What Is A Good Hourly Wage In Australia?

What Is A Good Hourly Wage In Australia?
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For as long as I can remember there has been tension between employers wanting to keep wages low and employee advocates like unions fighting to increase salaries. And, as more and more people move from permanent to casual employment, hourly rates are becoming increasingly important for prospective employees. So, what’s a good hourly rate in Australia?

Changing Workforce

Australia’s casual workforce sits at about 25 percent according to data from a recent government research paper. I was surprised by that number, mainly as it has barely moved over the last 20 years aside from a big jump during the 1990s. However, it also doesn’t include the number of people who have moved from full-time employment into independent consulting and contracting.

Those numbers are harder to uncover as many of those workers run their own businesses and, from a tax perspective, look like full time employees of their own businesses, even though they move from job to job across different employers or clients.

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What Does The Law Say About Wages?

The Fair Work Commission recently increased the minimum full-time wage for Australian adults from $694.90 per week ($18.29 per hour) to $719.20 per week ($18.93 per hour). That gives us a baseline to work from.

But that only kicks in once you turn 21. For younger workers, you need to take the full adult rate and scale it like this.

  • under 16 years: 36.8%
  • 16 years: 47.3%
  • 17 years: 57.8%
  • 18 years: 68.3%
  • 19 years: 82.5%
  • 20 years: 97.7%

(Source: Mywage.org)

That gives us some idea about minimum wages.

There are also award rates, that have been negotiated through unions. For example, the hospitality industry uses the minimum wage as directed by the Fair Work Commission as the basis for different roles. So, depending on what job you do, you could earn more than the minimum. The Fair Work Commission has a list of the various award pay rates for different industries on their website.

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What Do You Spend?

The amount spent by each household is dependent on a large number of factors. For example, if you have a mortgage you took out in the last year, based on recent averages, you’re probably paying between $2000 and $3000 per month. But if you’ve been in your home for 20 years and are still paying off your original loan you may only be paying a fraction of that amount.

Average Australian rents, although they vary from city to city, fall into those ranges as well.

Utilities and other household expenses can vary substantially. In my household, power, gas, water, phones, car running expenses, food, clothing, donations and other basics easily exceed $1500 per month. We’re a blended family with five kids who are in and out at different times.

When you put all that together and then compare it to the minimums suggested by the Fair Work Commission, it’s easy to see how even a two-income household can struggle to make ends meet.

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What Is A Good Hourly Rate?

Obviously, there will be some variation to this as we all have different expectations about living standards and expenses.

But, if you assume you need $1000 per week, after tax, to get by based on average mortgages or rental charges, food and other basics, and a little left over for entertainment, you can see the Fair Work Commission’s minimum of $719.20 per week, which is a pre-tax amount, won’t cut it.

To end up with $1000 in you hand after tax and your employer puts in the mandatory superannuation guarantee money, you need a gross weekly salary of $1280 per week. That’s $33.68 per hour assuming your work a 38 hour week as per the Fair Work Commission’s guidelines for the minimum wage.

But that’s a “getting by based on the averages” pay. Whether you think that’s good or not is a different question.

I recently wrote about how to set your rate if you’re self employed and I think similar rules apply when you’re determining what a good hourly rate is for you.

I think a good hourly rate is one that covers all your bills and allows you to set some money aside for fun things. Whether that’s buying the latest gadget or taking an annual holiday – a good wage is one that lets you live comfortably, have some margin for unforeseen expenses and allows you to enjoy some leisure time however you like.

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  • Simpler question to highlight the fuckery of eroding and undoing all the unions’ hard-fought gains:

    How many Australians qualify for paid sick leave and recreation leave?

    That’s how you know the gig economy, contract work, underemployment and casualization have gone too far. The ‘flexible’ workforce is entirely about being flexible to employer needs only, which include not getting paid when they don’t need you, and the concept of income security lying dead in a fucking gutter.

