Salary and wages: gross pay, super, and tax explained
Understand how salary and wages relate to gross pay, superannuation, and tax in Australia. Use the Salary Index to benchmark your earnings against national averages.
The national line for full-time adult ordinary-time earnings is $108,352 per year (index 100), with salary and wages varying by award, industry, and state.
What salary and wages mean for your pocket
When you talk about salary and wages in Australia, you're really talking about the gross amount you earn before anything is taken out. But what you actually get to spend – your take-home pay – depends on two big factors: superannuation and tax. Understanding how these pieces fit together helps you see where your earnings sit against the national line.
The Salary Index sets that national line at 100, which equals full-time adult ordinary-time earnings of $2,083.70 per week, or $108,352 a year (from the Australian Bureau of Statistics' Average Weekly Earnings, May 2026). If your gross salary is above that, your index is above 100; if it's below, your index is lower. For example, someone on the national minimum wage of $26.44 per hour earns $52,255 a year, giving an index of 48.2.
Gross pay: the starting point
Your gross pay is the amount agreed in your contract or set by an award. Most employees are covered by a modern award or enterprise agreement that sets minimum rates. The Fair Work Ombudsman explains that awards cover many industries and occupations, and the minimum wage in an award can be higher than the national minimum wage. For instance, the entry-level award floor from 1 July 2026 is $25.74 per hour, but many classifications pay more.
If you're award-free, the national minimum wage applies. From 1 July 2026, that's $26.44 per hour for adults. Junior employees (under 21) have lower minimum rates – for example, a 16-year-old gets $12.51 per hour under the national minimum wage order. But remember: if a modern award covers you, it may set a different junior rate.
Casual employees get a 25% loading on top of the base rate. So a casual adult on the national minimum wage earns $33.05 per hour. That loading is meant to compensate for not receiving paid leave.
Superannuation: money you don't see today
Super is a key part of your total remuneration package. From 1 July 2026, the super guarantee is 12% of your gross salary and wages, paid by your employer into a super fund. It's not deducted from your pay – it's on top. So if your gross salary is $80,000, your employer contributes $9,600 to super. That money is locked away until retirement (with some exceptions).
The maximum contribution base is $270,830 for 2026–27, meaning super is only calculated on earnings up to that amount. Some awards or agreements require higher contributions, but 12% is the legal minimum for most employees.
When comparing job offers, look at the total package: gross pay plus super. The Salary Index uses gross pay only, because super is not part of your take-home cash flow. But it's still part of your wealth.
Tax: what you actually take home
Your employer withholds tax from each pay cheque using the PAYG system. For the 2026–27 year, resident tax rates (excluding Medicare) are:
- Nil on the first $18,200
- 15% on income 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 on your taxable income. So if you earn $80,000 gross, your tax (before offsets) is roughly $5,092 on the first $45,000 (15% of $26,800) plus $10,500 on the next $35,000 (30%), total $15,592, plus Medicare of $1,600, leaving about $62,808 take-home. That's a rough estimate – it ignores HELP repayments, salary sacrifice, and the Medicare levy reduction or surcharge.
How your salary and wages compare
Your gross pay might be higher or lower than the national line depending on where you work and what you do. The states page shows how average earnings vary: ACT leads at index 109.9 ($119,090), while Tasmania is 88.6 ($96,008). Industries also differ widely – mining workers average index 154.7, while retail trade is 75.9 and accommodation and food services is 72.5. The industries page has more detail.
If you're covered by an award, check the pay guides for your classification. Awards set minimum rates, but many employers pay above the minimum. The Salary Index helps you see where your gross pay sits relative to the national average, but remember: it's a benchmark, not a quote for a specific job.
Putting it all together
When you see a salary figure, think of it as gross pay. Then add 12% super to understand the total cost to your employer. Then subtract tax and Medicare to get your take-home pay. That's the real picture of what your salary and wages mean for your day-to-day finances.
The Salary Index is a tool to compare your gross pay against the national line. It doesn't include super or tax, but it gives you a quick sense of where you stand. For a deeper dive, explore the topics page or read about how the index works.
Questions people ask
What is the difference between salary and wages in Australia?
Salary is typically a fixed annual amount paid regardless of hours worked, while wages are paid per hour or per week. Both are forms of gross pay before tax and super. In Australia, most employees are covered by a modern award or enterprise agreement that sets minimum hourly or weekly rates. The national minimum wage ($26.44/hr from 1 July 2026) applies to award-free employees. The Salary Index uses annualised gross pay to compare across roles.
How is superannuation calculated on salary and wages?
From 1 July 2026, the super guarantee is 12% of your gross salary or wages, paid by your employer into a super fund. For example, if you earn $80,000 gross, your employer contributes $9,600 per year. Super is not included in your take-home pay. The maximum contribution base is $270,830, meaning super is only calculated on earnings up to that amount. Some awards or agreements may require higher contributions.
How does tax apply to salary and wages?
Tax is withheld from your gross pay by your employer using the PAYG system. For 2026–27, resident tax rates (excluding Medicare) are: nil on the first $18,200, 15% on income from $18,201 to $45,000, 30% from $45,001 to $135,000, 37% from $135,001 to $190,000, and 45% above $190,000. A 2% Medicare levy also applies. Your take-home pay is gross pay minus tax and Medicare. Use the Salary Index to see where your gross pay sits relative to the national average.