Salary continuance cover and the national average
Salary continuance cover is a type of income protection insurance that pays you a regular benefit if you cannot work because of illness or injury. It is designed to replace a portion of your pre-tax salary, typically between 50% and 75%, until you are able to return to work or until the policy term ends. Understanding where your pay sits against the national full-time average is important when choosing the right level of cover.
The Australian Bureau of Statistics (ABS) publishes the official measure of average earnings in its Average Weekly Earnings survey. For May 2026, the national full-time adult average weekly ordinary time earnings were $2,083.70. Multiplied by 52 weeks, that gives an annual figure of about $108,352. This is the line that Place a salary on the line uses as its benchmark. However, your actual earnings may be higher or lower depending on your state, industry, and whether you are covered by an award or enterprise agreement.
Why state averages matter
The national average masks significant variation across states and territories. According to the ABS Average Weekly Earnings release for May 2026, full-time adult ordinary time earnings differ markedly:
- New South Wales: $2,108.80 per week (about $109,658 per year)
- Victoria: $2,041.10 per week (about $106,137 per year)
- Queensland: $2,039.70 per week (about $106,064 per year)
- South Australia: $1,970.20 per week (about $102,450 per year)
- Western Australia: $2,227.40 per week (about $115,825 per year)
- Tasmania: $1,846.30 per week (about $96,008 per year)
- Northern Territory: $1,984.10 per week (about $103,173 per year)
- Australian Capital Territory: $2,290.20 per week (about $119,090 per year)
If you live in Western Australia or the ACT, your earnings are likely above the national line. In Tasmania or South Australia, they are below. Salary continuance cover is usually based on your actual salary, not the national average, but insurers often use the national average as a cap. For example, a policy might limit the monthly benefit to 75% of the national average weekly earnings. If you earn more than that, you may need to consider a policy with a higher cap or a separate top-up arrangement.
The role of awards and agreements
Your method of setting pay also affects where you sit relative to the national line. The ABS Employee Earnings and Hours survey for May 2025 shows that 22.7% of employees are paid only by award, 34.6% by collective agreement, and 38.5% by individual arrangement. The average weekly total cash earnings for award-only employees was $922.20, well below the national full-time average. For those on collective agreements it was $1,746.10, and for individual arrangements $1,876.50.
From 1 July 2026, the national minimum wage is $26.44 per hour, or $1,004.90 per week on a 38-hour week, which works out to about $52,255 per year. Award minimums rose by 4.75% from that date. If you are on an award, your base rate may be higher than the minimum, but still below the national average. Salary continuance cover for award employees should reflect their actual earnings, not the award minimum, because the benefit is based on pre-tax salary.
Medians and the full-time average
It is important to distinguish between averages and medians. The national full-time average of $108,352 is pulled up by high earners. The median full-time weekly earnings (from the ABS Employee Earnings and Hours survey, August 2025) are lower. The on-site notes indicate a full-time median of about $90,532 per year and an all-employees median of about $74,100 per year. For salary continuance cover, insurers may use the median as a more realistic benchmark for typical workers, but the average remains the headline figure.
Tax considerations
Salary continuance cover premiums are generally not tax-deductible if the policy is held personally, but the benefits are tax-free if you paid the premiums with after-tax dollars. If your employer pays the premiums, the benefit is taxable. The 2026–27 tax rates are: nil up to $18,200; 15% from $18,201 to $45,000; 30% from $45,001 to $135,000; 37% from $135,001 to $190,000; and 45% above $190,000. The Medicare levy of 2% applies before any reductions. When calculating how much cover you need, consider your after-tax income and the tax treatment of the benefit.
How to use the national line
The States and territories page on this site shows how each state's full-time average compares with the national line. You can also explore Job medians and Industry medians to see how your occupation or industry stacks up. For salary continuance cover, the key is to ensure your benefit amount is sufficient to cover your essential expenses. The national average gives you a starting point, but your own salary, state, and award will determine the right level of cover.
Summary
Salary continuance cover is not a wage figure; it is an insurance product that replaces a portion of your income. The national full-time average of $108,352 per year is a useful reference, but your actual cover should be based on your own earnings. State averages vary by as much as $23,000, and award rates can be significantly lower than the average. Always check your own pay slip and consider consulting a financial adviser to tailor your cover to your circumstances.