A guide to minimum wage in Australia for casual workers
If you’re a casual worker, do you know what rate you should be getting? It’s important to know what the current minimum wage is to ensure you’re being fairly compensated for the work you do.
The minimum wage in Australia for casual workers includes an additional ‘loading’ on top of the base rate, so knowing how to calculate your correct payment rate is also important.
In this article we define what the minimum wage is, explore the laws governing wage rates, and go over some of the factors that affect how the minimum wage is set.
What is minimum wage?
Minimum wage is the lowest rate an employer is legally allowed to pay you. It’s set at a level that ensures all workers are paid enough to have a relative standard of living.
National minimum wage applies to all workers not covered by an industry award or registered agreement. Currently, for full-time and part-time adult employees, the national minimum wage is $915.90 for a 38-hour work week, or $24.10 per hour. For casuals, this is slightly different. The amount you’ll get paid as a casual worker for minimum wage is $30.15 per hour, due to a casual loading of 25% being applied on top of the base rate.
If the work you do is covered by an industry award or registered agreement then the minimum-pay rates set out in your award or agreement will apply, instead of the national minimum wage.
Minimum wage for casual workers: laws in Australia
The Fair Work Act 2009 outlines the minimum wage and each year this amount is reviewed by the Fair Work Commission. Once this annual wage review is complete, any changes to minimum wage are set out in the National Minimum Wage Order for that year. The percentage of loading added to the base minimum wage for casual workers in Australia is also specified in the Order.
The best way to find your specific wage is to use a minimum wage calculator. Check what pay rate applies to your job you can use the Pay and Conditions Tool (P.A.C.T.) provided by the Fair Work Ombudsman.
Factors influencing minimum wage
There are a number of factors that determine how the minimum wage for casual employees and all other workers is set. Some of the main ones include:
Cost of living
Given that the minimum wage is meant to ensure a relative standard of living for all workers, the cost of living is a major contributing factor. During the Annual Wage Review the Fair Work Commission various living-cost indicators, including:
Housing (rent and mortgage repayments)
Food
Transportation
Utilities (electricity, gas)
Other essential expenses (clothing, healthcare)
Inflation
Inflation is the measure of how much the prices of goods and services you pay for are increasing. The most common method for measuring changes in the cost of living uses Consumer Price Index (CPI). The CPI combines the prices of a basket of goods and services consumed by households into a single index. Inflation is measured as the growth in the CPI overtime.
The CPI is calculated every three months and includes costs like childcare, transport, housing, food, alcohol and tobacco, health education, clothing and footwear, insurance, household items, and recreation. These items are not all considered equally – greater weight towards the overall inflation percentage is given to the things households generally spend more on.
Productivity
Another factor that the Fair Work Commission considers when reviewing the minimum wage is worker productivity. This ensures that workers are compensated if they’re delivering more output. However, productivity is a complex issue and needs to be carefully balanced. While increased productivity may suggest a potential for a higher minimum wage, the Fair Work Comission also needs to consider the impact that higher wages would have on businesses and job creation.
Labour market conditions
When the Fair Work Commission reviews the national minimum wage each year, they consider things like how many people are unemployed and trends in the job market. If the economy is strong and there aren’t many people unemployed, it may lead to an increase in the minimum wage. But if the economy is struggling, they may not raise it as much or at all.
Wage parity
Another factor that the Fair Work Commission may consider is how the minimum wage compares to award wages in different industries. They may compare the national minimum wage to award rates for industries that also tend to be lower paid, such as hospitality, fast food, retail, and childcare.
What to do if your employers are paying you below minimum wage
If you’re being paid less than the relevant minimum wage rate for your job type, here are some steps you can take:
Gather evidence
You should always keep copies of your payslips, employment contract, and any records of your working hours. Not only are these great to check that you’ve been paid for the correct hours worked, but can also be relied upon as evidence in case you’re not being paid the correct amount.
