What Is Gross Salary? Understanding Your Pay Before Tax and Medicare
Gross salary varies by job and award, but the national minimum wage is $26.44 per hour or $1,004.90 per week as set by Fair Work.
What Is Gross Salary?
When you see a job advertisement or receive an employment contract, the figure quoted is usually your gross salary. This is the total amount you earn before any deductions are taken out. Understanding what is gross salary and how it relates to the money that actually lands in your bank account is essential for budgeting and comparing job offers.
Gross salary includes your base hourly rate or annual wage, plus any loadings, allowances, overtime, or bonuses. It does not include employer superannuation contributions if the salary is advertised as "plus super". For example, if you are offered $80,000 plus super, your gross salary is $80,000 and your employer pays an additional 12% ($9,600) into your super fund. That extra amount is not part of your take-home pay.
The National Minimum Wage
Fair Work sets the national minimum wage each year. From 1 July 2026, the rate is $26.44 per hour or $1,004.90 per week for a 38‑hour week. This applies to employees not covered by an award or registered agreement. Many awards have higher minimum rates, so always check your specific industry award using the Minimum wage guide.
From Gross to Net: What Comes Out?
Your gross salary is reduced by two main deductions: income tax and the Medicare levy. Your employer withholds these from each pay and sends them to the Australian Taxation Office. The amount you receive after these deductions is your take-home pay.
Income Tax Brackets for 2026–27
The Australian tax system is progressive. For residents, the first $18,200 you earn is tax‑free. After that, you pay:
- 15c for each dollar between $18,201 and $45,000
- 30c for each dollar between $45,001 and $135,000
- 37c for each dollar between $135,001 and $190,000
- 45c for each dollar over $190,000
A Low Income Tax Offset (LITO) reduces your tax if you earn under $66,667. The maximum offset is $700 for incomes up to $37,500, then it phases out.
Medicare Levy
Most residents pay the Medicare levy at 2% of your taxable income. However, if you earn below certain thresholds, you pay a reduced rate or nothing. The latest single‑person thresholds are $28,011 (lower) and $35,013 (upper). If your taxable income is between these amounts, the levy is 10c per dollar over the lower threshold. Above $35,013, you pay the full 2%. For full‑time workers on the minimum wage or higher, you will generally pay the full 2%.
For more details on how these interact, see Tax and Medicare.
Example: Take‑Home Pay on the Minimum Wage
Let’s say you work 38 hours per week at the national minimum wage of $26.44. Your gross weekly pay is $1,004.90. Annually, that’s $52,255 (rounded). Using the 2026–27 tax rates:
- Tax on $52,255: first $18,200 tax‑free, then $26,800 taxed at 15c = $4,020, plus $7,255 taxed at 30c = $2,176.50. Total tax = $6,196.50. LITO applies: $700 offset reduces tax to $5,496.50.
- Medicare levy: 2% of $52,255 = $1,045.10 (full rate applies as income is above $35,013).
- Total deductions: $5,496.50 + $1,045.10 = $6,541.60.
- Net annual pay: $52,255 – $6,541.60 = $45,713.40.
- Fortnightly take‑home: $45,713.40 ÷ 26 = approximately $1,758.21.
This is an estimate. Your actual take‑home may vary due to rounding in payroll tax tables, salary sacrifice, or HELP/HECS repayments.
Why Gross Salary Matters
Knowing what is gross salary helps you compare job offers fairly. A role offering $80,000 gross with good super and benefits may be better than one offering $85,000 with no super. Always check whether the salary is quoted as “plus super” or “including super”. Use the Take-home pay calculator to estimate your net pay for different gross salaries.
Superannuation
Employer super contributions are currently 12% of your gross salary (from 1 July 2026). If your salary is $80,000 plus super, your employer pays an extra $9,600 into your super fund. This money is not accessible until retirement, but it is a key part of your total compensation package. Learn more about Super.
Summary
Gross salary is the headline figure, but your take‑home pay depends on tax brackets, the Medicare levy, and any pre‑tax deductions. By understanding what is gross salary and how deductions work, you can plan your budget and negotiate with confidence. For personalised estimates, use the Clearance tool to see your net pay after tax and Medicare.
Questions
What is gross salary?
Gross salary is the total amount you earn before any deductions. It includes your base pay, allowances, and any bonuses or overtime. Your employer quotes this figure in your contract or job ad. It is not the amount that reaches your bank account.
How do I calculate my take-home pay from gross salary?
Start with your gross annual salary. Subtract the tax you owe using the 2026–27 resident tax brackets: nil on the first $18,200, then 15c per dollar up to $45,000, and so on. Then subtract the Medicare levy, which is 2% of your taxable income (with reduced rates for low incomes below $35,013). The result is your net annual pay. Divide by 26 for a fortnightly estimate.
Does super come out of my gross salary?
No, if your salary is quoted as 'plus super', the 12% super guarantee is paid on top of your gross salary and does not reduce your take-home pay. If your salary is 'including super', then the super component is deducted from the quoted figure before tax, lowering your gross salary for tax purposes.