you see where a pay figure sits against the national line. Index 100 equals full-time adult ordinary-time earnings of $108,352 per year (from ABS Average Weekly Earnings, May 2026). For example, a job offering $90,000 annualised salary gives an index of 83.1. Compare that to the state indices: NSW index 101.2, VIC 98.0, QLD 97.9, SA 94.6, WA 106.9, TAS 88.6, NT 95.2, ACT 109.9. Industry indices: Mining 154.7, Retail trade 75.9, Accommodation and food services 72.5, Professional, scientific and technical 114.7, Education and training 105.5, Health care and social assistance 97.8.
Example: Reading a Job Ad
Suppose a job ad says "annualised salary $100,000 plus super." The gross salary is $100,000. Divide by $108,352 and multiply by 100 to get an index of 92.3. That means it is about 92% of the national line. If the job is in Queensland (index 97.9), the salary is slightly below the state average. If it's in retail trade (index 75.9), the salary is above the industry average. Use the Salary Index to compare across offers.
Key Considerations
An annualised salary may not include all entitlements. Always check the specific award or enterprise agreement for your classification. The index figures are gross ordinary-time benchmarks, not a quote for a person, award classification, or job offer. Take-home pay is a resident estimate with the tax-free threshold and a flat 2% Medicare levy. It ignores HELP, salary sacrifice, the Medicare levy reduction, and the Medicare levy surcharge. For more details, see how the index works and topics. Also explore industries and states for specific benchmarks.
Remember, an annualised salary must be reviewed every 12 months. If the total amount paid was less than the award minimum, the employer must pay the difference. Fair Work Ombudsman provides guidance on offsetting and record-keeping for salaried employees. Always keep records of hours worked and entitlements covered.
By understanding the annualised salary and using the Salary Index, you can make informed decisions when comparing job offers. Whether you are looking at a $80,000 salary in Tasmania (index 88.6) or a $120,000 salary in ACT (index 109.9), the index gives you a clear picture of where your pay stands.
Questions people ask
What is an annualised salary?
An annualised salary is a fixed amount paid to an employee over a year, often covering multiple entitlements such as minimum pay rates, penalties, overtime, allowances, and annual leave loading. It is an alternative to paying an hourly wage each pay period and must follow rules in the applicable award or enterprise agreement. Fair Work Ombudsman requires that the arrangement to be reviewed every 12 months to ensure the employee received at least the award minimum.
How does an annualised salary compare to an hourly wage?
An annualised salary simplifies pay by providing a consistent amount each pay period, but it must not be less than the employee would have received under the award for the work performed during the year. For example, if an employee works more than a maximum penalty rate or overtime hours, they may be entitled to additional payment on top of the annualised wage. The hourly equivalent can be calculated by dividing the annualised salary by 52 weeks divided by hours per week.
How do I calculate the Salary Index for an annualised salary?
To calculate the Salary Index for an annualised salary, divide the annual gross salary by the national full-time adult ordinary-time earnings of $108,352 and multiply by 100. For example, a $90,000 annualised salary gives an index of 83.1, meaning it is about 83% of the national line. This helps compare offers across different states or industries using the state and industry indices provided by Salary Index.