Australia’s wage growth held steady at the end of 2025, with the Wage Price Index (WPI) up 0.8% in the December quarter and 3.4% over the year, according to seasonally adjusted figures from the Australian Bureau of Statistics (ABS).
In a media release, ABS head of prices statistics Michelle Marquardt (pictured) said the latest result extends the pattern seen through the second half of last year.
Both the private and public sectors recorded 0.8% quarterly wage rises, but the public sector continued to outpace the private sector over the year. Public sector wages grew 4.0% through the year to December 2025, compared to 3.4% in the private sector, marking the fourth consecutive quarter of stronger public wage growth.
Marquardt said state‑based agreements were a key driver.
“Strong growth in public sector wages for 2025 was due to new state public sector agreements that delivered multiple pay rises over the course of the year,” she said. “Multiple pay rises occurred when agreements included backdated increases that took effect soon after the agreement was finalised, and a further scheduled rise was received later in the year.”
A greater share of workers received a pay rise over the quarter, with 21% of jobs recording a wage change, up from 16% a year earlier. However, the average hourly increase edged down to 3.5% from 3.6%. Only 23% of jobs with a wage change saw an annualised lift above 4%, down from 28% in December 2024, pointing to fewer large pay jumps.
Health care and social assistance was the biggest industry contributor to wage growth, boosted by major Commonwealth initiatives in aged care and early childhood education and scheduled enterprise agreement rises for frontline health workers in New South Wales.
By state, New South Wales recorded the strongest quarterly wage growth at 1%, while Western Australia led annual growth at 4.1%. The Australian Capital Territory saw the weakest quarterly rise at 0.3%, and the Northern Territory posted the lowest annual increase at 2.2%.
Higher wages offer some relief to borrowers, but with pay up 3.4% and inflation at 3.8%, real incomes are slipping, keeping borrowing capacity and serviceability under pressure.
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
