Does award coverage affect whether I am paid a salary or wages?

Yes. If you are covered by a modern award, the award will specify minimum hourly rates (wages) or annual salaries for certain classifications. Some awards allow annualised salary arrangements, but the salary must still be enough to cover the award entitlements including penalty rates and overtime.

How do I know if I am award-free and subject to the national minimum wage?

You are award-free if no modern award covers your industry or occupation and you are not covered by an enterprise agreement. The Fair Work Ombudsman's Pay and Conditions Tool can help you check. If award-free, the national minimum wage applies, but juniors, apprentices, and trainees may receive lower rates.

What is the difference between salary and wages? Award coverage vs award-free rates

Q: What is the difference between salary and wages?

Salary is typically expressed as an annual figure and paid in equal instalments regardless of hours worked, while wages are calculated on an hourly or weekly basis. Both must meet minimum legal requirements, but salary employees may be covered by an award or agreement that sets a minimum annual rate.

The national minimum wage is $26.44 per hour or $1,004.90 per week from 1 July 2026, but most employees are covered by an award or agreement that sets higher rates.

What is the difference between salary and wages?

Understanding what is the difference between salary and wages is essential for knowing your minimum pay rights in Australia. A salary is usually a fixed annual amount paid in regular instalments, while wages are paid per hour or per week. The legal minimum that applies to you depends on whether you are covered by a modern award, an enterprise agreement, or are award-free.

Legal minimum vs award rates vs negotiated salary

The legal minimum is the national minimum wage set by the Fair Work Commission. From 1 July 2026, it is $26.44 per hour or $1,004.90 per week for adult award-free employees. However, most employees are covered by a modern award, which sets higher minimum rates for specific industries and occupations. The Fair Work Ombudsman explains that award rates increased by 4.75% from 1 July 2026, with the lowest ongoing classification at least $26.44 per hour.

A negotiated salary can be higher than the award or minimum, but it cannot be lower. If your salary is expressed annually, it must still meet the relevant hourly or weekly minimum when divided by ordinary hours. Superannuation is paid on top of your salary or wages at 12% of ordinary time earnings from 1 July 2026.

Award coverage vs award-free

If you are covered by a modern award, the award's minimum rates apply instead of the national minimum wage. Awards often have multiple classification levels with different pay rates. For example, the Children's Services Award and Pharmacy Award have specific rates updated each year. If you are award-free and not under an enterprise agreement, the national minimum wage is your floor. But even then, juniors (under 21), apprentices, trainees, and employees with a disability may receive lower special rates.

Survey averages vs your pay

The Australian Bureau of Statistics reports that full-time adult ordinary-time earnings averaged $2,083.70 per week in May 2026. This is a survey average, not a minimum. Your pay may be above or below that figure depending on your role, experience, and award. The national minimum wage is about half that average, highlighting the gap between the legal floor and typical earnings.

How to check your minimum

Use the Which minimum wage applies guide to determine if you are award-covered or award-free. The Rate tables show current national minimum and special rates. Remember that an enterprise agreement can set higher rates than the award. Always check your pay against the correct instrument.

Superannuation on top

When discussing salary or wages, remember that super is an employer payment on top. From 1 July 2026, employers must pay super at the same time as wages (payday super). The super guarantee is 12% of ordinary time earnings, so a $26.44 hourly wage attracts an additional $3.17 in super.

Exceptions to the adult rate

Not every worker receives $26.44 per hour. Award-free juniors have percentage-based rates: under 16 get 36.8% ($9.73/h), 16-year-olds get 47.3% ($12.51/h), and so on up to 20-year-olds at 97.7% ($25.84/h). Apprentices and trainees follow the Miscellaneous Award rates. Introductory award rates for the first six months can be as low as $25.74 per hour, provided they do not fall below that floor.

For more detail on how the figures are calculated, see How the figures work. If you need a broader overview of pay topics, visit Topics.

This guide provides orientation only. It is not a pay determination or legal advice. Always consult the Fair Work Ombudsman or a workplace relations professional for your specific situation.