Taking on an apprentice or trainee is one of the better decisions a growing trades or services business can make, but the pay is more involved than a standard hire, and getting it wrong is a common source of underpayment. Apprentice and trainee wages are set by the relevant award on a progression basis, rising as the apprentice advances through the years of their training and, often, as they complete competencies, which means the pay is not a fixed rate but a moving one the employer must keep current. Layered on top are employer incentives that can materially offset the cost, and specific payroll and administrative setup the arrangement requires. A first-year apprentice wage might sit around $25,000 to $35,000 depending on trade and age band, while incentives and payroll tax concessions can offset several thousand dollars of that cost over the life of the apprenticeship. This guide covers all three: the rates, the incentives, and the setup. It is general information only, not advice, and award rates should be confirmed against the current award.
Published: July 2026
An apprentice or trainee is engaged under a formal training arrangement (a training contract registered with the relevant state or territory authority) combining paid work with structured training toward a qualification. Their pay is governed by the applicable modern award, which sets apprentice and trainee rates separately from the adult classification rates, and these rates are structured to rise over the course of the apprenticeship.
The rate an apprentice is entitled to typically depends on several factors: the year of the apprenticeship (rates step up each year as they progress), whether they are an adult apprentice (adult apprentices generally attract higher minimum rates than junior apprentices), whether the arrangement is school-based, and in some trades, competency-based progression (where advancing through competencies, not just time, moves the apprentice to the next rate). The practical consequence is that apprentice pay is a moving target: it changes as the apprentice progresses through years and competencies, and it changes with the annual award increases like everyone else’s, so an employer who sets an apprentice’s pay once and leaves it will underpay them as they progress. Trainees are treated similarly under the relevant training wage provisions, with rates that vary by the traineeship level, the year, and the trainee’s education level.
For wage floor context see minimum wage Australia. Model loaded employment cost with the employee cost calculator and can I afford this hire.
A junior electrical apprentice starts at an award year-one rate equivalent to about $28,000 a year. Payroll is set once. After 12 months the apprentice enters year two, which steps the rate to about $33,000 (illustrative). Payroll is never updated for 9 months. Shortfall is roughly $5,000 × 9/12 ≈ $3,750, plus super about $450. Across two apprentices with the same miss, the business is near $8,000 of quiet underpayment before interest. Progression tracking is not optional.
The reason apprenticeships are more affordable than the headline wage suggests is the range of employer incentives, which have varied over time and by trade priority, but commonly include:
A plumbing business hires a first-year apprentice. Award wage cost about $30,000. Super and other on-costs add roughly $5,000. Gross employment cost about $35,000. Commencement and later milestone incentives total $8,000 over the apprenticeship (illustrative, check current programs). State payroll tax exemption on apprentice wages saves about $1,500 a year for a business already over threshold. Net year-one cost can sit nearer $25,000 to $28,000 rather than the headline wage-plus-on-costs figure. Missing the incentive claims leaves $8,000 on the table. See also actual cost of hiring in Australia.
Because these incentives shift with government policy and skills priorities, the specific incentives available for a given apprentice, trade and state at a given time need to be checked against current programs rather than assumed. But the general point holds: the true cost of an apprentice is the award wage minus a stack of incentives and favourable treatments, which is often materially less than the wage alone suggests.
Apprentices and trainees carry setup requirements beyond a standard employee, and missing them causes both compliance and incentive problems.
Apprentice and trainee arrangements reward attention on two fronts: paying correctly (the progression-based rates kept current as the apprentice advances and as awards rise) and capturing the offsets (the incentives, subsidies and favourable payroll tax treatment that make the arrangement affordable). Both are easy to get wrong: underpayment through un-progressed rates, and lost money through unclaimed incentives. Both sit in the finance and payroll function’s lane. The reliable approach sets the apprentice up on the correct award classification with progression built in, tracks and applies each step-up, handles super and entitlements correctly, and administers the incentive claims at the right milestones so none are missed. That combination is exactly the coordinated payroll-and-finance handling an embedded HR and finance team provides. Because award rates and incentive programs change and are trade and state specific, the current rates and available incentives should be confirmed against the relevant award and current government programs, or with an adviser.
Hypothetical electrical contractor with two junior apprentices starting six months apart.
If payroll updates both apprentices only at each 1 July award increase and never on anniversary progression, each apprentice can sit one band low for months. A $5,000 annual band gap for eight months is about $3,333 primary underpayment per apprentice, plus super. Two apprentices: roughly $6,700 plus super before interest. Across three years of sloppy progression, remediation can exceed $15,000 even without hostile intent.
Incentive side. If commencement and midpoint incentives total $8,000 per apprentice but claims are late or incomplete for one, the business leaves $8,000 on the table while still carrying full wage cost. Net: underpaying people and under-claiming offsets at the same time, the worst of both failures.
Interpretation. Put progression dates in the payroll calendar the day the training contract is signed. Treat incentive milestones like BAS due dates: diarised, owned, evidenced.
Hire an apprentice when you can supervise training, have multi-year work visibility, and will run progression and incentives properly. Model true net cost after incentives, not headline wage alone. Tools: can I afford this hire and employee cost calculator.
