Your Guide to the 40 per Hour Annual Salary: What Hits Your Bank Account

Understanding the 40 per Hour Annual Salary

When you see a job ad quoting $40 per hour, it’s important to know what that means for your bank account. The 40 per hour annual salary is $79,040 before tax, based on a 38-hour week and 52 weeks a year. That’s the figure employers use in contracts and award rates. But what you actually keep after tax and the Medicare levy is lower.

Gross vs Net Pay

Your gross annual salary is $79,040. From that, the Australian Taxation Office withholds income tax and the Medicare levy. Using the 2026–27 tax rates:

• First $18,200: tax-free
• $18,201 to $45,000: 15 cents per dollar over $18,200
• $45,001 to $135,000: $4,020 plus 30 cents per dollar over $45,000

Your taxable income of $79,040 falls in the third bracket. The tax on that is $4,020 + 0.30 × ($79,040 – $45,000) = $4,020 + $10,212 = $14,232. Then add the Medicare levy of 2%: $1,580.80. Total tax and Medicare: $15,812.80. But you also get the Low Income Tax Offset (LITO) of up to $700, which reduces your tax. After LITO, your total tax is about $15,480, leaving you with take-home pay of approximately $63,227.

That’s the amount that reaches your bank account each year – about $5,269 a month or $2,432 a fortnight.

How to Compare Job Offers

When comparing jobs, don’t just look at the hourly rate. Consider:

• Superannuation: Your employer must pay 12% super on top of your salary. That’s an extra $9,484.80 a year into your super fund. Some ads say “plus super”, meaning the $40 is your base and super is extra.
• Salary packaging: You may be able to sacrifice part of your salary for benefits like a car or additional super, which reduces your taxable income and increases your take-home pay. See our guide on Salary packaging.
• Leave and allowances: Annual leave, sick leave, and shift penalties can boost your actual earnings.

Use our Take-home pay calculator to see exactly what you’d get after tax for any hourly rate.

The Minimum Wage Benchmark

For context, the national minimum wage from 1 July 2026 is $26.44 per hour or $1,004.90 per week. At $40 per hour, you’re earning well above that. The average full-time adult ordinary time earnings are about $2,083.70 per week ($108,352 a year), so $40 per hour is below that average but still a solid wage for many roles.

Medicare Levy and Thresholds

Everyone pays the Medicare levy at 2% of taxable income, unless your income is very low. The latest single-person thresholds are $28,011 and $35,013. If your income is below $28,011, you pay no levy. Between $28,011 and $35,013, you pay a reduced rate. At $79,040, you pay the full 2%.

Putting It All Together

When you see a job offering $40 per hour, your 40 per hour annual salary is $79,040. After tax and Medicare, you take home about $63,227. Add super of $9,484.80, and your total remuneration package is $88,524.80. That’s the number to compare with other offers.

For more benchmarks, see our Average pay page. And remember, the amount that lands in your account each fortnight is what pays the bills – not the gross figure.