As a business owner in Australia, it’s essential to be familiar with the minimum wage or awards that apply to your staff. Not only do you want to be paying your staff fairly, you want to ensure you aren’t breaking any laws. So, what actually is the national minimum wage and where does it currently sit in Australia?
Set by the Fair Work Commision, the minimum wage is the lowest amount that someone can legally be paid to work a job. This figure is reviewed annually by a panel from the Commission and is set to protect workers from receiving unfair pay.
While the minimum wage set by the Commission does relate to the whole of Australia, there are a few exceptions where a wage paid can be below the minimum and this depends on:
- The type of employment (apprentices & trainees)
- If the employee is under 21 years (junior workers)
- The employee’s capacity to work (if they have a disability)
From July 1 this year (2023), the Fair Work Commission actioned a 5.75% increase of the national minimum wage. This means that the minimum wage in 2023 across Australia currently sits at $23.23 per hour or $882.80 per 38 hour week (pre-tax). See more on the 2023 minimum wage increase.
Minimum Wage Rates In The Last 5 Years
Even in the last 5 years, the minimum wage in Australia has shifted considerably. Employees on the national minimum wage are now taking home almost $150 more per week than they were in 2019. The table below shows a snapshot of the national minimum wage in Australia for the last 5 years:
|
Year
|
Per Hour
|
Per 38 hr Week
|
|---|---|---|
|
2019
|
$19.49
|
$740.80
|
|
2020
|
$19.84
|
$753.80
|
|
2021
|
$20.33
|
$772.60
|
|
2022
|
$21.38
|
$812.60
|
|
2023
|
$23.23
|
$882.80
|
Minimum Award Rate Increase
Awards or modern awards are legal documents that outline minimum pay rates and conditions of employment, typically relating to specific industries and occupations. Awards apply to employers and employees depending on the industry they work in and the kind of work they do. With over 100 industry or occupation awards currently in existence, it means that most people who work in Australia are covered by an award.
On July 1 2023, the Commission also increased award minimum wages by 5.75%. Typically Awards are higher than the national minimum wage, however, following the increase this year, some minimum award wages are now less than the national. This generally only occurs in situations where the award contains an introductory pay rate that will soon increase in line with the employee’s progress. In these cases, the national minimum wage does not apply and the award wage should be paid.
Visit the Fair Work website for a deeper dive into modern awards or to explore a full list of employee awards.
Minimum Wage For Apprentices & Trainees
Employees with a formal training contract with their work (apprentices & trainees) have special pay rates and conditions associated with their role. The employee can only be paid these rates if they are completing training with a recognised and registered training authority, such as a TAFE.
There are two ways that an apprentice can move up the apprenticeship ladder, depending on the specific award they are on:
- After they’ve been working for a certain amount of time EG 12 or 24 months;
- After they’ve achieved a set amount of set skill or training requirements.
Minimum Wage For Juniors
An employee is classified as a junior if they are under 21 years of age. Juniors get paid a percentage of the relevant adult pay rate unless the award doesn’t have specific junior rates, in which case they get paid the same as their adult (21 + y/o) colleagues. This percentage varies in industry to industry but different to trainees and apprentices, will typically increase annually on the employee’s birthday.
The lower wage generally gives juniors a one-up on their older colleagues as it is more affordable for businesses to give them work as opposed to the older, higher-earning staff members.
Calculate Minimum Pay Rates
If you are wanting to calculate minimum pay rates, the Fair Work Commission has a great tool that can be used by employers and employees to find current pay rates. The Commission’s Fair Work Pay Calculator calculates base pay rates, allowances, and penalty rates.
Superannuation Obligations For Employers
Under the superannuation guarantee, employers are required to pay super contributions of 11% of an employee’s ordinary time earnings to their nominated superannuation account. Important to note here is that superannuation is not included in the Australian minimum wage so this 11% is paid in addition to the minimum wage. Employers are legally required to pay superannuation for any staff over 18 years of age and any under 18 years that work 30+ hours a week. This rule applies to both full time and part time employees, and in some cases, extends to casual workers.
For more information on superannuation obligations, visit the Australian Government Business dedicated Superannuation page or contact the Australian Tax Office on 13 28 61.
*Please note, this blog does not contain any legal or financial advice. For any important financial advice or guidance, we recommend consulting a qualified professional or the ATO.
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