What is base salary and how to compare job offers by take-home pay
Base salary is the gross amount before tax and Medicare; the national minimum wage is $26.44 per hour or $1,004.90 per week, but actual pay varies by award and agreement.
What is base salary and why it matters for your take-home pay
When you receive a job offer, the first number you see is usually the base salary. This is the gross amount your employer agrees to pay you before any deductions. Fair Work explains that the minimum pay rate is the gross pay – the amount before tax is taken out . For most employees, the base salary is set by the award that covers their industry or occupation, and it must be at least the national minimum wage.
As of 1 July 2026, the national minimum wage is $26.44 per hour or $1,004.90 per week (for a 38‑hour week). That works out to about $52,255 a year. But your base salary might be higher if you are covered by an award or a registered agreement. The key point: base salary is the starting point for calculating what actually lands in your bank account.
Base salary vs take-home pay
Your take-home pay is the amount that reaches your bank account after your employer withholds income tax and the Medicare levy. Superannuation is usually paid on top of your base salary (at 12% from 1 July 2026) and does not reduce your take-home pay unless the offer is described as a “total package including super”. Always check whether the advertised salary is base plus super or inclusive of super.
How to calculate your take-home pay from base salary
To compare job offers fairly, you need to estimate your after-tax income. The Australian Taxation Office publishes the resident tax rates for 2026–27 . For a single person with no dependants, the rates are:
- $0 – $18,200: Nil
- $18,201 – $45,000: 15c for each $1 over $18,200
- $45,001 – $135,000: $4,020 plus 30c for each $1 over $45,000
- $135,001 – $190,000: $31,020 plus 37c for each $1 over $135,000
- $190,001 and over: $51,370 plus 45c for each $1 over $190,000
You also pay the Medicare levy of 2% of your taxable income, unless you are below the low‑income thresholds. The latest published single‑person thresholds are $28,011 and $35,013. If your taxable income is below $28,011, you pay no Medicare levy. Between $28,011 and $35,013, the levy is reduced by 10c for every dollar over the lower threshold. Above $35,013, the full 2% applies.
Example: minimum wage earner
Take the national minimum wage of $52,255 per year. Using the 2026–27 rates:
- Tax: $4,020 + 30% × ($52,255 – $45,000) = $4,020 + $2,176.50 = $6,196.50
- Medicare levy: 2% × $52,255 = $1,045.10
- Low‑income tax offset (LITO): Maximum $700, reduced by 1.5c per $1 over $45,000. $52,255 – $45,000 = $7,255; reduction = $7,255 × 0.015 = $108.83; LITO = $700 – $108.83 = $591.17 (cannot reduce tax below zero).
- Net tax after LITO: $6,196.50 – $591.17 = $5,605.33
- Total deductions: $5,605.33 + $1,045.10 = $6,650.43
- Take-home pay: $52,255 – $6,650.43 = $45,604.57 per year (about $1,753.25 per fortnight).
This is a rough estimate. Your actual take-home may differ due to HELP/HECS repayments, salary sacrifice, or payroll rounding.
Comparing job offers: focus on after-tax amount
When you have two offers, do not just compare base salaries. One offer might have a higher base but less favourable salary packaging, or a lower base but include allowances that are taxed differently. Use a Take-home pay calculator that applies the current tax rates and Medicare thresholds. Also consider:
- Superannuation: If one offer is “$80,000 plus super” and another is “$85,000 inclusive of super”, the first gives you more take-home because super is on top. The second means your base is lower after super is deducted.
- Salary packaging: Some employers allow you to sacrifice part of your salary for benefits like a car or additional super, which reduces your taxable income and can increase take-home pay.
- Medicare levy surcharge: If you earn above $93,000 (single) and do not have appropriate private hospital cover, you may pay an extra 1% to 1.5%.
For a detailed breakdown of tax and Medicare, see our Tax and Medicare guide. And remember: the national minimum wage is a floor, not a target. Most full‑time employees earn more – the average full‑time adult ordinary time earnings are about $2,083.70 per week (ABS, May 2026).
Final tip
Always ask recruiters: “Is this base salary exclusive of super?” and “Does the offer include any salary packaging options?” Then run the numbers through a take-home pay estimator. The amount that reaches your bank account is what you actually live on – make sure you compare that, not just the headline figure.
Questions
What is base salary?
Base salary is the gross amount an employer agrees to pay you before any deductions such as income tax, Medicare levy, or superannuation. It is the figure typically quoted in job advertisements, often expressed as an annual amount plus super. Your take-home pay is what remains after tax and the Medicare levy are withheld.
How does the Medicare levy affect my take-home pay?
The Medicare levy is 2% of your taxable income for most employees. If your taxable income is below $28,011 (single), you pay no levy. Between $28,011 and $35,013, the levy is reduced on a sliding scale. Above $35,013, the full 2% applies. This is withheld from your pay along with income tax, reducing the amount that reaches your bank account.
Should I compare base salary or total package when evaluating job offers?
Compare the after-tax, after-Medicare amount you will actually receive, because two offers with the same base salary can have different take-home pay due to salary packaging, allowances, or super arrangements. Use a take-home pay calculator that accounts for the 2026–27 tax rates and Medicare thresholds to make a fair comparison.