What is the difference between a salary and a wage?

A wage is typically paid by the hour, and your total pay depends on the number of hours worked. A salary is a fixed annual amount, often expressed as a yearly figure, and is usually paid in equal instalments regardless of hours worked (within reason). In Australia, both must meet minimum legal requirements: the national minimum wage or the relevant award rate. A salary must be enough to cover the hourly minimum for all ordinary hours and any penalty rates or overtime if the award applies.

How can I check if my salary meets the minimum wage?

Divide your annual salary by 52 to get a weekly figure, then divide by your ordinary weekly hours (usually 38). The resulting hourly rate must be at least the national minimum wage ($26.44 from 1 July 2026) or the relevant award rate if you are covered by an award. If your salary is meant to cover penalty rates or overtime, the hourly rate must be higher to compensate. Use the Fair Work Ombudsman’s Pay and Conditions Tool or check your award on the Fair Work Commission’s Modern Awards Pay Database.

Does superannuation apply to both salary and wage?

Yes. The superannuation guarantee requires employers to pay 12% of ordinary time earnings into your super fund. This applies to both salary and wage earners. For wage earners, super is calculated on the hourly rate times ordinary hours. For salaried employees, it is calculated on the salary amount (excluding overtime). The super payment is on top of your gross pay, not deducted from it.

Understanding the difference between salary and wage in Australia

The national minimum wage for adult award-free employees is $26.44 per hour or $1,004.90 per week from 1 July 2026.

Difference between salary and wage: what Australian workers need to know

The terms 'salary' and 'wage' are often used interchangeably, but they have distinct meanings in Australian employment law. Understanding the difference between salary and wage helps you know your minimum entitlements, how your pay is calculated, and whether you are being paid fairly.

What is a wage?

A wage is pay calculated by the hour. If you are a wage earner, you are paid a set rate for each hour you work. Your total weekly or fortnightly pay varies with the number of hours you actually work. Most employees covered by a modern award are paid a wage, because awards set hourly rates for each classification. The Fair Work Ombudsman explains that the national minimum wage is $26.44 per hour from 1 July 2026 for adult award-free employees. This is the legal floor. If you are covered by an award, your minimum hourly rate is set by that award and is usually higher than the national minimum.

What is a salary?

A salary is a fixed annual amount of pay, usually expressed as a yearly figure. Salaried employees receive the same amount each pay period regardless of the exact number of hours worked, as long as they work their ordinary hours. A salary can be a convenient way to simplify pay, but it must still meet the minimum legal requirements. If you are covered by an award, your salary must be enough to cover the award’s minimum hourly rate for all ordinary hours, plus any penalty rates, overtime, or allowances that apply. The Fair Work Commission sets award rates, and an enterprise agreement can also set higher rates.

Legal minimum vs award rates vs survey averages vs negotiated salary

It is important to separate the legal minimum from other figures. The legal minimum is the national minimum wage ($26.44 per hour) for award-free employees, or the relevant award rate for those covered by an award. Award rates vary by industry and classification. For example, the lowest ongoing classification under a modern award cannot be less than $26.44 per hour, but introductory rates can be lower ($25.74 per hour for the first six months).

Survey averages, such as those from the Australian Bureau of Statistics, show what people actually earn. The ABS reported that in May 2026, full-time adult ordinary-time earnings averaged $2,083.70 per week. This is much higher than the minimum, reflecting experience, qualifications, and market conditions.

A negotiated salary is what you and your employer agree on. It can be above the award or minimum, but it cannot be below. If your salary is intended to cover all award entitlements, it must be high enough to do so. The Fair Work Ombudsman provides guidance on annualised salary arrangements.

Superannuation is on top

Regardless of whether you are paid a wage or a salary, your employer must pay superannuation guarantee contributions of 12% of your ordinary time earnings into a super fund. This is on top of your gross pay. For a wage earner on the national minimum wage, that means an extra $3.17 per hour (12% of $26.44) goes to super. For a salaried employee earning $100,000 per year, the employer pays an additional $12,000 into super. Super is not deducted from your pay; it is an extra cost for the employer.

Which minimum wage applies to you?

Most private-sector employees in Australia are in the national system and are covered by a modern award or enterprise agreement. If you are award-free and agreement-free, the national minimum wage applies. However, juniors, apprentices, trainees, and employees with a disability may be paid less. For example, an award-free 17-year-old is entitled to 57.8% of the adult rate, or $15.29 per hour. Always check your specific situation using the Which minimum wage applies guide or the Rate tables on this site.

Key takeaway

The difference between salary and wage is mainly about how pay is calculated: hourly versus fixed annual amount. Both must meet the same legal minimums. If you are offered a salary, always check that it covers the award rate for your classification and hours. Use the Fair Work Ombudsman’s tools or consult your award. Remember that super is an additional payment your employer must make on your behalf.

For the published floors, see the rate tables and how the figures work.