    • Do you really think it’s all one-way traffic? FWIW – I did close to 25 years of the workplace security thing. There were some great times in that but I doubt I’ll ever go back to it. Sure, things are more volatile for me now but I have a lot more freedom. Just as my clients can cut me loose with almost no notice, I can pick and choose who i work with as well.

      • Do I really think…? I’m thinking of folks like my brother who moved for a job after two years of long-term employment, but couldn’t get the government grant for moving costs, because it only applies to permanent roles which are now the exception, not the rule. I’m thinking of any numbers of folks’ attempts to buy into the housing market, with banks turning their noses up – for good reason – at anyone who might suddenly find themselves unemployed with anywhere from a month’s notice to a minute’s notice, with no certainty they can continue to service their loan.

        Australia’s not geared for this shit. I’m thinking of self-employed contractors and casuals whose wage is theoretically higher than an equivalent role’s permanent wage to compensate for paying themselves their own superannuation and leave entitlements… a ‘higher’ rate which fails to rise with cost of living as wages stagnate, and ends up becoming the ‘standard’ take-home without those benefits.

        I’m thinking of the ‘minimum wage’ that so many Australians don’t even make because of employers’ ability to punch down and trick their way around and outside of hard-won worker protections.

        If you wanna get technical it’s not ‘all’ one-way traffic, but the reality is it’s a fucking overwhelming one-way flow. Australian workers have lost more than they’ve gained in the ‘flexible workforce’ exchange.

        With the erosion of job security has come the ability for employers to burn through as many bridges as they like without consequence, and it’s a problem that gets worse the more vulnerable you are. If you have the rare privilege of making good money in a high-demand role where you don’t have to worry about finding work and can reject exploitative offers when you see them, then you’re laughing… There are far more Australians who cannot afford to laugh.

        Exploitation is rife in the modern workforce. When the choice is between getting exploited while earning enough to eat, or living on a below-the-povery-line welfare payment until you can find an employment arrangement that isn’t exploitative, no kidding people are choosing to be exploited… but that doesn’t make it OK, it isn’t a sign of a healthy let alone fair society.

        ‘Freedom of choice’ is a cold comfort to those whose only available choices are all shit.

      • It is one way.
        Majority of Australians don’t have the ability to pick and choose where they work, as some one that is highly skilled and experienced, who usually works only short term contracts so keeps their eyes on the job market, it’s very competitive.
        I started doing short term stuff last year when the company I worked for full time went bankrupt, while there we would put ad’s out for 5 extra people to cover a busy period, we would get over 100 responses within the week. It wasn’t low skilled work either, we were looking for fitters, TA’s but preferably electricians.
        You know why we got casuals in and why most places do these days? Because we could turn around and say next week is going to be a bit quiet, don’t bother coming back, we will call if we need you, people love not knowing if they will be able to put a roof over their head from one week to the next.
        A few factories I have worked for since have appalling safety records, want to know why? because the work force is casual, say something you get sacked.
        Business blow this flexible work crap up peoples arses all the time, we did have flexible work before it was called part-time.
        Casuals great, just don’t try get a mortgage.

    • That’s completely true. Any talk of “flexibility” is not about helping you – it’s about the employer getting their costs down.
      Western conservative economics is so screwed up at the moment. The idea of cutting corporate tax and then letting major corporations look after us is inherently stupid. Corporations are sociopathic by nature, as are shareholders. Trickle-down economics simply doesn’t work.

  • i work at a company that has just changed me from contact to full time. Before i wasnt getting paid for public holidays (12 per year) any sick days and they liked me to take some time off each year (unpaid). people used to always say you must be making more as a contractor but i wasnt after all that.
    Yesterday was me first paid sick day in 10 years and i also get a RDO once a month. i doesn’t compare.

  • A friend of mine often complains about people with colds/flu on public transport. I point out that with at least 20% of the workforce in casual labour (and not by choice), they don’t get paid sick leave. So they either work through their sickness or fail to pay their bills. In particularly bad situations, but not uncommon ones, they just get laid off by unscrupulous bosses, or have their hours severely reduced.

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