What is the difference between wage and salary in Australia?

A wage is typically paid by the hour and is the basis for the national minimum wage and most award rates. A salary is a fixed annual amount, often expressed as a yearly figure, and may include an agreement that the salary covers all hours worked (including overtime). The Fair Work Act uses 'wage' for minimum rates, but the key difference is how pay is calculated: hourly versus annualised.

Does superannuation apply to both wages and salaries?

Yes. The super guarantee requires employers to pay 12% on top of ordinary time earnings, whether the employee is paid by the hour (wage) or an annual salary. This is a separate payment on top of the gross pay, not deducted from it.

Can a junior employee be paid less than the national minimum wage?

Yes, if they are award-free and under 21. The Fair Work Commission sets special national minimum wages for juniors as a percentage of the adult rate. For example, a 16-year-old award-free junior gets $12.51 per hour (47.3% of $26.44). However, if a modern award covers the job, the award's junior rates apply instead, which may be higher or lower.

Understanding the difference between wage and salary in Australia

The national minimum wage is $26.44 per hour ($1,004.90 per week) from 1 July 2026, but most employees are covered by a modern award or enterprise agreement that sets higher minimum rates.

The difference between wage and salary: which pay floor applies?

Many Australians use the terms 'wage' and 'salary' interchangeably, but they have distinct meanings in employment law and pay calculations. Understanding the difference between wage and salary helps you know which minimum rate applies to your job and whether you are being paid correctly.

A wage is usually paid by the hour. The national minimum wage, award rates, and penalty rates are all expressed as hourly figures. A salary is a fixed annual amount, often paid fortnightly or monthly, and may be negotiated to cover all hours worked including reasonable overtime. The Fair Work Act refers to 'minimum wages', but a salary can meet that requirement if the annualised amount divided by hours worked is at least the relevant minimum hourly rate.

The legal minimum: national minimum wage

The Fair Work Commission sets the national minimum wage each year. From 1 July 2026, it is $26.44 per hour or $1,004.90 per week for a 38-hour week. This is the floor for employees not covered by a modern award or enterprise agreement (award/agreement-free). The Fair Work Ombudsman explains and enforces these rules.

However, most employees are covered by a modern award. Award minimum wages are generally higher than the national minimum. For example, the lowest ongoing classification in any award cannot fall below $26.44 per hour, but introductory rates (limited to the first six months) can be as low as $25.74 per hour. Always check your award using the Which minimum wage applies tool or the Rate tables on this site.

Award rates and enterprise agreements

If a modern award covers your job, the award's minimum hourly rate (including any applicable penalty rates and allowances) is your legal minimum. Enterprise agreements can set different rates, but they must pass the 'better off overall test' compared to the award. A negotiated salary can be higher than the award rate, but it cannot undercut the award minimum when converted to an hourly figure.

Survey averages vs legal minimums

The Australian Bureau of Statistics (ABS) reports average earnings, which are much higher than the minimum. In May 2026, full-time adult ordinary-time earnings averaged $2,083.70 per week. This includes all industries and experience levels. The national minimum wage is a floor, not a target. A salary offer should be compared to the relevant award rate, not to the average.

Superannuation is on top

Whenever pay is discussed, remember that the super guarantee is an employer payment on top of gross earnings. From 1 July 2026, the rate is 12% of ordinary time earnings. This applies to both wages and salaries. For example, on the national minimum wage of $26.44 per hour, the employer must also contribute $3.17 per hour to super.

Who gets less than the adult minimum?

Not every worker must receive $26.44 per hour. The Fair Work Commission sets special national minimum wages for:

Junior employees (under 21): percentages of the adult rate, e.g., a 16-year-old gets $12.51 per hour (casual $15.64).
Apprentices and trainees: rates based on the Miscellaneous Award.
Employees with disability: a percentage of the national minimum if productivity is affected.

Award-free juniors follow the percentages in the National Minimum Wage Order. If a modern award covers the job, the award's junior rates apply instead. Always check the award.

How to find your correct rate

Use the Guides section to navigate award coverage. The Fair Work Ombudsman's Pay and Conditions Tool can calculate your minimum pay, penalties, and allowances. The Fair Work Commission's Modern Awards Pay Database contains the official minimum rates for each classification.

Summary

The key difference between wage and salary is that wages are hourly and form the basis of legal minimums, while salaries are annualised and often include an agreement to cover all hours. Your legal minimum is set by the award or the national minimum wage, not by averages or industry norms. Always compare a salary offer to the relevant hourly minimum, and remember that super is paid on top.