The working conditions in Australia are obviously different from Europe. However, the main concern for future travellers or immigrants to Australia are the wages. We all know, the cost of living in Australia is quite high, but overall we earn a better wage there. Then it is important to note that there is a national minimum wage in Australia, but also minimum wages by profession. Here is everything you need to know about wages in Australia.
The minimum wage in Australia
Each industry is subject to a type of collective agreement, which is referred to as an award. It is this award that defines the minimum remuneration rate according to the level of qualification in each sector.
If the company does not belong to an award, the national minimum wage applies. $21.38 per hour (or £12.2/h since July 1, 2022). In the UK the minimum wage is £8.72/h, which corresponds to a difference of 15%.
Each year, the Fair Work Commission reviews both the national minimum wage and the minimum wage rates under the awards. It is an annual salary review. Most of the changes begin at the end of the Australian tax year, i.e. from July 1 each year.
For information, the Fair Work is here to help employees and employers maintain healthy relationships in a fair and productive wage environment. It is an independent body that operates under the Fair Work Act 2009.
NB: If you are a pieceworker in the agriculture industry, know that since 28 April 2022, workers paid a piece rate will be guaranteed a minimum hourly wage. This change applies to full-time, part-time employees and casuals. Under the Horticulture Award, the piece rate must allow a pieceworker to earn at least 15% more than the minimum hourly rate for the pieceworker’s classification level. As an example, a full-time/part-time employee must earn at least $23.38 per hour. For a casual worker, the minimum is $29.22 per hour.
The average wage in Australia
According to the Australian Bureau of Statistics, the average weekly salary for an Australian is AUD $1,737 (2022). Public sector workers are paid more than private-sector workers, and there are also wage differentials between men and women in Australia.
The average wage in Australia can vary depending on the economic activity in the various States. In the Australian capital state (ACT), you earn the best living, and in Tasmania the wages are the lowest. Here, the average salary per week for each:
The Payslip
In Australia, every company is obliged, whether large or small, to keep a register of the payroll of its employees. This ensures that you receive your wages and associated rights in Australia. These payslips may be available in electronic form or on paper.
The Australian payroll is much easier to read and understand than other payrolls:
- the name of the employer (+ his business number) and the employee
- the payroll period
- the billing date
- Gross and net wages
- if the employee is paid by the hour:
- the regular hourly rate
- the number of working hours at this Rate
- the total amount of compensation in dollars at this rate
- Increases, Allowances, Bonuses
- Pension contributions (Superannuation):
- Amount and details of the Fund for which contributions have been paid
As an employee, you have the right to request your payslip. Your employer is against the law if he doesn’t give you a statement. He must give it to you at the latest one working day after the payday, even if you are on holidays.
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How is your wage paid?
In Australia, wages can be paid in cash, by check, by money order to the employee, or mostly by bank transfer. It is the award to which the company belongs that defines the payment rules (frequency, minimum wage, etc.).
The employee must be paid at least once a month. In Australia, however, it is common to receive weekly or fortnightly wages.
Be aware that as an employee you should receive money for your work. You cannot be paid “in-kind” (for example with food). However, if your employer offers you benefits in-kind, this should not replace your salary. It can be an addition to your financial compensation.
Also, note that you have to be paid a wage for the time spent:
- In training
- during team meetings
- to open and close the business
- to do trials, especially if you are asked to do several
Allowances and wage increase
In each industry, wage increases and allowances may be granted to you. The rules are defined by the Award to which the company belongs.
With the FairWork website, you can estimate the minimum wage that you should receive in your industry.
For example, if you have an employment contract for a casual job, your hourly rate of pay will be increased compared to a full-time or part-time job. Your wage will be higher to compensate for the fact that your job is not fixed and that you have no holidays.
Beyond that, you will benefit from a wage increase (penalty rate) when you work:
- On the weekend
- Public Holidays
- During overtime
- On late-night shifts
- Or, if you work early in the morning.
