How to Set Up Salary Sacrifice and Convert Your Hourly Rate to Annual Pay

Understanding Your Hourly Rate and Annual Pay

When you have an hourly rate or a salary offer, knowing your annual gross pay helps you plan your budget, compare job offers, and understand your tax and super obligations. The standard formula for converting an hourly rate to annual pay is:

Annual gross pay = hourly rate × hours per week × 52 weeks

For full-time employees in Australia, we assume a 38-hour week, as this is the ordinary hours for most awards and the National Employment Standards. If you work different hours, adjust the weekly figure accordingly. This calculation gives you a base annual figure before tax, super, and any deductions.

Fortnightly Pay

Many Australian employees are paid fortnightly. To find your gross fortnightly pay, multiply your weekly pay by two. For example, if your hourly rate is $30 and you work 38 hours per week, your weekly pay is $1,140 and your fortnightly pay is $2,280. This is useful for budgeting and comparing with salary offers that are quoted fortnightly.

The National Minimum Wage and Award Rates

The Fair Work Commission sets the National Minimum Wage each year. From 1 July 2026, the minimum hourly rate is $26.44, which equates to $1,004.90 per week for a 38-hour week. However, most employees are covered by an award or enterprise agreement that sets higher minimum rates. Award rates vary by industry and occupation, and they often include penalty rates for evening, weekend, or public holiday work.

Casual employees receive a 25% loading on top of the base rate. For the National Minimum Wage, this means casuals earn at least $33.05 per hour. The loading compensates for the lack of paid leave entitlements. When using our timesheet, you can check a box to add the 25% casual loading on top of your base hourly rate. Do not enter a rate that already includes casual loading; the calculator will add it for you.

Superannuation: Paid on Top

Super guarantee is a compulsory contribution your employer makes to your super fund. From 1 July 2026, the rate is 12% of your ordinary earnings, paid on top of your salary. This means if your annual gross pay is $60,000, your employer contributes an additional $7,200 to your super, up to the maximum contribution base of $270,830 per year. Super is not deducted from your take-home pay; it is an extra benefit.

Tax and Medicare Levy

Your annual gross pay is subject to income tax and the Medicare levy. For the 2026–27 financial year, the resident tax rates are:

• 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

The Medicare levy is generally 2% of your taxable income. The tax-free threshold is included in the rates above. If you have a HELP debt, the Medicare levy surcharge, or salary packaging, these are not included in our calculator. For a more detailed estimate, see our take-home pay page.

How to Set Up Salary Sacrifice

Salary sacrifice is an arrangement where you agree to reduce your pre-tax salary in exchange for benefits such as additional super contributions, a car, or electronic devices. If you are wondering how to set up salary sacrifice, the first step is to check with your employer whether they offer salary sacrifice schemes. Common options include:

• Salary sacrifice into super: You can contribute extra pre-tax dollars to your super fund, up to the concessional contributions cap ($30,000 per year for 2026–27). This reduces your taxable income and can lower your tax bill.
• Novated lease for a car: Your employer pays for a car lease and running costs from your pre-tax salary.
• Other benefits: Some employers offer salary sacrifice for laptops, parking, or childcare.

When you set up salary sacrifice, your base salary for super guarantee calculations is reduced by the sacrificed amount. However, the Australian Taxation Office has rules to prevent excessive reduction of super guarantee obligations. Always consult a tax professional or your employer’s HR department before entering an arrangement. Our super and packaging page has more details.

State Differences in Ordinary-Time Earnings

Ordinary-time earnings vary across Australian states and territories due to differences in industry mix, award coverage, and cost of living. According to the Australian Bureau of Statistics’ Average Weekly Earnings survey (May 2026), the national average for full-time adult ordinary-time earnings is $2,083.70 per week. However, this figure is an average across all industries and states, not a median for any specific job. For example, mining and professional services tend to pay higher than retail or hospitality. If you want to compare your pay with industry or state averages, see our average pay page.

Using the Timesheet Calculator

Our timesheet calculator allows you to enter your base hourly rate and choose whether to add casual loading. It then estimates your annual, fortnightly, and weekly gross pay, along with estimated tax, Medicare, and super. Remember that the calculator assumes a constant 38-hour week with no unpaid overtime, penalty rates, allowances, or salary sacrifice. It uses the 2026–27 tax rates and the 2025–26 Medicare levy reduction thresholds (as the 2026–27 thresholds were not confirmed at the time of this guide). The result is an estimate, not a determination of your actual pay or tax liability.

Key Takeaways

• Annual gross pay = hourly rate × hours per week × 52 (assume 38 hours for full-time)
• Fortnightly pay = weekly pay × 2
• The National Minimum Wage is $26.44 per hour; award rates are higher
• Casual loading is 25% on top of the base rate
• Super guarantee is 12% paid on top of your ordinary earnings
• Salary sacrifice reduces taxable income but affects super guarantee calculations
• Use our reference tables and pay guides for more information

Always check your specific award or agreement and consult a qualified accountant or tax adviser for personal financial advice.