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Average vs Median Salaries – What’s the Difference?

Often when you read about careers, you’ll see an average salary listed somewhere in the information. While that’s not a bad thing in any way, it can often shape your view of what a job is like. You might make assumptions about:

  • How hard it is
  • What qualifications you’ll need
  • How prestigious it is
  • If it’s going to make you happy

And you could be making those assumptions based purely off the figure you see in front of you. It’s not the best way to gauge careers that might suit you down the track, and it might not even be all that accurate. Here’s why…

Let’s look at some examples

In November 2022, the Australian Bureau of Statistics published that the average salary in Australia was $1,807 a week, or $93,964 a year.

Which sounds great, right? But the median salary reported in the same period was $1,250 per week, which is around $65,000 per year.

That’s a massive difference of $28,964 per year.

And the chances are if you asked any adults around you what they are earning, the majority would be clustered nearer to the $65,000 mark – so it’s more realistic too.

When you look at reported weekly earnings by industry from the ATO, there’s a big discrepancy between many of the average and median figures:

Occupation Average Weekly Earnings $ Median Weekly Earnings $
Mining 2,811 2,497
Financial & Insurance Services 2,201 1,700
Construction 1,786 1,380
Education & Training 1,905 1,299
Health Care & Social Assistance 1,763 1,150
Arts & Recreation Services 1,647 1,000
Retail Trade 1,353 800

Why are the figures so different?

 Basically, it all comes down to maths and the way that the figures are calculated.

The ABC have an easy to understand example:

“Imagine there are 10 people in a room: nine of them earn $10,000 a year, and one of them earns $500,000 a year. What’s the average?

Altogether, they earn $590,000 in a year. So the average income in that room would be $59,000 ($590,000 divided by 10 people).”

In this case, the one lucky person who’s earning $500,000 pushed the average way up, but it’s not really a true reflection of what the “average” person is earning.

The median refers to the exact middle of a set of numbers. The first step to calculate the median would be to list all the salaries to be considered in an increasing order, i.e. starting from the lowest to the highest.

If the number of salaries is odd, then the median would be the salary figure in the middle of the list. If the number of salaries is even, the middle two salary figures are added together, and the sum then divided by two to determine the median salary.

So, in the scenario above the median salary would be $10,000, which is much more reflective of what most people in the room are earning.

What this means for you

It means than when you’re looking at potential careers, it’s best to look at median salaries for a more realistic idea of what you could be earning.

There’s no doubt that salary is going to be an important part of your career, but it’s just one aspect. It’s really important when you’re thinking about future careers and career pathways to focus on what you’re good at and what you’ll enjoy doing.

You can find more resources about the world of work on our website here.

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