Minimum Wage In Australia.

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What is the Minimum Wage in Australia?

The national minimum wage increased from the first full pay period on or after 1 July 2021 from $19.84 to $20.33per hour or $753.80 to $772.60 per week for a full-time award-free adult employee.

Fair Work Commission Announces 2.5% Increase To The Minimum Wage

The National Minimum Wage increased by 2.5% per cent to $20.33 per hour, for a full-time award-free adult employee who is not an apprentice or a trainee. In other words, a full-time adult employee will receive a minimum of $ 772.60 per week,

The award wage increases will be rolled out in three stages i.e. from the first full pay period on or after 01 July 2021, 01 September 2021 and 01 November 2021 respectively, depending on the award that applies. This means different employers are affected at different times, depending on their industry and the Modern Awards under which their staff are employed.

The award minimum rate will increase by 2.5% across all award classifications. A classification describes the job the employee is doing under a particular Award. Each classification level has a different minimum pay rate.

The increase can also affect other payments such as penalty rates, overtime, allowances and more.

Minimum Wage Definition

What is the Minimum Wage?

Each year, the Fair Work Commission reviews Award Minimum Wages and sets the National Minimum Wage for award-free employees (which are those employees not covered by an award or an enterprise agreement) in a decision called the National Minimum Wage Order.

The decision impacts businesses and employees that fall under the National Workplace Relations System. These are businesses that are covered by the Fair Work Act 2009 (the Fair Work Act). The Fair Work Act covers most private businesses in Australia.

However, some private businesses are not covered by the Fair Work Act. In Western Australia for example, any business that is not a constitutional corporation – if the business is not a proprietary limited company and is a sole trader, for example – is covered by the Western Australian State System. The Minimum Pay Rate for Businesses with employees that fall under the WA State System is decided by the Western Australian Industrial Relations Commission (WAIRC). 

Call us for free initial advice to help you understand what Workplace Relations System applies to your business.

What is the Minimum Wage Increase?

The Minimum Wage is the lowest amount you can pay an Employee who works for a business that falls under the National Workplace Relations System, so to whom an Award applies that was introduced under the Fair Work Act. These are also known as Modern Awards. The minimum wage can also apply to Businesses who are covered by a Registered Agreement that has been approved by the Fair Work Commission.

From the start of the first full pay period on or after 01 July 2021 the minimum pay rate for full-time adult employees who aren’t covered by a Modern Award (so-called Award-free employees), but are covered by the National Employment System (NES) and the Fair Work Act, is $ 20.33an hour, or $772.60 a week, before tax. This absolute minimum will also apply to employees who fall under an Award.

However, some employees have a different minimum wage depending on their employment type, age or work capacity, for example apprentices or junior employees. In addition, a Modern Award may provide that an employee should get paid more than the minimum pay rate for Award-free employees based on their classification under an Award, and the hours they have worked, and when they worked them. So how the employee is employed, their age, the type of work they do, and when they do it, as well as any experience and qualification they may have, will determine the applicable rate of pay for the actual hours worked under the award.

This award minimum wage can also apply to Businesses who are covered by a registered agreement based on that award, such as an enterprise agreement, that has been approved by the Fair Work Commission.

 An enterprise agreement (EA) or employment contract may also provide a rate of pay that is higher than the national minimum wage or applicable Award rate.

Who Does the Annual Award Wage Increase Apply To?

The annual increase applies to employees who are Award-free but fall under the National Employment Relations System, and so are entitled to the National Minimum Wage, as well as those employees who are covered by a Modern Award or an Enterprise Agreement. The increase for Award -free employees applies from the first full pay period on or after 01 July 2021 this year, however the increases to award minimum rates will be introduced in three stages, depending on the award. These increases will be implemented from the first full pay period on or after 01 July 2021, 01 September 2021 and 01 November 2021 respectively.

The increase doesn’t affect employees who already get paid more than the new minimum wage after the increase has been implemented.

How Much Is The Minimum Wage For Part-time And Casual Employees?

Part-time Employees

Part-time employees have the same minimum entitlements as full-time employees, but on a pro-rata basis according to the hours they work. This means that a part-time employee is entitled to the same minimum rate of pay per hour as a full-time employee for the job that they do but will generally be paid less overall because they work less than full-time hours.

Casual Employees

Casual employees are entitled to a higher rate of pay as they are not entitled to benefits enjoyed by permanent employees, such as paid sick and annual leave.

