How Much Should My Salary Increase Each Year in Australia? A Guide to Reading Job Ads and Comparing Offers

How Much Should My Salary Increase Each Year in Australia?

When you’re reading a job ad and comparing offers, one of the first questions that comes to mind is: how much should my salary increase each year in Australia? The short answer is that there is no single figure. Your annual pay movement depends on whether you’re covered by an award, an enterprise agreement, or an individual contract, and on the industry and state you work in. This guide explains the key factors that influence annual salary increases and shows you how to use the Salary Index to compare offers objectively.

What Drives Annual Salary Increases?

Award and minimum wage reviews

If you’re employed under a modern award, your minimum pay rate is reviewed each year by the Fair Work Commission. From 1 July 2026, award minima rose by 4.75%. The National Minimum Wage also increased to $26.44 per hour ($1,004.90 per week). For award-covered employees, this is the floor – your employer must pay at least that amount for your classification. Some awards have additional staged increases; for instance, the Social, Community, Home Care and Disability Services Award will see home care disability employees receive up to 15% more from December 2026. Always check the relevant pay guides for your award.

Enterprise agreements

If your workplace has an enterprise agreement, it will specify wage increases – often a fixed percentage each year or a rise linked to the Consumer Price Index. These agreements are registered with the Fair Work Commission and override award rates as long as they are not less favourable overall.

Individual contracts and market rates

For employees not covered by awards or agreements (about 38.5% of employees, according to the Australian Bureau of Statistics), salary increases are negotiated. Market conditions, your performance, and the employer’s budget all play a role. The ABS reports that average weekly ordinary time earnings for full-time adults rose 3.7% annually to $2,083.70 in May 2026. That’s a useful benchmark, but your actual increase could be higher or lower depending on your industry and role.

Using the Salary Index to Compare Offers

The Salary Index sets 100 as the national line: full-time adult ordinary-time earnings of $2,083.70 per week, annualised to $108,352. To compare two job offers, calculate each offer’s index: (annual gross salary ÷ $108,352) × 100. For example:

• Offer A: Retail sales assistant, $82,000 per year → index 75.9
• Offer B: Professional services consultant, $124,000 per year → index 114.7

This tells you that Offer B is 14.7% above the national average, while Offer A is 24.1% below. You can then look at industry benchmarks: industries like mining (154.7) and professional, scientific and technical services (114.7) tend to pay above the line, while retail trade (75.9) and accommodation and food services (72.5) pay below. State indices also matter – for example, states like Western Australia (106.9) and the Australian Capital Territory (109.9) have higher average earnings than Tasmania (88.6) or South Australia (94.6).

What About Super and Tax?

Salary increases are usually quoted as gross pay before tax. From 1 July 2026, the superannuation guarantee is 12% on top of your salary, up to a maximum contribution base of $270,830. That’s an extra benefit, but it’s not part of your take-home pay. When comparing offers, remember that tax rates for 2026–27 (resident, excluding Medicare) are: nil up to $18,200, 15% from $18,201 to $45,000, 30% to $135,000, 37% to $190,000, and 45% above. Add the 2% Medicare levy. Your take-home pay will be lower than the gross figure, but the index comparison uses gross earnings to keep it consistent.

Putting It All Together: Reading a Job Ad

When you see a job ad, look for:

• The annual salary or hourly rate. If it’s hourly, multiply by 38 hours per week and 52 weeks to get an annual figure (or use the Salary Index calculator).
• Whether the role is covered by an award. If so, check the award’s minimum rate for your classification.
• Any mention of annual reviews or performance bonuses. Some employers advertise “annual salary review” but don’t guarantee an increase.
• The location – state indices help you adjust for cost of living differences.

For example, a job in Sydney (NSW index 101.2) paying $110,000 is close to the national line, while the same salary in Hobart (Tasmania index 88.6) would be well above the local average. Use the index to see how an offer stacks up against the market.

The Bottom Line

There is no one-size-fits-all answer to how much your salary should increase each year in Australia. Award-covered employees can expect at least the annual wage review increase (4.75% in 2026), while others rely on negotiation and market forces. The best way to evaluate an offer is to benchmark it using the Salary Index, which gives you a clear picture of where it sits relative to the national average, your industry, and your state. Whether you’re comparing two job ads or planning your next career move, the index helps you make an informed decision.

For more detailed pay rates, visit the pay guides page or explore topics on salary negotiation and award classifications.