Comprehensive Guide | 2023 Minimum Wages Australia

Comprehensive Guide | 2023 Minimum Wages Australia

Table of content

  1. What is the minimum wage?
  2. Minimum wage changes
  3. Different types of minimum wages
  4. Minimum wages and penalty rates
  5. Minimum wage and superannuation
  6. How can Workstem assist you?

Australia is renowned for its robust labour laws and a commitment to fair wages for all workers. Understanding the minimum wage and its update is crucial for both employers and employees. This comprehensive guide will walk you through everything you need to know about minimum wages in Australia. Explore with Workstem now!

What is the minimum wage?

The minimum wage is the lowest legally mandated hourly wage that employers are required to pay their employees for their work. It is set by government authorities to ensure that workers receive a basic level of compensation that allows them to meet their basic needs.

It is generally dependent on the industrial instrument that applies to their employment. For example, a modern award or registered agreement.

Minimum wage changes

The minimum wage in Australia undergoes regular updates. It’s essential to keep an eye on annual Fair Work Commission annual wage reviews.

The national minimum wage

Each year, the Fair Work Commission reviews both the National Minimum Wage and minimum pay rates under awards. Most changes begin on the first full pay period on or after 1 July.

As of 1 July 2023 the National Minimum Wage is raised to $23.23 per hour or $882.80 per week.

Industry award & EA minimum wage

The minimum wage for the majority of workers is determined by the industry or award that pertains to their field of work, and it’s normally higher than the national minimum wage.

These awards or EAs encompass a wide range of industries and job roles, underscoring the importance of accurate identification.

*If you don’t know your minimum wages regulated by awards or EA, you can find awards or EAs on Fair Work.

Different types of minimum wages

Certain employees are subject to distinct minimum wage rates, which can vary based on their employment type, age, or work capacity.

Minimum wage for young workers

The minimum wage for workers under 21 who are not covered by an award or agreement is determined based on a percentage of the national minimum wage. In Australia, individuals under the age of 21 fall under the category of junior employees, and they may be subject to varying minimum wage rates.

Age Percentage Full time and part-time

Casual (+25% of the base rate)

Under 16

36.8% $8.55 $10.69
16 47.3% $10.99

$13.74

17 57.8% $13.43

$16.79

18

68.3% $15.87 $19.84

19

82.5% $19.16

$23.95

20 97.7% $22.70

$28.38

Minimum wage for apprentices and trainees

Apprentices and trainees are individuals who have entered into a formal training contract with their employer. Specific rates and terms of employment are applicable to these employees.

The raise of their minimum wages depend on the certain amount of worked time, competency, the award your employment is covered by and other factors.

The Supported Wage System

The Supported Wage System (SWS) is a specialised minimum wage arrangement designed to assist individuals with disabilities who may not be able to perform work at the same level of productivity as others. The SWS allows employers to pay these employees a wage that is proportionate to their productivity, taking into account their reduced capacity to perform tasks due to their disabilities.

The Department of Social Services gives out information and advice about who is eligible for the Supported Wage System. It also accepts applications for the Supported Wage System and can deal with disputes.

If there are no supported wage provisions in the award or registered agreement, an employee with disability must be paid the full pay rate for their classification.

Minimum wages and penalty rates

The minimum wages set the floor for what employers must pay their employees. It ensures that workers receive at least a certain level of compensation for their work, regardless of when they work or the specific conditions.

Penalty rates come into play when employees work during non-standard hours (such as weekends, public holidays, overtime, morning or evening shifts) or under specific conditions that are outlined in awards or EAs. These rates are applied on top of the minimum wage, providing extra compensation for employees working at these times.

Minimum wage and superannuation

The minimum wage do not include superannuation. The minimum wage is the base wage rate that an employee should receive for their work before any deductions or additional payments, such as superannuation contributions, are considered.

Superannuation is a separate requirement, and it’s in addition to the minimum wage. Employers are legally obligated to contribute a percentage of their employees’ ordinary time earnings into a superannuation fund.

How can Workstem assist you?

Workstem, a world-class HR & payroll platform, assists employers and employees in effectively managing minimum wage compliance and payroll tasks. We help simplify complex calculations by determining pay rates based on factors like age and employment type, and also interprets and applies industry awards, considering penalty rates and allowances, reducing the risk of wage errors and non-compliance.

Plus, Workstem can streamline payroll processing by automating payroll calculations, tax withholding, and superannuation contributions, aiding employers in staying organised and meeting their payroll and minimum wage obligations. With employee self-service features and notifications, it enhances transparency and communication, ultimately promoting efficiency in HR management. Click to get a 14-day free trial.

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