Average Weekly Wage and Cost of Living Hit All Time High

Historic Wage Milestone Doesn't Match Financial Reality

If you're working full-time and still feeling financially stretched, you're not imagining things. According to the Australian Bureau of Statistics (ABS) the average weekly wage has just crossed $2000 for the first time in history, jumping up 4.5% from the previous year. However, despite that, nearly half of all workers recently surveyed believing their salaries aren't keeping pace with living costs, and 72% feel wages are growing slower than the prices they're paying.

Average Weekly Earnings Break Down

The ABS data reveals significant variations in who's actually benefiting from these wage increases. Men working full-time average $2106.40 weekly, while women earn $1864.10 - highlighting a persistent gender pay gap that affects household budgets differently.

Geographically, your postcode matters enormously too. ACT workers top the earnings ladder at $2236 weekly, followed by Western workers at $2154. If you're in Tasmania, you're looking at the lowest average of $1793 weekly.

Industry choice also pays a big part in determining your pay packet too. Mining workers are riding high with $3174 weekly, while those in the service sector earn just $1459. Public sector employees ($2167) consistently out-earn their private sector counterparts too ($1966).

Why Higher Wages Feel Like Less Money

These higher wages aren't being transferred into a higher standard of living or more disposable income though as essential costs are growing even faster than pay packets. The average weekly grocery bill for a family of four now costs $240. That's up from $215 just last year which is an 11% jump. That easily outpaces the 4.5% wage growth.

Housing Costs Consume Growing Income Shares

Housing pressures are where the wage milestone becomes meaningless for many households. Sydney's median weekly rent has hit $730, while first-home buyers face an increasingly impossible market. And if you're thinking of buying a median-priced house, then the recommended annual salary required in order to buy that home for a household is now $203,000 nationally. If you live in Sydney then it's nearly $300,000!

This represents a fundamental shift from previous generations. In the 1980s, households spent about 60% of disposable income on essentials like housing, food, transport and utilities. Today, that proportion has increased significantly, leaving less room for savings or discretionary spending despite higher nominal wages.

The Generation Rent Reality

For renters, the situation creates a double burden. Not only are they facing historic rent increases, but the excess cash that previous generations would have saved for a house deposit is now being absorbed by higher essential living costs. With the average home now costing seven to 10 times the average wage, saving for that all important deposit is now further away than ever, and for many it's out of reach.

Why The Wage-Wealth Disconnect?

Back in the late 80s and 90s, despite high interest rates, houses were more affordable. House prices were relatively low, as was the house-price-to-income cost ratio. Home ownership was therefore primarily an income issue that workers could eventually overcome with job promotions and better salaries. Since the early 2000's though that has fundamentally changed as there has been a rapid increase in the home-price-to-income ratio. The rise in the cost of living doesn't help her either as it makes if even harder to save up for a deposit. Combine those together and you have reduced savings and higher essential costs that impact peoples ability to buy a home, even on a 'decent' salary.

This shift shows in household earners too. In 1980, Australian households typically spent just over 60% of their salary on essential living costs. This allowed many households to own a home on a single salary. Fast-forward to 2025 though and around 73% of families with children under 15 have both parents employed, yet many still struggle financially.

Smart Financial Strategies for Wage Earners

Despite the challenging landscape though there are practical steps you can take to maximise your financial position. If you're among the 35% of households with a mortgage, consider whether your current home loan rate is competitive - even small rate differences compound significantly over time.

For those still renting and saving for deposits, compare high-interest savings accounts and term deposits as they can help your money work harder while you build that crucial deposit. Even for those of you not saving for a deposit, if you have any money that could be used for savings, consider putting this aside in these higher interest earning accounts, no matter how small, as any savings will add up over time, especially with compound interest.

Avoid personal loans where you can as they might seem tempting for major purchases, but can add unnecessary financial pressure on yourself, and potentially detract from more important financial decisions.

Making Your Money Work Harder

While the $2000 weekly wage milestone makes headlines, your individual financial strategy matters more than national averages. Whether you're comparing mortgage rates, seeking better savings account returns, or evaluating personal loan options for necessary purchases, the key is ensuring every dollar works as hard as possible in today's challenging economic environment. At MoneyMart, we help you compare financial products to find the best deals that actually improve your bottom line, not just the statistics.