How do I convert my hourly rate to annual pay?

Multiply your hourly rate by the number of hours you work each week, then by 52 weeks. For a standard 38-hour week, annual gross pay = hourly rate × 38 × 52. This assumes the same rate every week with no unpaid overtime or penalty rates. To see how much can you salary sacrifice, start with this annual figure and subtract tax and Medicare, then consider salary packaging options.

What is the difference between the National Minimum Wage and award rates?

The National Minimum Wage from 1 July 2026 is $26.44 per hour, or $1,004.90 per week for 38 hours. Award rates are set by the Fair Work Commission for specific industries and are often higher. Casual employees receive a 25% loading on top of their base rate. Superannuation is paid on top of ordinary earnings at 12%. Understanding your correct award rate is essential before calculating how much can you salary sacrifice.

How does salary sacrifice affect my take-home pay?

Salary sacrifice lets you exchange part of your pre-tax salary for benefits like super contributions or a car. This reduces your taxable income, so you pay less tax and Medicare levy. However, it does not reduce your ordinary earnings for super guarantee purposes. To estimate how much can you salary sacrifice, use your annual gross pay and the 2026–27 tax rates: nil up to $18,200, 15% to $45,000, 30% to $135,000, 37% to $190,000, and 45% above that, plus 2% Medicare.

How Much Can You Salary Sacrifice? Hourly to Annual Pay and State Differences in Ordinary-Time Earnings

Based on the 38-hour week, annual gross pay is your hourly rate multiplied by 38 hours per week times 52 weeks, with super paid on top.

How Much Can You Salary Sacrifice? Understanding Hourly to Annual Pay

Converting your hourly rate to an annual salary is straightforward, but state differences in ordinary-time earnings can affect your pay. This guide explains the formula, the National Minimum Wage, award rates, casual loading, superannuation, and how much can you salary sacrifice.

The Formula: Hourly × Hours per Week × 52

Annual gross pay is your hourly rate multiplied by the number of hours you work each week, then by 52 weeks. For a standard full-time role, we assume 38 hours per week, as set by the Fair Work Ombudsman. So:

Annual gross = hourly rate × 38 × 52

For example, at the National Minimum Wage of $26.44 per hour, annual pay is $26.44 × 38 × 52 = $52,254.88 (before tax and super). If you work different hours, adjust the weekly hours accordingly. This calculation assumes the same rate every week with no unpaid overtime, penalty rates, allowances, or salary sacrifice.

Fortnightly Pay

Your fortnightly gross pay is simply your weekly pay multiplied by two. For the minimum wage, weekly pay is $1,004.90, so fortnightly is $2,009.80. This helps when budgeting or comparing to salary offers.

National Minimum Wage vs Award Rates

The National Minimum Wage from 1 July 2026 is $26.44 per hour, or $1,004.90 per week for 38 hours. This is the legal minimum for employees not covered by an award or registered agreement. However, most industries have award rates set by the Fair Work Commission, which are often higher. For example, hospitality, retail, and construction awards specify minimum pay rates for each classification. Always check your award before assuming your rate.

Casual employees receive a 25% loading on top of their base rate, making the casual minimum wage $33.05 per hour. This loading compensates for the lack of paid leave. Do not enter a rate that already includes casual loading into the calculator; instead, use the base rate and check the casual loading option.

Superannuation and Salary Sacrifice

Superannuation guarantee is 12% of your ordinary earnings, paid on top of your gross pay. The maximum contribution base for 2026–27 is $270,830. For example, on a $52,254.88 annual salary, super is $6,270.59 (12% of ordinary earnings). This is not deducted from your pay; it is an additional contribution by your employer.

Salary sacrifice allows you to exchange part of your pre-tax salary for benefits like extra super contributions, a car, or other fringe benefits. This reduces your taxable income, so you pay less income tax and Medicare levy. To understand how much can you salary sacrifice, start with your annual gross pay and apply the 2026–27 resident tax rates: nil to $18,200; 15% to $45,000; 30% to $135,000; 37% to $190,000; 45% above that. Medicare levy is generally 2% of taxable income. Note that the Medicare levy surcharge and HELP repayments are not included here.

State Differences in Ordinary-Time Earnings

The Australian Bureau of Statistics (ABS) publishes Average Weekly Earnings (AWE) data. For May 2026, full-time adult ordinary-time earnings nationally were $2,083.70 per week. All employees total earnings (including part-time) averaged $1,579.20 per week. These are national averages, but state differences exist. For example, earnings in New South Wales and Western Australia tend to be higher due to mining and finance, while Tasmania and South Australia are often lower. The ABS reports state-level figures, but they are averages, not medians for a specific job. Your own pay may differ based on your industry, experience, and location.

When comparing salary offers, consider the state average for your occupation. The average pay page provides more context. For minimum wage rates, see the minimum wage page.

Tax and Take-Home Pay

After calculating annual gross pay, you can estimate tax using the 2026–27 resident tax scale. For a single person with no dependents, the tax-free threshold is $18,200. Medicare levy is 2% of taxable income, with reductions for low-income earners (using 2025–26 thresholds as 2026–27 reductions are unconfirmed). For example, on $52,254.88, tax would be approximately $5,092 (using the 15% and 30% brackets) plus Medicare of $1,045, leaving take-home pay of $46,117.88. This is before any salary sacrifice.

To see how much can you salary sacrifice, reduce your taxable income by the sacrificed amount and recalculate tax. For instance, sacrificing $10,000 into super lowers taxable income to $42,254.88, reducing tax to about $3,638 and Medicare to $845, saving $1,654 in tax. Remember, super contributions are taxed at 15% within the fund, but the overall benefit depends on your marginal rate.

Important 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 more detailed calculations, use our timesheet, or explore super and packaging for salary sacrifice strategies.