This is a quick guide for payroll and HR — the federal baseline pay, how age and awards affect it, and the extra costs employers need to budget for, because underpaying staff attracts penalties. Clear figures, common award rules and a practical checklist so payroll doesn't slip up.
Key figures at a glance
Treat it as a one-page cheat sheet — the figures rely on the base rate published mid-2023 and currently legislated settings that are expected to apply through 2026; check official sources before you finalise payroll.
- National Minimum Wage (adult, latest published 1 July 2023): $23.23 per hour
- Full‑time ordinary week: 38 hours
- Weekly equivalent (38 h): $882.80 per week (1 July 2023 rate)
- Annual equivalent (38 h x 52): ≈ $45,910 per year
- Casual loading (typical across many awards): 25% extra on the base hourly rate
- Common penalty ranges: weekend penalties ≈ 150% of base, public holiday ≈ 250% of base (award‑dependent)
- Overtime typical starting point: 150% for first hour(s)
- Number of modern awards covering industries: about 122
- Superannuation Guarantee (legislated): 12.0% of ordinary time earnings (from 1 July 2025)
- National Employment Standards ordinary hours cap: 38 hours per week for full‑time employees
- Annual minimum wage review: Fair Work Commission decisions announced each June, take effect 1 July
Detailed breakdown — who gets what and why
Australia doesn't operate a single age‑tiered national wage like some countries; pay is usually set by awards or agreements instead. If an employee isn't covered by a modern award or enterprise agreement, the national minimum functions as the fallback adult rate — that's how the system is meant to operate. For most workers, pay is set by the relevant modern award or an enterprise agreement, and those instruments set the detailed rates by classification, age or training level.
Adult minimum (baseline)
As published on 1 July 2023 the national adult minimum wage is $23.23 per hour — equivalent to $882.80 per week for a 38‑hour full‑time employee, or about $45,910 a year. That adult baseline is reviewed annually by the Fair Work Commission, with decisions announced in late June and usually taking effect on 1 July.
Junior rates and apprentices
There is no single national age‑tier for minimum pay. Instead:
- Modern awards commonly include junior rates expressed as a percentage of the adult/award rate. Percentages vary by award and classification.
- Typical junior percentages in many awards range across age bands — for example, younger teens might be paid a much lower percentage, with incremental increases at 16, 17, 18, 19 and 20 years. These percentages can range from around 40% up to 100% for older juniors — but exact figures are award‑specific.
- Apprentices and trainees are usually paid separate apprentice rates that vary by year of apprenticeship and by award or agreement.
Casuals vs permanent employees
Casual employees often receive a casual loading instead of paid leave. A common loading across many awards is 25%, so a casual earning the adult base would get $23.23 x 1.25 = $29.04 per hour (based on the 1 July 2023 base).
But many awards specify lower or higher loadings or set different casual rates by classification.
Penalties and overtime
Penalties and overtime are award‑driven. Common examples across awards:
- Weekend penalty (Saturday/Sunday): often around 150% of the base rate
- Public holiday penalty: commonly around 250% (time plus penalty)
- Overtime: often starts at 150% and may rise to 200% for extended hours
Those figures are typical ranges; check the relevant award or agreement for the exact multipliers because that's what determines actual pay.
What employers must pay on top of hourly rates
Don't forget statutory extras on top of wages — superannuation, workers' comp, payroll tax and leave entitlements can materially change total labour costs.
- Superannuation Guarantee (SG): 12.0% of ordinary time earnings (legislated and in force from 1 July 2025). That means on a weekly wage of $882.80 employers owe about $105.94 in SG per week.
- Workers' compensation insurance: variable by state and by industry risk — premiums often range from under 1% to over 5% of payroll depending on the business.
- Payroll tax: state/territory thresholds differ — most firms under the payroll tax threshold pay nothing, larger payrolls pay a percentage (typical rates 4%–6% above thresholds).
- Paid leave entitlements for permanent employees: annual leave (4 weeks a year for many employees), personal/carer's leave, and long service leave as set by state legislation or awards.
- WorkCover and other local obligations: varies by state.
How to apply and check the correct rate
Follow these payroll steps to avoid mistakes: identify the award or agreement, apply the correct classification, add required loadings and penalties, and document everything.
- Identify whether the employee is covered by a modern award or enterprise agreement — about 122 awards exist across industries.
- If no award or agreement applies, the National Minimum Wage (adult rate) is the fallback: $23.23/hr (1 July 2023).
- Check the specific award classification for junior percentages, apprenticeship rates, penalty multipliers and casual loadings.
- Apply superannuation at 12.0% on ordinary time earnings for employer liability calculations (from 1 July 2025 onward).
- Use Single Touch Payroll reporting and keep detailed pay records and payslips — STP has been mandatory for most employers since 2019.
- Run annual audits: compare payslips against award tables and correct underpayments promptly — voluntary rectification usually reduces penalties.
Practical tips for employers (payroll checklist)
- Look up the employee's award first — it lists the classification, base rate, junior percentages and any penalty or overtime rates you must apply.
- Include casual loading when calculating hourly casual pay — common loading 25% makes a big difference.
- Remember ordinary hours for full‑time are generally 38 per week unless the award says otherwise.
- Budget for super at 12% — include that in total labour cost forecasts.
- Keep payslips that show base rate, hours, loadings, penalties, super and all deductions. Payslips must be given to the employee.
- If unsure, seek an independent workplace relations adviser or contact the Fair Work Ombudsman — mispaying awards is a common cause of big compliance bills.
Regional differences across Australia
Rates in dollars are federal, but real cost to employers varies by state because of payroll tax, workers' compensation and local industrial instruments.
- Payroll tax: NSW, VIC and QLD have different thresholds and marginal rates (typical payroll tax rates roughly 4%–6% once above the state threshold).
- Workers' compensation premiums vary sharply — high‑risk industries in some states can see premiums above 4% of payroll, while low‑risk industries may pay under 1%.
- Modern awards apply nationally, but long service leave rules differ by state — factoring into long‑term labour cost.
- Regional labour markets affect negotiations — in tight markets employers often pay above award to attract staff; in high‑unemployment areas awards set the floor.
Forecast to 2026 — what to plan for
Expect upward pressure on the national minimum wage through the annual Fair Work Commission reviews. If trend increases of recent years continue, a reasonable planning range for the adult baseline in mid‑2026 would be between 3% and 6% higher than the last published adult rate — operators should budget accordingly.
Practical numbers to plan on (scenario planning):
- If the adult rate rises 3% from the 1 July 2023 base: $23.23 x 1.03 ≈ $23.93/hr
- If it rises 5%: $23.23 x 1.05 ≈ $24.39/hr
- With a 25% casual loading that becomes ≈ $29.92–$30.49/hr for casuals depending on the uplift band.
- Maintain super budgeting at 12% of ordinary time earnings — a 5% wage rise plus 12% super increases total labour cost by more than wage growth alone.
These are planning scenarios — final 2026 figures will come from the Fair Work Commission's June decision and any subsequent government changes to super or tax rules.
Related Articles
The minimum pay story in Australia is award‑driven more than age‑driven. Use the national adult baseline as a safety net, check the modern award for junior and apprentice percentages, add casual loading and penalties where relevant, and budget super at 12% for 2026. Keep payslips and STP records, audit annually, and factor in local payroll tax and workers' comp when calculating total labour cost.
This article was created with AI assistance.