Hire a qualified tradesperson when the job needs immediate productivity and you cannot absorb training time. Higher wage, lower training overhead, different retention dynamics.
Delay hiring and upskill later when supervision capacity is the constraint. A failed apprenticeship (poor supervision, churn, incomplete claims) is expensive training theatre.
Expensive option: take on three apprentices for the incentive headline without a supervisor plan. Practical option: one or two well-supervised apprentices with clean payroll progression and claimed milestones.
Payroll tax. Some states exempt or rebate apprentice and trainee wages. If you are over threshold, missing the exemption is pure cost. Confirm the state rule and the reporting code in your payroll tax return. Context: payroll tax Australia and state-by-state payroll tax thresholds.
Superannuation. Apprentices attract super on ordinary time earnings like other employees. Under Payday Super, contributions follow each pay run. Wrong rates create both underpayment of wages and wrong super.
Leave. Annual leave and personal leave accrue on the applicable rates. When progression lifts the rate, future leave is more expensive; provisioning should not assume year-one rates forever.
Allowances and overtime. Awards still apply. Apprentices are not a flat annual stipend outside award rules unless a lawful annualised arrangement says otherwise and is maintained correctly.
Bookkeeping for trades employers: bookkeeping for trades and construction Australia.
Days 1 to 30. Audit every apprentice and trainee for training contract status, award classification, year/stage and current rate. Diarise next progression dates and incentive milestones.
Days 31 to 60. Correct any underpaid progression with back pay and super. Lodge any missed incentive claims still eligible. Confirm payroll tax treatment for your state.
Days 61 to 90. Build a standing progression and incentive calendar into payroll month-end. Model true net cost of the next apprentice hire before you sign another training contract. Apprenticeships reward disciplined employers; they punish set-and-forget payroll.
How are apprentice wages set?
By the applicable modern award, which sets apprentice rates separately from adult classification rates and structures them to rise as the apprentice progresses. The rate depends on the year of the apprenticeship, whether the apprentice is an adult or school-based, and in some trades competency-based progression, plus the annual award increases.
Why do apprentice rates change over time?
Because they are progression-based: they step up each year as the apprentice advances, sometimes as competencies are completed, and they also rise with the annual award increases. An employer who sets an apprentice’s pay once and leaves it will underpay them as they progress, which is a common source of underpayment.
What incentives are available for employing an apprentice?
Commonly government employer incentive payments (often paid at commencement, continuation and completion milestones for eligible occupations), wage subsidies at various times, support payments for the apprentice, and favourable payroll tax treatment in some states. These change with government policy and skills priorities, so current eligibility must be checked.
What is the true cost of an apprentice?
Often materially less than the headline wage, because the award wage is offset by employer incentives, any available wage subsidies, and favourable payroll tax treatment in some states. The real cost is the wage minus that stack of offsets, which is why apprenticeships are more affordable than the wage alone suggests.
What payroll setup does an apprentice need?
A properly established and registered training contract, correct award apprentice classification and year mapped in payroll with progression built in, active tracking of year and competency step-ups, correct superannuation and leave handling, and administration of incentive claims at the right milestones. Missing the progression setup is where underpayment creeps in.
What is the most common apprentice pay mistake?
Setting payroll to the year-one rate and never advancing it, which underpays the apprentice from the moment they enter the next year. Progression must be actively tracked and applied. The second common mistake is failing to claim the incentives the business was entitled to.
Do apprentices get superannuation and leave?
Yes. Apprentices and trainees accrue superannuation and leave entitlements like other employees, calculated on their applicable rates, which payroll must handle correctly alongside the progression-based wage.
Are adult apprentices paid more?
Generally yes. Awards typically set higher minimum rates for adult apprentices than for junior apprentices. Check the specific award tables rather than assuming a junior rate applies.
Do trainees follow the same rules as apprentices?
Similar structure under training wage provisions, but rates and progression depend on traineeship level, year and education level under the relevant award. Do not copy an apprentice setup onto a trainee without checking the instrument.
Is this advice?
No. This is general information. Apprentice and trainee award rates and incentive programs change and are trade and state specific, so current rates and available incentives should be confirmed against the relevant award and current government programs, or with a qualified adviser.
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We review and check this guide periodically. At the time of writing (July 2026), all information was current. Scale Suite is a registered BAS Agent, not a licensed tax advisor or financial advisor. This content is general information only and does not constitute professional tax, financial, or legal advice. Some details may change over time.
Scale Suite is a Sydney-based provider of outsourced finance and HR services for Australian SMEs. We deliver bookkeeping, financial reporting, payroll processing, fractional CFO support, recruitment, employee onboarding, people and culture support, and fractional HR oversight, all as a fully embedded team that works inside your business.
Employment Hero Gold Partner, CA-qualified, and Xero Certified, we replace fragmented finance and HR processes with one responsive, senior-level function at a fraction of the cost of full-time hires. We serve growing businesses across Sydney, Melbourne, Brisbane, and Perth, with packages starting from $1,500 per month and no lock-in contracts.
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