What is salary sacrifice and how does it affect my pay?

Salary sacrifice is an arrangement where you agree to forgo part of your pre-tax salary in exchange for benefits such as a car, laptop, or additional super contributions. It reduces your taxable income but may affect your super guarantee base and some entitlements. The calculator on this site does not include salary sacrifice; you should adjust your hourly rate manually if you have a packaging arrangement.

How do I calculate my annual salary from an hourly rate?

Multiply your hourly rate by your weekly hours, then by 52. For a standard full-time week of 38 hours, the formula is: hourly rate × 38 × 52. For example, at the National Minimum Wage of $26.44 per hour, the annual gross is $26.44 × 38 × 52 = $52,261.44. This assumes no unpaid overtime, penalty rates, or allowances.

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

The National Minimum Wage ($26.44 per hour from 1 July 2026) is the legal floor for employees not covered by an award or agreement. Award rates are higher minimums set by the Fair Work Commission for specific industries and occupations. Many awards also include casual loading of 25% on top of the base rate. Always check your award or enterprise agreement for your correct minimum.

What Is Salary Sacrifice? A Guide to Hourly to Annual Pay in Australia

For a full-time employee working 38 hours per week, your annual salary is your hourly rate multiplied by 1,976 hours (38 × 52).

What Is Salary Sacrifice? Understanding Your Hourly to Annual Pay

If you are an Australian employee or employer trying to make sense of an hourly rate or a salary offer, the first step is knowing how to convert between the two. The standard formula is simple: annual gross pay ≈ hourly rate × hours per week × 52. For a full-time employee, we assume 38 hours per week, as set by the Fair Work Ombudsman. That gives you 1,976 hours per year.

But the real picture involves more than just multiplication. You need to consider the National Minimum Wage, award rates, casual loading, superannuation, tax, and the option to what is salary sacrifice – a way to reduce your taxable income by swapping some salary for benefits.

The Basic Conversion: Hourly to Annual

To get your annual salary from an hourly rate, multiply by your weekly hours and then by 52. For example, if you earn $30 per hour and work 38 hours each week:

$30 × 38 = $1,140 per week $1,140 × 52 = $59,280 per year

You can also work out your fortnightly pay: $1,140 × 2 = $2,280. Many employers pay fortnightly, so this figure is useful for budgeting.

This calculation assumes you work the same hours every week, with no unpaid overtime, no penalty rates, no allowances, and no salary sacrifice. It is a gross figure before tax and super.

National Minimum Wage and Award Rates

From 1 July 2026, the National Minimum Wage is $26.44 per hour, or $1,004.90 per week for 38 hours. If you are a casual employee, you are entitled to a 25% casual loading on top, making the minimum casual rate $33.05 per hour. This loading compensates for not receiving paid leave.

However, most employees are covered by an award or enterprise agreement that sets higher minimum rates. For example, the minimum wage page on this site provides the current legal floor, but you should check your specific award via the Fair Work Ombudsman’s pay guides or reference tables.

If you are comparing a salary offer to an hourly rate, remember that award rates often include a casual loading already. When using the timesheet, never type a rate that already includes casual loading – instead, type the base rate and tick the casual checkbox if applicable.

Average Earnings Benchmarks

The Australian Bureau of Statistics publishes Average Weekly Earnings (AWE) figures. For May 2026, full-time adult ordinary-time ordinary time was $2,083.70 per week. This is an average for full-time employees in their main job, not a median for a specific job. The all employees total earnings figure ($1,579.20 per week) includes part-time workers. These are averages, not your job’s median. Use the average pay page for more context.

Tax and Superannuation

Once you have your annual gross, you can estimate tax using the 2026–27 resident tax scale:

Nil up to $18,200
15% from $18,201 to $45,000
30% from $45,001 to $135,000
37% from $135,001 to $190,000
45% above $190,000

Plus Medicare levy generally 2% (the 2025–26 single reduction thresholds are used here as 2026–27 thresholds were not confirmed).

Super guarantee is 12% of ordinary earnings, paid on top of your salary, up to the maximum contribution base of $270,830. For example, on a $60,000 gross, your employer contributes $7,200 extra. Super is not deducted from your pay, it is additional.