The Australian minimum wage is an important part of the job that both employers and employees need to get. It’s the base for fair pay and ensures workers get a living wage for their work.
In Australia, the national minimum wage for full-time adult employees is $24.10 per hour or $915.90 per week as of 1 July 2024.
Let’s dive in.
Setting the National Minimum Wage
During this time, they consider:
- Economic conditions
- Living standards
- Submissions from stakeholders like unions and employer groups
Factors such as inflation, cost of living, and overall economic growth are also considered in determining the current minimum wage.
The decision takes effect from 1st July each year so the minimum wage keeps up with the changing economy.
Minimum Wage Applies to
About 180,200 employees (1.7% of the workforce) are paid the national minimum wage. But the minimum wage affects even more:
- 19% of employees (2 million) are paid minimum award rates which are based on the national minimum
- Pay rates for about 40% of employees are directly or indirectly affected by the annual minimum wage decision
There are also different minimum wages for various types of workers, such as those under a registered training agreement like apprenticeships or traineeships, and young workers under 21.
These minimum wages can be calculated as a percentage of the national minimum wage, with ongoing campaigns advocating for all workers over 18 to receive 100% of the national minimum wage.
So, the minimum wage is a big part of the income of a big chunk of the Australian workforce.
Modern Award Minimum Wages in Awards and Agreements
These awards have classification levels based on:
- Skills
- Experience
- Qualifications
The award minimum wage impacts different types of employees by considering factors such as cost-of-living pressures and forecast wage growth, with recommendations from stakeholders like the Australian Council of Trade Unions, the federal government, and business groups.
Higher classification levels mean higher minimum wages. Some workplaces also have registered agreements that set unique minimum pay and conditions for their employees.
Calculating an Employee’s Minimum Wage
- Use the Fair Work Commission’s tools to find the award for the employee’s industry or occupation.
- Put the employee’s details into the FWC Pay Calculator to get their exact pay rate.
- Consider any other factors that may affect the employee’s pay:
- Penalty rates for working weekends or public holidays
- Loadings for casual work
- Overtime rates
Additionally, note that minimum award wages increase proportionally based on the adult minimum wages, affecting junior, apprentice, and supported wages.
Did you know we have modern award eBooks freely available for download? These guides make it easy to understand what you’re obligated to pay your staff, without the jargon.
Employer Responsibilities and Employee Entitlements
Employers must:
- Keep accurate records of pay
- Give payslips to employees
- Review and update pay rates when the minimum wage increases (usually 1st July each year)
The recent minimum wage increase of 3.75% announced by the Fair Work Commission impacts employer responsibilities by requiring them to adjust their payroll systems and budgets accordingly.
Employees have the right to:
- Be paid at least the minimum wage for all hours worked
- Get minimum wage increases from the first full pay period after 1st July
- Take action if their employer doesn’t pay the correct minimum wage
Employers can’t take adverse action against an employee for asking about or trying to enforce their minimum wage.
Summary
- The national minimum wage is $24.10 per hour or $915.90 per week as of 1st July 2024.
- The recent national minimum wage increase has significant implications for the workforce, affecting both employees and employers.
- Most employees are covered by award minimum wages which are higher and based on their industry, occupation and skills.
- Employers must pay at least the relevant minimum wage to comply with the Fair Work Act.
- The Fair Work Commission reviews and updates minimum wages annually, usually 1st of July each year.
Frequently Asked Questions about
Minimum Wage in Australia
What is the current national minimum wage in Australia?
As of 1 July 2023, the national minimum wage in Australia is $24.10 per hour or $915.90 per week for full-time employees. This rate is reviewed and adjusted annually by the Fair Work Commission.
Who is eligible for the national minimum wage?
All employees in Australia who are not covered by an award or registered agreement are entitled to at least the national minimum wage. This includes full-time, part-time, and casual employees.
What is an award wage?
An award wage is a minimum wage rate set by an industry or occupation-specific award. These awards cover most employees in Australia and provide minimum pay rates and conditions based on factors such as skills, experience, and qualifications. Award wages are typically higher than the national minimum wage.
How do I know if I’m being paid the correct minimum wage?
To determine if you’re being paid the correct minimum wage:
- Find out if an award or registered agreement covers you.
- If an award covers you, use the Fair Work Commission’s Pay Calculator to determine your exact pay rate based on your classification level.
- If you’re not covered by an award or agreement, you should be paid at least the national minimum wage.
Can my employer pay me less than the minimum wage if I agree to it?
No, your employer cannot pay you less than the relevant minimum wage, even if you agree to it. Minimum wage rates are legally enforceable, and it is illegal for employers to pay less than the minimum wage.
What should I do if my employer is not paying me the correct minimum wage?
If your employer is not paying you the correct minimum wage, you should:
- Discuss the issue with your employer and try to resolve it directly.
- If you cannot resolve the issue with your employer, contact the Fair Work Ombudsman for assistance.
- Keep records of your hours worked and pay received.
- Consider making a formal complaint to the Fair Work Ombudsman if your employer continues to underpay you.
How often do minimum wages change in Australia?
Minimum wages in Australia are reviewed annually by the Fair Work Commission. Any changes to the national minimum wage or award wages usually take effect from 1 July each year.
Are there any exceptions to the minimum wage laws in Australia?
There are some limited exceptions to the minimum wage laws in Australia, such as:
- Junior employees (under 21 years old) may be paid a lower percentage of the relevant adult minimum wage based on their age.
- Employees with disabilities that affect their productive capacity may be paid a supported wage, which is a percentage of the relevant minimum wage based on their assessed capacity.
- Some registered agreements may include provisions for lower pay rates in exchange for other benefits, but these rates must still be above the relevant minimum wage.
What are the penalties for employers who fail to pay the correct minimum wage?
Employers who fail to pay their employees the correct minimum wage may face penalties under the Fair Work Act. These penalties can include:
- Back payment of unpaid wages to affected employees
- Fines of up to $66,600 per contravention for corporations and $13,320 per contravention for individuals
- Legal action by the Fair Work Ombudsman or affected employees
- Damage to the employer’s reputation and potential loss of business