Australian salaries in 2025

From 1 July 2025, the national minimum wage rose by 3.5%, following the Fair Work Commission’s 2024-25 Annual Wage Review. The new rate will be $948.00 per week, or $24.95 per hour. While this increase provides a boost to lower-income earners, most professionals across Australia and New Zealand are seeing little to no change in salaries compared to last year.

Despite ongoing skills shortages in areas like tech, healthcare, and engineering (and cost of living), wage growth has remained sluggish across the broader workforce. So, what’s really happening in the market?

Economic stability leading to salary correction

The rapid wage hikes that emerged post-pandemic, particularly in high-demand industries, are now flattening. Employers who once felt pressured to offer inflated salaries to secure talent are recalibrating to more sustainable pay structures.

As Katie Kemp, Senior Consultant at Talent Wellington, explains:

“I would suggest that salaries are self-correcting. The pandemic and the perception of people scarcity has passed as the market turns to favour employers; so, rather than flattening, we are seeing salaries come to be more realistic and in line with the expectation of the role and a candidate’s experience.”

At the same time, economic stability is starting to return. The Reserve Bank of Australia (RBA) expects inflation to settle back into the target range of 2–3% by 2025–26. While positive for stability, businesses remain cautious as higher borrowing costs and tighter budgets limit room for generous pay rises.

Alan Dowdall, Practice Lead at Talent Sydney, adds:

“While niche tech skills remain in high demand which calls for competitive rates, overall, salaries remain flat. Clients are consistently asking for salary and market insights to ensure they’re getting value for money, and that seems to be the attitude for most employers who need to stick to their budgets.”

Australian wage growth slowing across the board

According to the Australian Bureau of Statistics, public sector wages rose by only 0.8% in the December quarter of 2024 — a significant slowdown compared to recent years. The Australian Industry Group also forecasts wage growth to ease from 4.1% to 3.9% by the end of 2025–26.

This slowdown is mirrored in private industry. As Edwin Foo, Principal Account Manager at Talent Perth, explains:

“I don’t foresee IT salaries decreasing despite the measured slow-down in annual wage growth. More notably rather, IT roles and positions that become less in demand during the course of 2025–26 will likely remain stagnant, whilst in-demand skill sets within areas of Cybersecurity, Data Science, Artificial Intelligence and Machine Learning for example, will continue to trend upwards due to ongoing shortages, and so depending on the IT specialisation, the wage growth experienced will be relative.”

Another factor at play is the shift from contract to permanent and fixed-term hiring. During the pandemic, contract roles offered lucrative salaries. In today’s market, many professionals are moving back into permanent roles — often with steadier but lower pay.

As Jacaleen Williams, Senior Consultant at Talent Wellington, puts it:

“There’s a mix in the market in terms of expectation and reality. Some areas saw salaries inflated/over-inflated around COVID times, and there is some flattening happening now. The decrease in contracting opportunities has seen people need to switch back to permanent or fixed-term positions.”

What professionals can do

For employees facing stagnating salaries, the lesson is clear: adaptability is key.

Edwin highlights the importance of staying ahead:

“The lesson here, is for IT candidates to remain on the front foot when it comes to upskilling themselves, and pivoting pathways if need be, in order to ensure that they are future-proofing their careers and maximising the salaries that they earn.”

If you’re looking to boost your career prospects in 2025, consider:

• Upskilling in high-demand areas such as data analytics, cybersecurity, and cloud computing

• Negotiating perks like bonuses, professional development budgets, or additional leave

• Exploring roles where demand remains high and skills shortages persist

While headline salary growth may be slowing, opportunities still exist for those who are proactive, adaptable, and skilled in the right areas. The 2025 wage landscape may not deliver the dramatic increases of recent years, but with the right approach, professionals can still position themselves strongly for future growth.

For more of the latest information on the hiring market, top salaries, skills in demand, and more, head to our More than Money Salary Guide 2025.