What is the current national minimum wage?

From the first full pay period on or after 1 July 2026, the national minimum wage is $26.44 per hour or $1,004.90 per week for a 38-hour week. This applies to adult employees not covered by an award or registered agreement. Casual employees receive a 25% loading, making the casual rate $33.05 per hour.

Can my employer pay me less than the award rate if I salary sacrifice through a novated lease?

No. Salary sacrifice arrangements, including novated leases, cannot reduce your pay below the minimum wage or award rate that applies to you. The Fair Work Act 2009 requires that your base rate of pay (before salary sacrifice) must be at least the relevant minimum. A smart salary novated lease calculator can help estimate your net pay, but it does not change your minimum wage entitlement.

How does a novated lease affect my minimum wage entitlement?

A novated lease is a salary sacrifice arrangement where your employer deducts lease payments from your pre-tax salary. While this reduces your taxable income, your base salary must still meet the minimum wage or award rate. The super guarantee (currently 12%) is calculated on your ordinary time earnings before salary sacrifice. Always check your award or agreement to ensure your base pay remains above the legal floor.

Using a smart salary novated lease calculator? Know which minimum wage applies to you

From 1 July 2026, the national minimum wage is $26.44 per hour or $1,004.90 per week for award-free adult employees, but most workers are covered by a modern award with higher rates.

Which minimum wage applies when using a smart salary novated lease calculator?

If you are considering a novated lease through salary sacrifice, you may be using a smart salary novated lease calculator to estimate your take-home pay. However, the most important figure to know first is your minimum wage entitlement. The pay floor that applies to you depends on whether you are covered by a modern award, an enterprise agreement, or are award-free. This guide explains the difference and how it affects your pay.

The national minimum wage for award-free employees

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. This applies to adult employees in the national system who are not covered by any award or registered agreement. Casual employees receive a 25% loading, bringing the casual rate to $33.05 per hour. The Fair Work Ombudsman provides tools to check if you are award-free.

Most employees are covered by a modern award

A modern award sets minimum pay rates, penalty rates, and allowances for a specific industry or occupation. If an award covers you, your minimum wage is the rate in that award, which is almost always higher than the national minimum wage. From 1 July 2026, award minimum wages increased by 4.75%, but the lowest ongoing classification cannot fall below $26.44 per hour or $1,004.90 per week. Some awards have introductory rates for new employees (limited to the first six months) that cannot be less than $25.74 per hour or $978.10 per week.

Award-free junior and apprentice rates

If you are under 21 and award-free, your minimum wage is a percentage of the adult national minimum wage. For example, a 16-year-old receives 47.3% ($12.51 per hour) and a 20-year-old receives 97.7% ($25.84 per hour). Casual loadings apply on top. Apprentices and trainees who are award-free follow rates based on the Miscellaneous Award 2020, not the junior percentages. Always check your specific situation using the Which minimum wage applies guide.

How salary sacrifice interacts with minimum wage

A smart salary novated lease calculator can show you the net effect of salary sacrificing a car lease, but it cannot reduce your minimum wage entitlement. Under the Fair Work Act, your base rate of pay (before any salary sacrifice) must be at least the minimum wage or award rate. Salary sacrifice deductions are taken from your gross pay after the minimum is satisfied. If your base pay drops below the legal minimum due to a salary sacrifice arrangement, your employer is breaking the law. The calculator should only be used after confirming your base pay is above the floor.

Super guarantee is paid on top

When discussing pay, remember that the super guarantee (12% from 1 July 2026) is an employer contribution on top of your ordinary time earnings. It is not deducted from your minimum wage. For award-free employees, super is calculated on the national minimum wage or the award rate, whichever applies. Salary sacrifice arrangements can affect super if they reduce your ordinary time earnings, but your base rate must still meet the minimum.

Comparing the minimum to average earnings

The Australian Bureau of Statistics reported in May 2026 that full-time adult ordinary-time earnings averaged $2,083.70 per week, while all employees (including part-time and casual) averaged $1,579.20 per week. The national minimum wage of $1,004.90 is well below these averages, highlighting that most workers earn above the legal floor. However, knowing your exact minimum is essential before using any salary packaging calculator.

Where to find your correct rate

To determine which minimum applies to you, use the Fair Work Ombudsman’s Pay and Conditions Tool or check your award’s pay guide. If you are covered by an enterprise agreement, the agreement rate applies as long as it is not less than the award rate. For award-free employees, the national minimum wage and special rates for juniors, apprentices, and supported employees apply. See our Rate tables for a full breakdown of current figures.

Summary

Before using a smart salary novated lease calculator, confirm your minimum wage entitlement. If you are award-covered, your rate is likely higher than the national minimum. If you are award-free, the national minimum wage of $26.44 per hour (or the applicable junior/apprentice rate) is your floor. Salary sacrifice cannot reduce your pay below this floor, and super is paid on top. Always check your specific award or agreement for the correct rate.

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