TimesheetGuidesSuper and packaging

Hourly to Annual Pay: Use the Best Salary Sacrifice Car Strategy to Lower Your Tax Bill

Assuming a 38-hour week, your annual gross pay is your hourly rate multiplied by 38 times 52, before tax and super.

Understanding the Hourly to Annual Conversion

When you have an hourly rate or a salary offer, converting between the two helps you compare jobs and plan your budget. The standard formula is simple: annual gross pay = hourly rate × hours per week × 52. This article assumes a 38-hour week, which is the full-time benchmark under the Fair Work Act. If your hours differ, adjust accordingly.

For example, at the National Minimum Wage of $26.44 per hour (from 1 July 2026), annual gross pay is $26.44 × 38 × 52 = $52,245.44. The Fair Work Commission sets this minimum, but many awards and enterprise agreements pay more. Always check your award rate or your contract.

Fortnightly and Weekly Pay

If you're paid weekly, your gross weekly pay is hourly rate × hours per week. For a 38-hour week at minimum wage, that's $1,004.90. Fortnightly pay is simply weekly pay × 2, so $2,009.80. Knowing your fortnightly figure helps with budgeting for bills and rent.

Casual Loading

Casual employees receive a 25% loading on top of the base hourly rate. This compensates for not receiving paid sick leave or annual leave. The casual minimum wage is $33.05 per hour ($26.44 × 1.25). When using the timesheet, check the casual loading box to add 25% to your base rate. Do not enter a rate that already includes casual loading.

Superannuation

Super guarantee is 12% of your ordinary earnings, paid on top of your salary by your employer. It is not deducted from your pay. The maximum contribution base is $270,830 per year (2026–27). For example, on a $52,245.44 annual salary, super would be $6,269.45 per year. Super is not included in your take-home pay but is a valuable long-term benefit.

Tax and Medicare Levy

Your annual gross pay is taxed using the 2026–27 resident tax rates:

  • Nil on the first $18,200
  • 15% on income from $18,201 to $45,000
  • 30% on income from $45,001 to $135,000
  • 37% on income from $135,001 to $190,000
  • 45% on income above $190,000

In addition, the Medicare levy is generally 2% of your taxable income. Low-income earners may qualify for a reduction or exemption. For the 2025–26 year, single people with income below $24,276 pay no levy; those between $24,276 and $30,501 pay a reduced rate. These thresholds are used here because the 2026–27 thresholds were not confirmed at the time of calculation.

Example Tax Calculation

For a full-time worker earning $70,000 per year (hourly rate about $35.43):

  • Tax: $18,200 tax-free, then $26,800 at 15% = $4,020, then $25,000 at 30% = $7,500. Total tax = $11,520.
  • Medicare levy: 2% of $70,000 = $1,400 (assuming no reduction).
  • Net tax = $12,920. Take-home pay = $57,080 per year.

The Best Salary Sacrifice Car and Your Take-Home Pay

One way to reduce your taxable income is through salary sacrifice, especially for a car via a novated lease. The best salary sacrifice car arrangement allows you to pay for the vehicle and running costs from your pre-tax salary, lowering your assessable income. This can be particularly beneficial if you're in the 30% or higher tax bracket. For example, if you sacrifice $15,000 per year for a car, your taxable income drops from $70,000 to $55,000, saving you $4,500 in tax (30% of $15,000). However, fringe benefits tax may apply, and you need to consider the car's business use percentage. See our super and packaging topic for more details on salary packaging.

Award Rates and Enterprise Agreements

Many industries have award rates set by the Fair Work Commission that are higher than the National Minimum Wage. For example, a retail employee may have a higher base rate. Always check your specific award or enterprise agreement. The Australian Bureau of Statistics reports average weekly earnings: full-time adult ordinary time was $2,083.70 per week in May 2026. This is an average, not a median for your job. Use pay guides to find award rates.

Disclaimer

Annual pay here is hourly rate × hours per week × 52. It assumes the same rate every week, no unpaid overtime, no penalty rates, no allowances, and no salary sacrifice. Super is estimated at 12% of ordinary earnings only, paid on top, and stops at the $270,830 maximum contribution base. Tax is the 2026–27 resident scale with the full tax-free threshold. Medicare uses the 2025–26 single reduction thresholds because the 2026–27 reduction thresholds were not confirmed here. HELP, the Medicare levy surcharge, and salary packaging are not deducted. This is an estimate, not a determination of your pay or tax. For personalised advice, consult a tax professional.

Further Reading

Open the same rate on the home timesheet. Read the reference tables before treating a figure as your pay.

Try the rate on a timesheet

Adjust the timesheet

Year, gross$52,245.4452 weeks at this rate

Starts at the adult National Minimum Wage. Change the rate if the job pays more.

Level with the adult National Minimum Wage.

Mon$200.947.6 h
Tue$200.947.6 h
Wed$200.947.6 h
Thu$200.947.6 h
Fri$200.947.6 h
One fortnight$2,009.44 gross
  • Take-home
  • Tax
  • Medicare
Super 12%, paid on top$6,269.45 a year
Week
$1,004.72
Fortnight
$2,009.44
Take-home a year
$45,006.90
Tax + Medicare
$7,238.54

$52,245.44 gross a year, $2,009.44 a fortnight.

  • 16 h$21,998
  • 20 h$27,498
  • 24 h$32,997
  • 30 h$41,246
  • 38 h$52,245
  • 40 h$54,995

Resident tax for 2026–27 with the tax-free threshold. Medicare uses the 2025–26 single reduction thresholds. No HELP, no salary sacrifice, no Medicare levy surcharge. Super is 12% of ordinary earnings only, capped at the maximum contribution base.

Questions people ask next

How do I calculate annual salary from my hourly rate?

Multiply your hourly rate by the number of hours you work per week, then multiply by 52. If you work a standard 38-hour week, the formula is: hourly rate × 38 × 52. For example, at the National Minimum Wage of $26.44 per hour, annual gross pay is $26.44 × 38 × 52 = $52,245.44. This assumes you work the same hours every week with no unpaid overtime or penalty rates.

What is casual loading and how does it affect my pay?

Casual loading is an extra 25% paid on top of the base hourly rate to compensate for lack of paid leave and other entitlements. The Fair Work Ombudsman sets this loading. For the National Minimum Wage, the casual rate is $33.05 per hour ($26.44 + 25%). When using our timesheet, check the 'casual loading' box to add 25% to your base rate. Never enter a rate that already includes casual loading.

How does salary sacrifice for a car affect my tax?

Salary sacrificing a car (a novated lease) lets you pay for the vehicle and running costs from your pre-tax income, reducing your taxable income. This can lower the tax you pay, especially if you're in a higher bracket. The Australian Taxation Office sets rules for fringe benefits tax. For the best salary sacrifice car strategy, consider your marginal tax rate and the car's business use. See our super and packaging topic for more details.

Keep going