You can also receive allowances, additional payments if you are an employee who:
- Performs specific tasks or has a certain ability
- Use your own tools/ work materials
- working under unpleasant or hazardous conditions
This compensation can also include benefits in kind such as:
- Uniforms and special clothing
- Tools and equipment
- Travel and preferential prices
- Car and phone
- First aid Course
Freelance Compensation
Freelance, by definition, is independent. He, therefore, does not receive a salary from an employer because he is his own employer. On the other hand, he has clients who pay him for a service rendered. This is how he gets paid. Most of the time, he is paid by the task or by the time spent.
If we look at the hourly rate of a freelancer, it will be much higher than the hourly rate of an employee for the same job. Indeed, the remuneration of a freelancer corresponds to a gross salary. The freelancer will have to deduct from the sum received by the client, a share for taxes, superannuation, his operating costs (rent, insurance, internet, telephone, computer …), his holidays and the time spent managing his activity (administrative, commercial, etc.).
If you want to embark on a freelance activity, you will need to take into account the sum of these costs to calculate the turnover you are targeting, and thus calculate your rates.
Note
If you want to work as a freelancer in Australia, you must have an ABN (Australian Business Number) and open a bank account. And just like an employee, you need a TFN for your income tax.
Taxes
In Australia, income taxes are withheld at the source. If you are employed, the wage paid to you is already taxed. In fact, it is your employer who pays taxes on your salary directly to the state. To do this, you must submit your tax number, the TFN (Tax File Number). You should request this number from Australian Tax Services (ATO) when you arrive in Australia.
In Australia, the tax rate on your wage depends on your tax status and your annual salary class. There are 3 main tax classes:
Tax rates for Residents
You are considered a tax resident as soon as you have your main residence or if you live in the country for more than 6 months a year at the same address.
Residents – Tax rates 2021-2022
| Taxable income | Tax on this income |
|---|---|
| 0$ – 18,000 | nil |
| $18,201 – $45,000 | 19c for each $1 over $18,200 |
| $45,001 – $120,000 | $5,092 plus 32.5c for each $1 over $45,000 |
| $120,001 – $180,000 | $29,467 plus 37c for each $1 over $120,000 |
| $180,001 and over | $51,667 plus 45c for each $1 over $180,000 |
Tax rates for Foreign residents
If you don’t work enough in Australia to qualify as a tax resident, the tax rate on your Australian wage will be higher than for a tax resident.
Foreign resident – Tax rates 2021–22
| Taxable income | Tax on this income |
|---|---|
| 0$ – 120,000 | 32.5 cents for each $1 |
| $120,001 – $180,000 | $39,000 plus 37 cents for each $1 over $120,000 |
| $180,001 and over | $61,200 plus 45 cents for each $1 over $180,000 |
Tax rates for WHV makers (non NDA countries)
Based on your visa, the Australian government believes that you do not intend to stay in Australia. Your wage will then be taxed more compared to a tax resident. Since January 2017 Visas 417 and 462 are taxed 15% for the first $45 000 of their income. Over this amount, they are taxed 32.5% as any Australian.
Companies must register as employers of working holiday makers by completing a specific form. Make sure that your employer is registering you as a working holiday visa maker otherwise you will be taxed 32.5% (foreign resident rate).
Working holiday maker incomes regardless of residency for tax purposes – Tax rates 2021-2022
| Taxable income | Tax on this income |
|---|---|
| 0 – $45,000 | 15% |
| $45,001 – $120,000 | $6,750 plus 32.5 cents for each $1 over $45,000 |
| $120,001 – $180,000 | $31,125 plus 37 cents for each $1 over $120,000 |
| $180,001 and over | $53,325 plus 45 cents for each $1 over $180,000 |
Specific rate for WHM makers from NDA country
The backpacker tax (15%) has been contested and in Addy v Commissioner of Taxation [2021] HCA 34, the High Court has found that the ‘backpacker tax’ is not in accordance with Australia’s treaty obligations with the United Kingdom, violating the non-discrimination article (Article 25(1) of the UK DTA).
