“Are indigenous employees working 2 months per year for free?”: report reveals large, persistent and economy-wide pay gap

“For years we have been told this gap is due to education, experience, hours, and the typical jobs our mob end up in. But the pay gaps are greatest in highly qualified professional and managerial roles, and Indigenous workers at almost every level of education are earning less than other Australians,” Professor Young said.

Finance and Technology sectors concerning

The Report identifies Finance and Insurance, as well as Technology, as high-risk sectors.

Roles in Finance and Insurance, and in Technology, feature prominently among those with the largest pay gaps, with average hourly disparities often ranging from 17% to 40%.

Seven Finance and Insurance occupations sit within the top 50 largest gaps, with average hourly differences ranging from 18% to 33%.

In addition, Information and Communication Technology sales professionals record an extreme average hourly gap of around 40% per hour.

All age groups affected

Pay gaps are evident across virtually all age groups, which indicates that experience alone does not explain the disparity.

At virtually every stage of working life, Aboriginal and Torres Strait Islander workers are paid less on average than non-Indigenous workers, with the gap most pronounced during the prime earning years of 30 to 59.

Professor Young pointed that, “Age is not a major factor, and job type and hours worked account for less than 30% of the average hourly pay gap. What remains is the structural racism that keeps Indigenous workers’ wages low, limits their career progression, and compounds disadvantage.”

Serious implications for Australian economy

IBA Chief Economist Dr Siddharth Shirodkar, who leads the Office of the Indigenous Economy, said the report provided a much-needed quantification of the Indigenous Pay Gap, and has serious implications for Australia’s economy at large.

“The report’s findings will come as no surprise to many Indigenous Australians, but critically provide an initial benchmark that quantifies the lived experience of many," Dr Shirodkar said.

"The Aboriginal and Torres Strait Islander population is younger and growing faster than the rest of the country so, if nothing is done now, a growing share of Australia’s future workforce will walk into a labour market that underpays it. That has consequences for Indigenous people, particularly Indigenous women, but also affects Australia’s overall economic activity."

“The sectors where Australia will most need workers over the next decade show sizeable pay gaps. Aged and disability care, nursing support, and technology are all facing shortages, and all of them underpay Aboriginal and Torres Strait Islander workers.

“More worryingly, there is also evidence in the report to suggest that the Indigenous Pay Gap may have been widening over the last decade.

“Lower wages across a working life mean lower superannuation balances and heavier reliance on the age pension. Governments are investing heavily in Indigenous employment through Closing the Gap, and those employment targets are undercut if the people who do find work are paid less than their colleagues across their working lives.”

Addressing structural and systemic racism necessary to achieve indigenous pay parity

The Report suggests that the indigenous pay gap is not fully explained by the numbers of hours worked, occupation choice, age or education.

Instead, the gap is more likely due to structural and systemic factors such as:

• the legacy of a discriminatory wage setting
• racial bias across recruitment, wage setting and promotion, perpetuated by low levels of racial literacy among human resource practitioners
• limited positional power Aboriginal and Torres Strait Islander workers hold to negotiate starting salaries, pay increases and promotions
• the widespread expectation that Aboriginal and Torres Strait Islander workers perform unpaid cultural work
• inflexible workplace practices that disrupt employment continuity and promotion prospects
• geographic labour market constraints
• the greater use of employer discretion in higher paid roles.

Recommendations for change

The Report makes 5 recommendations to “create fair pay, secure employment, and systemic change to strengthen the Indigenous economy and Australia’s long-term prosperity”.

Source: Indigenous Business Australia, Landmark new research reveals economy-wide 16% Indigenous pay gap [media release], 24 September 2026, accessed 24 September 2026.

Other sources:

• Indigenous Business Australia Website, Towards Indigenous Pay Parity research paper, 24 September 2026, accessed 24 September 2026.
• UTS Centre for Indigenous People and Work and Indigenous Business Australia, Towards Indigenous Pay Parity: understanding and creating Indigenous Pay Parity in Australian workplaces, September 2026, accessed 24 September 2026.