Calculate the underpayment
Once you’ve checked through your payslips, use the Fair Work Ombudsman website’s pay calculator tool to determine the minimum wage you should have been paid based on your award or classification.
Talk to your employer
Set up a meeting to discuss your concerns with your employer. Make sure to bring any evidence and show them your calculations. Sometimes it can be a simple error on their side, that they’re willing to correct when you bring it to their attention.
Lodge a formal complaint
If talking to your employer directly doesn't resolve the issue, the Fair Work Ombudsman can help. You can lodge a complaint online or call their hotline for assistance. They also offer free services to try and reach an agreement with your employer.
Take legal action as a last resort
If the matter has not been resolved after taking the above steps, you may be advised to take legal action against your employer. If this is the case, check the resources for legal help provided by the Fair Work Ombudsman to help guide you through the next steps.
Understanding the minimum wage and your rights as a casual employee is essential to ensure you’re being fairly compensated for your work. Always check your payslips, know your wage entitlements, and use the available resources from the Fair Work Ombudsman if you have any questions or issues about your wages.
FAQs
What is the current minimum wage in Australia?
The current national minimum wage in Australia is $24.10 per hour for permanent employees, which works out at $915.90 per week if you’re working full time (38 hours per week). Casual workers get paid the same hourly base rate plus a 25% loading, which equates to $30.15 per hour.
Is there a difference between minimum wage and award rates?
Yes, there is a difference between the national minimum wage and many award rates. Some industry awards may offer a higher minimum pay rate. Since the last national minimum wage order came into effect in July 2024 there are a few awards that currently have a minimum pay rate that is slightly less than the national minimum wage. The Fair Work Ombudsman has a full list of all the awards it is available here.
What factors influence changes to the minimum wage?
There are many factors that influence change to the minimum wage, including:
Cost of living
Inflation – gauged by the Consumer Price Index
Worker productivity
Labour market conditions
Wage parity
How does the minimum wage compare to the cost of living in Australia?
The national minimum wage in Australia is set at a level that ensures a relative standard of living, and is reviewed annually to ensure it keeps up with factors such as inflation. It is designed to keep pace with the cost of living and ensure people earn enough for relative essentials.
What are my rights as an employee regarding minimum wage?
You have the right to be paid fairly for the work you do – at a pay rate that is at least the relevant minimum wage. You should also receive accurate payslips, be paid for all hours worked, and have access to fair work resources if you have concerns about your pay.
What should I do if I suspect my employer is paying me below the minimum wage?
If you suspect your employer is paying you less than the minimum wage there are several steps you can take. The first is to gather evidence such as payslips and records of your working hours. Then, discuss your concerns with your employer. If this doesn’t resolve the issue, you can seek support from the Fair Work Ombudsman. You can also lodge an anonymous tip off about your employer with the Fair Work Ombudsman here.
How can I calculate the minimum wage I should be earning?
You can calculate your minimum wage using the Pay and Conditions Tool (P.A.C.T.) on the Fair Work Ombudsman’s website. This tool helps you determine the correct pay rate based on your job and industry.
What resources are available to me if I have questions about minimum wage or the recent award?
If you have questions about the minimum wage or the award that applies to your industry you can get information from the Fair Work Ombudsman.
Are there any regional variations in minimum wage rates across Australia?
No, there aren’t regional minimum wage rates – the national minimum wage applies throughout Australia. If your job is covered by an industry award or agreement then the minimum rate set out in these will apply instead of the national minimum wage.
What is the difference between the minimum wage and the living wage?
The national minimum wage is a specific pay rate set by the Fair Work Commission, which is the lowest rate an employer can pay you. It’s meant to be enough to ensure a relative standard of living, however many people disagree that it is high enough to ensure an acceptable or comfortable standard of living. This is where the term ‘living wage’ comes in – a living wage is a figure that should comfortably cover all relative living expenses and allow you to stay out of poverty.
Source: The Fair Work Ombudsman
