Tax on 120k Salary Australia: How It Compares to Minimum Wage and Award Rates

Tax on 120k Salary Australia: How It Compares to Minimum Wage and Award Rates

If you’re wondering about the tax on a $120,000 salary in Australia for the 2026-27 income year, you’re likely comparing your pay to the legal minimum or industry averages. This guide breaks down how that salary stacks up against the national minimum wage, award rates, and average earnings, and explains the tax you can expect to pay.

National Minimum Wage vs. $120,000 Salary

The Fair Work Commission sets the national minimum wage each year. From 1 July 2026, the rate is $26.44 per hour or $1,004.90 per week for a 38-hour week . A $120,000 annual salary works out to roughly $2,307.69 per week (before tax), which is more than double the minimum. However, the national minimum wage applies only to award-free and agreement-free employees. Most workers are covered by a modern award or enterprise agreement, which can set higher minimum rates.

Award Rates and the 4.75% Increase

From the first full pay period on or after 1 July 2026, modern award minimum wages increased by 4.75% . The lowest ongoing classification in any award cannot fall below the national minimum of $26.44 per hour. Introductory rates (for the first six months) cannot be less than $25.74 per hour or $978.10 per week. A $120,000 salary is well above these award floors, so if you earn that amount, you are likely paid above the award rate for your classification.

Tax on $120,000 Salary in 2026-27

The Australian Taxation Office publishes resident tax rates for each income year. For 2026-27, the rates are :

• $0 – $18,200: Nil
• $18,201 – $45,000: 15c for each $1 over $18,200
• $45,001 – $135,000: $4,020 plus 30c for each $1 over $45,000
• $135,001 – $190,000: $31,020 plus 37c for each $1 over $135,000
• $190,001 and over: $51,370 plus 45c for each $1 over $190,000

On a taxable income of $120,000, the tax is $4,020 (on the first $45,000) plus 30% of the remaining $75,000 ($22,500), totalling $26,520. Add the Medicare levy of 2% ($2,400) for a total of $28,920. This leaves an after-tax income of about $91,080. This simplified calculation does not include the low income tax offset, HELP repayments, or the Medicare levy surcharge (which applies if you earn above $93,000 for singles without private hospital cover).

How $120,000 Compares to Average Earnings

The Australian Bureau of Statistics (ABS) reported that in May 2026, full-time adult ordinary-time earnings averaged $2,083.70 per week (about $108,352 annually). All employees average total earnings were $1,579.20 per week (about $82,118 annually). A $120,000 salary is above the full-time average, meaning it sits in the upper half of the earnings distribution.

Casual Loading and Junior Rates

If you are a casual employee, you are entitled to a 25% loading on the national minimum wage, making the casual rate $33.05 per hour. However, a $120,000 salary is typically for permanent full-time roles. Junior employees (under 21) who are award-free receive a percentage of the adult minimum wage based on age. For example, a 19-year-old gets 82.5% ($21.82 per hour). A $120,000 salary far exceeds these junior rates.

Superannuation on Top

Employers must pay the super guarantee of 12% on top of ordinary time earnings. So if your base salary is $120,000, your employer contributes an additional $14,400 to your super fund, making the total employment cost $134,400. Always check whether a quoted salary is inclusive or exclusive of super.

High Income Threshold and Award Coverage

The high income threshold for 2026-27 is $190,100 . Since $120,000 is below this threshold, you remain protected by the unfair dismissal provisions and your award or agreement still applies. If your salary exceeds the threshold, you may lose some award protections unless a modern award specifically covers you.

For more details on which pay floor applies to you, see our Which minimum wage applies guide. You can also explore Rate tables for specific award classifications.

Summary

A $120,000 salary in Australia is well above the national minimum wage and the average full-time earnings. The tax on that income for 2026-27 is approximately $28,920 (including Medicare), leaving about $91,080 net. Your actual take-home pay may differ based on offsets, deductions, and other factors. Always refer to official sources like the ATO, Fair Work Ombudsman, and Fair Work Commission for the most accurate and current information.

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