Casual workers in Australia are entitled to an additional payment made on top of a casual employee’s fixed hourly wage. This payment is called ‘casual loading’. The percentile rate of casual loading is determined by the applicable Modern Award, Enterprise Agreement or other registered agreement. For award-free or agreement-free employees, the rate of casual loading derives from the National Minimum Wage Order.

To calculate a casual pay rate, you must multiply the minimum award rate for the employee’s classification by the percentage of the casual loading rate, as stated in the relevant Modern Award or other registered agreement.

FREE Minimum Wage Guide Download

Learn to survive the minimum wage increase in 2021 with this free guide today!

When Will My Award Increase?

Minimum rates in most awards will increase from the first full pay period on or after 01 July 2021. The General Retail Industry Award 2020 rates will increase from the first full pay period on or after 01 September 2021, and the remainder of the awards will undergo an increase from the first full pay period on or after 01 November 2021 – these are listed below:

  • Air Pilots Award 2020
  • Aircraft Cabin Crew Award 2020
  • Airline Operations – Ground Staff Award 2020
  • Airport Employees Award 2020
  • Alpine Resorts Award 2020
  • Amusement, Events and Recreation Award 2020
  • Dry Cleaning and Laundry Industry Award 2020
  • Fitness Industry Award 2020
  • Hair and Beauty Industry Award 2010
  • Hospitality Industry (General) Award 2020
  • Live Performance Award 2020
  • Mannequins and Models Award 2020
  • Marine Tourism and Charter Vessels Award 2020
  • Nursery Award 2020
  • Racing Clubs Events Award 2020
  • Racing Industry Ground Maintenance Award 2020
  • Registered and Licensed Clubs Award 2020
  • Restaurant Industry Award 2020
  • Sporting Organisations Award 2020
  • Travelling Shows Award 2020
  • Wine Industry Award 2020

Please contact Employsure for free initial advice as to what Awards your Business and Employees may be covered by and applicable rates of pay.

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Frequently Asked Questions

  • What Was The Minimum Wage In Australia In 2020-21?

    The national minimum wage from the first full pay period on or after 01 July 2020 was $19.84 per hour or $753.80 per week for a full-time award-free adult employee. Unlike other years, because of the COVID-19 Pandemic, in 2020 the date the award minimum wage increase came into effect was different depending on the industry

  • Is the National Minimum Wage going up in 2021?

    The Fair Work Commission has announced a 2.5% increase to the national minimum wage for the 2021-22 financial year.

  • What Is The Minimum Salary In Australia?

    It will depend on the job the employee does and the hours that they work. A salary is a fixed, regular payment agreed upon in an employment contract generally for a certain amount of hours worked per week that is usually expressed over the course of year (e.g. $60,000 per annum). A salaried employee is required to receive all the same entitlements as a wage worker under the NES or relevant Modern Award and be paid at least the minimum wage for the job that they do and the hours they work.

  • What Is The Average Pay Rate Per Hour In Australia?

    This is impossible to calculate as in Australia, as employees are paid differently according to what industry they are in, the job that they do, their skills and experience and what workplace relations system they fall under. Employees are paid at least a minimum rate set by the Fair Work Commission based on the applicable award or agreement for the job that they do. If an employee is not covered by an award or agreement then the national or state minimum wage applies (depending on if the business is covered by the Fair Work system or the WA state system), but employers can also pay their employees more than this minimum wage if they choose.

  • Who Decides The Minimum Wages?

    The minimum wage rates are reassessed on an annual basis by a specialist panel within the Fair Work Commission. Employer groups and unions are allowed to make submissions to this panel, and these submissions are taken into account when the minimum wage is decided.

  • Does An Employer Have To Pay The Minimum Wage?

    Yes. As the name suggests, the minimum wage is the minimum that an employee must be paid. This may be outlined in an award, agreement or as set by the Commission. A business owner can always decide to pay higher if they choose.

  • What Happens If An Employee Is Paid Above The Award Wage?

    As an employer, you may choose to pay an employee above the minimum wage outlined by the Commission, award or agreement. However, you will need to watch out for increases to the wage rates and make sure that you are paying above any new rate. It is recommended you review your wages each time there is a change to ensure that you are paying on or above the minimum wage. If your business is not keeping pace with the relevant pay increases, you could risk underpaying your staff.

  • What About Employees Who Are Not Covered Under A Modern Award – What Wages Do They Need To Be Paid?

    If an employee is not covered by an award or agreement that the national or state minimum wage applies (depending on if the business is covered by the Fair Work system or the WA state system).

    As you can see, minimum wage is not one size fits all. As an employer, you need to be incredibly efficient with keeping up-to-date on your staff’s ages and circumstances, you will need to be aware of increases that can affect how much to pay your staff.

