Salary package vs minimum wage: which Australian pay floor applies?

Understanding the salary package and the legal minimum

When Australians talk about a salary package, they often refer to the total remuneration an employer offers: base salary, superannuation, bonuses, and sometimes non-cash benefits like a car or health insurance. But the legal pay floor – the minimum an employer can pay – is based on the base salary alone, before any extras. This distinction is a common source of confusion.

The Fair Work Ombudsman explains that the minimum wage is the amount of pay before tax is taken out (gross pay). Superannuation is an employer contribution on top of that. From 1 July 2026, the super guarantee rate is 12% of ordinary time earnings, and new payday super rules require employers to pay it at the same time as wages.

The national minimum wage and award rates

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 (adult award‑free employees). This is the base rate. Casual employees receive a 25% loading, making the casual minimum $33.05 per hour.

Most employees, however, are covered by a modern award. The Fair Work Ombudsman notes that awards set minimum pay rates for specific industries or occupations, and these rates are often higher than the national minimum. From the first full pay period on or after 1 July 2026, minimum award wages increased by 4.75%, but with two important backstops:

• The lowest ongoing classification in any award cannot fall below the national minimum ($26.44/h or $1,004.90/week).
• Any introductory rate that applies only for the first six months of employment cannot fall below $25.74/h or $978.10/week.

If you are covered by an enterprise agreement, the base pay rate in that agreement cannot be less than the base rate in the relevant award. Always check your award or agreement first – it sets your legal minimum, not the national minimum wage.

Some employees can be paid less than the adult national minimum. For award‑free juniors (under 21), percentages apply – for example, a 16‑year‑old gets 47.3% of the adult rate ($12.51/h). Apprentices and trainees have their own special rates under the Miscellaneous Award. Employees with a disability that affects productivity may also have a supported wage. The Fair Work Commission publishes the full National Minimum Wage Order each year.

How a salary package compares

A salary package that includes super and bonuses can be significantly higher than the base minimum. For example, an employer offering a $70,000 package might break it down as roughly $62,500 base salary plus $7,500 super (12%). The base salary must still meet the relevant minimum. The Australian Bureau of Statistics (ABS) reported that in May 2026, full‑time adult ordinary‑time earnings averaged $2,083.70 per week – well above the national minimum. But averages include many workers on award or agreement rates above the floor.

When negotiating a salary, remember that the package figure is not the same as the minimum wage. The minimum is the safety net; your package can (and should) be higher based on your skills, experience, and the market.

Common confusions

People often mix up three things: the legal minimum (set by the Fair Work Commission), the award rate for their job, and the total salary package they see in a job advertisement. The package may include super, but the minimum wage does not. Another confusion is assuming the national minimum applies to everyone – but if you are covered by an award or agreement, that document sets your floor. Finally, some think the minimum wage is a living wage; it is a legal floor, not a measure of adequate income.

For more detail on which pay floor applies to you, see our Which minimum wage applies guide. You can also check Rate tables for current junior, apprentice, and award rates.

FAQs

What is typically included in a salary package? A salary package usually includes the base salary plus employer superannuation contributions (12% from 1 July 2026), and may also include bonuses, car allowances, or other non-cash benefits. The legal minimum wage refers only to the base pay before super and other extras.

Does the national minimum wage include superannuation? No. The national minimum wage is the base rate of pay before tax. Superannuation is an additional payment the employer must make on top of ordinary time earnings. For award-free employees, the casual loading (25%) is also separate from super.

Can my salary package be less than the minimum wage? No. The base salary component of your package cannot be less than the applicable minimum wage (national minimum wage, award rate, or enterprise agreement rate). However, if your package includes super and other benefits, those are on top of the minimum base rate.

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