So if you are considered an Australian resident for tax purposes and from an NDA country, you may be eligible to be taxed on the same basis as a resident Australian national.
Here is the list of countries concerned:
- Chile,
- Finland,
- Japan,
- Norway,
- Turkey,
- the UK,
- Germany
- Israel.
Read also : Backpackers Tax Rates in Australia
The superannuation pension system
The pension (or “super”) corresponds to an old-age pension. It is a mandatory system to invest at least 10,5% of your wage (since July 2022) in a fund to meet your retired financial needs. Your employer pays your superannuation into a special account. The superannuation is, therefore, an indirect salary, it is part of your total remuneration and is added to the salary paid to you. The mandatory superannuation share is expected to increase to 12% by 2028.
During a recruitment proposal, your employer may have to indicate that you will receive a wage + superannuation + bonus (if applicable).
You will get back the amount paid into your superannuation account when you retire or when you leave the country if you have a temporary visa. If you leave Australia, you will be taxed 65% of the amount you withdraw from your Australian superannuation account. So don’t be surprised!
Tax declaration
At the end of the financial year (July 1st to June 30th) you have to report your income. This declaration is called a tax return. Keep all payslips to make your statement. You can get back part of the taxes paid by your employer!
For example, you can reclaim the healthcare contribution Tax (Medicare Levy) if you are not covered by Medicare.
You can also claim deductions when filing your tax return. For example, if you had to take a training course, buy equipment for your job, etc., this could be deducted from your taxes.
Read also : How to claim your Taxback in Australia?
Examples of wages in Australia
Backpacker jobs
Most backpacker jobs are paid at between $22 and $25 an hour, and even more on weekends and holidays. The salary depends heavily on the employer and your contractual and geographical situation. In any case, make sure that you get the minimum wage for your award.
Backpacker Jobs and Salaries
What jobs can you get in Australia and for what salary? To give you authentic information, we asked other backpackers.
Qualified jobs
Here are some examples of salary ranges by job type. Salaries vary widely based on experience and geographic location in Australia. If you are looking for work, find out about the wages offered in the state you are targeting in Australia.
| Profession | Annual Salary |
|---|---|
| Teacher | $70,000 - $110,000 |
| Early childhood teacher | $60,000 - $90,000 |
| Nurse | $45,000 – $70,000 |
| Sales Manager | $55,000 – $80,000 |
| Marketing coordinator | $55,000 – $75,000 |
| Graphic designer | $65,000 - $90,000 |
| Web designer | $80,000 - $110,000 |
| Data scientist | $115,000 – $150,000 |
| Business Analyst | $85,000 – $120,000 |
| IT Project Manager | $100,000 – $150,000 |
| Junior Architect | $50,000$ – $80,000 |
| Construction project Manager | $90,000 - $130,000 |
| Environmental engineer | $65,000 – $150,000 |
| Civil engineer | $60,000 - $140,000 |
| Real estate agent | $50,000 - $90,000 |
| Production Manager | $75,000 - $130,000 |
The best paid jobs in Australia
Among the highest-paid Australian employees are those working in the mining industry. The average annual income varies from $100,000 to $160,000 for an engineer, up to $230,000 for a manager.
Paradoxically, the renewable energy sector also offers very good salaries with average annual salaries ranging from $100,000 to $180,000 for engineers, up to $200,000 for managers and $300,000 for project managers.
In general, the construction and energy sectors are high-wage sectors with wages of up to $300,000 / $350 000.
The IT industry also pays skilled workers very well, with salaries of up to $200,000 for a manager and $300,000 for a technical director.
Finally, the finance sector can offer very attractive salaries also reaching $300,000 for management positions.
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