  • Do Different States Have Different Minimum Wages?

    Most states fall under the Fair Work Act 2009 and as such, the current national minimum wage is $20.33 per hour. However, in Western Australia if the business is a non-constitutional corporation, the Western Australian system will apply. In those cases the minimum wage is currently $19.66 per hour.

    While all employment in Victoria, ACT and the NT is covered by the national system, please note the above information does not include all state or local government employees. For example, if you are a private entity performing contract work for a state or local government, you would be covered by the national system. For all other states, refer to the Modern Awards or enterprise agreement your employees are under, or contact Employsure, for more information.

  • When was Minimum Wage introduced in Australia?

    As the times have changed, so too has the minimum wage. Here is an overview of the history on the minimum wage in Australia.

  • What Is the Minimum Wage in Western Australia?

    For employers under the Western Australian state relations system, there will be an increase of 1.75% per week to the Minimum Wage and state award pay rates from the first full pay period on or after 01 January 2021. For employers in Western Australian, but under the national workplace relations system, the minimum wage is $19.84 per hour.

  • What Is The Minimum Wage In Victoria?

    Most private employers fall under the national workplace relations system covered by the Fair Work Act 2009 and as such, the current national minimum wage is $20.33 per hour from the first full pay period on or after 01 July 2021,  01 September 2021, or 01 November 2021 depending on the applicable award.

    Please note that state or local government employees may not fall under the national system.

  • Does the Minimum Wage Alter for Employees in Different Age Groups?

    This will depend on the award or agreement the business may fall under. Awards and agreements may stipulate a percentage of the adult wage for anyone who is defined as a junior employee.

    If a business is deemed to be Award Free under both the Fair Work system and the Western Australian State legislation, generally junior rates will apply until the age of 20.  The rates tend to increase in increments and as such the rate for a 16 year old will differ from that of a 17 year old. Once the employee reaches 21 in this circumstance, the full adult minimum wage will apply.

  • Do Employment Categories and Employee Experience Impact Wage Rates?

    Yes it may. Wage rates may differ based on:

    • the award or agreement which applies
    • employment categories or type, i.e.: casual employees or full-time employees
    • employee experience, i.e.: apprentices or trainees, years of experience within an industry
    • employees’ duties, i.e.: supervisor or manager level
    • work hours, i.e.: penalty rates, overtime, and allowances
  • What Is The Minimum Wage For A 15 Year Old?

    This will depend on the award or agreement the business may fall under. Awards and agreements may stipulate a percentage of the adult wage for anyone who is defined as a junior employee.

    If a business is deemed to be Award Free under both the Fair Work system and the Western Australian State legislation, generally junior rates will apply until the age of 20.  The rates tend to increase in increments and as such the rate for a 15 year old will differ from that of a 16 year old. Once the employee reaches 21 in this circumstance, the full adult minimum wage will apply.

  • Does Minimum Wage Change, Based on Industries?

    The national (or state) minimum wage will not change based on industry. However minimum wages are also captured in awards and agreements. These awards and agreements are often aligned to the industry or occupation in which the employee works. As such minimum wages may be impacted by industries.

  • What Are The Minimum Hours For A Part-Time Employee?

    A part-time employee works an average of less than 38 hours per week. The minimum hours for a part-time employee will depend on the applicable award, agreement or employment contract.

  • What Is The Difference Between A Salary And A Wage?

    A wage is a rate of pay commonly affixed to a period of time such as per hour, or per day. A salary is a fixed regular payment agreed upon in an employment contract however is not affixed to the number of hours performed.

  • Are Apprentices Entitled to Minimum Wage?

    Yes. Apprentices are entitled to a minimum rate of pay which will primarily depend on what Apprenticeship they are completing and what Modern Award they fall under. An Apprentice’s age, what level of schooling they have completed, and how long ago they left school, as well what stage of the Apprenticeship they are at will also affect their minimum rate of pay.

    Call Employsure for help on how to determine what minimum rate of pay applies to your apprentice.

  • How Much Do Mature Age Apprentices Get Paid?

    A mature age apprentice is essentially an adult apprentice, so anyone who is 21 years of age or older. An adult apprentice gets a higher minimum pay rate than a junior apprentice and may possibly command an even higher rate of pay if they have worked in the business prior to starting their Apprenticeship.

  • What Is the Minimum Wage In Australia After Tax?

    This will depend on the Employee’s personal circumstances and their tax liability as determined by the Australian Tax Office (ATO). Unfortunately, Employsure is unable to give Financial Advice.

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