Omari Gates
Australia's employment statistics are an important indicator of the country's socio-economic status. The levels of full or part-time employment, unemployment, and labour force participation reflect the strength of the economy and the social characteristics of the population. Various factors influence employment rates, including age structure, the economic base, employment opportunities, and the population's education and skill levels. Australia has been working towards full employment, a longstanding monetary policy objective, and its employment data is a key metric for interest rate settings. As of December 2025, Australia's unemployment rate stood at 4%, with a participation rate of 67.1%.
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What You'll Learn
Labour force participation rate
The labour force participation rate is a key economic indicator, representing the percentage of the total population over 15 that is part of the labour force. In 2021, the labour force participation rate in Australia was 61.1%, while in Queensland, it was slightly higher at 61.6%. The number of people in the labour force in Queensland increased by 11.7% between 2016 and 2021, with 2,444,088 people employed in the state in 2021.
The Australian Bureau of Statistics (ABS) conducts a monthly Labour Force Survey to estimate employment, unemployment, and participation rates. The survey collects data on various demographic and economic aspects, including employment trends, gender and age distribution, and recruitment trends. The latest survey data from March 2025 indicates an increase in employment by 0.1% from the previous month, with a total of 14,567,200 employed people.
The COVID-19 pandemic significantly impacted employment rates, causing large month-to-month changes and multiple trend breaks. The pandemic and associated lockdowns in 2021 also affected the Census data, increasing the proportion of people employed but away from work in the week before the Census.
Labour market assessments are crucial for understanding full employment and spare capacity. The RBA's models, such as NAIRU and NAIRLU, consider wage outcomes, inflation, and productivity growth to estimate labour market gaps. These models help assess the probability of spare capacity in the market, indicating whether the unemployment and underutilisation rates are above their sustainable levels.
Overall, the labour force participation rate in Australia has shown fluctuations, with variations between different states and territories. The COVID-19 pandemic and economic shifts, such as the growth of service industries, have influenced employment trends and labour market dynamics in recent years.
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Unemployment rate
Australia's unemployment rate has fluctuated in recent years, influenced by factors such as the COVID-19 pandemic, economic shifts, and labour market dynamics. As of March 2025, the Australian Bureau of Statistics reported an overall increase in employment, with a net gain of 13,900 people employed, representing a 0.1% increase. This rise in employment suggests a positive direction towards lowering the unemployment rate.
The underemployment rate in Australia has shown an upward trend over time. This trend coincides with structural changes in the economy, such as the growing employment share in service industries and labour market reforms affecting working hours. As of May 2024, there were approximately 14.5 million employed people in Australia, with 1.7 million classified as underemployed. This underemployment figure represents individuals who are employed but desire additional work hours.
Labour force participation rates also impact unemployment figures. Queensland, for example, had a higher labour force participation rate than the national average in 2021, at 61.6% compared to Australia's 61.1%. During the same year, 2,444,088 people in Queensland were employed, with 59% working full-time and 32% working part-time.
While unemployment rates provide valuable insights into the job market, they do not capture all dimensions of labour market dynamics. Other factors, such as underemployment, labour force participation rates, and structural changes in the economy, also play crucial roles in understanding the overall employment landscape in Australia.
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Underemployment rate
Underemployment refers to the percentage of people who are employed but are not getting as many hours as they would like. As of May 2024, there were 14.5 million employed people in Australia, 1.7 million of whom were underemployed. This means the underemployment rate at the time was around 11.7%. Almost half of the underemployed part-time workers (49%) preferred to work full-time hours.
The underemployment rate is up slightly from historic lows, sitting in the low 6% range as of April 2025. This increase is due to the volatility of the ABS labour force survey since the end of the Covid pandemic. Changing trends in employment and the timing of when people start and leave jobs have made it challenging for the ABS to account for these fluctuations in its seasonal adjustments.
The participation rate reflects the percentage of the civilian population aged 15 years and older who are either employed or actively looking for work. In Australia, about two-thirds (67%) of people who can work are participating in the labour force. This rate is higher than that of other developed countries such as Canada, the United Kingdom, and the United States.
A higher participation rate can have both positive and negative effects on the unemployment rate. On the one hand, it increases the pool of people in the labour force seeking employment, which can push the unemployment rate up. On the other hand, it can put downward pressure on wages growth due to the larger and more competitive talent pool.
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Part-time employment
As of March 2025, the total number of employed people in Australia was 14,567,200. While the data does not specify how many of these workers are part-time, we do know that 1.7 million people were underemployed in May 2024, with about half of those underemployed part-time workers preferring to work full-time hours.
Part-time workers in Australia are legally entitled to a minimum hourly wage of 24.10 AUD, the same rate as full-time workers. This is higher than the minimum wage in the United States and the United Kingdom. Australian employers are also required to contribute to the superannuation of their workers, whether they are full-time or part-time.
On average, Australian employees can expect to receive salary growth of 8% every 16 months. However, this figure varies across different industries and can be changed by the specific employment contract.
The most common reason for not wanting a job in Australia is being "satisfied with current arrangements", which was reported by 38% of respondents in one survey.
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Employment trends
Diving into regional variations, Queensland exhibited notable employment trends. In 2021, Queensland had a higher labour force participation rate than the national average, with 61.6% compared to Australia's 61.1%. Between 2016 and 2021, Queensland witnessed a substantial increase in employment, with 307,636 more people employed, while unemployment decreased by 36,948. This resulted in a notable 11.7% growth in the labour force. By 2021, 2,444,088 people in Queensland were employed, with 59% working full-time and 32% working part-time.
The impact of the COVID-19 pandemic on employment trends was significant. The 2021 Census data revealed that due to the pandemic and lockdowns, the proportion of people employed but away from work in the week before the census increased. This highlighted the disruption caused by the health crisis to the labour market. Additionally, natural disasters, such as ex-Tropic Cyclone Alfred and major flooding events in New South Wales and Queensland in March 2025, further impacted the collection of labour force data, resulting in lower response rates in affected regions.
Looking at broader trends, the underemployment rate in Australia has shown an upward trajectory over time. This increase in underemployment has coincided with structural changes in the economy, including a shift towards a greater share of employment in service industries and labour market reforms. These reforms have granted businesses more flexibility in adjusting employee working hours. As of May 2024, of the 14.5 million employed individuals, 1.7 million were underemployed, with nearly half of these part-time workers preferring full-time hours.
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Frequently asked questions
The employment rate in Australia varies and is impacted by factors such as the COVID-19 pandemic, natural disasters, and structural changes in the economy. As of March 2025, the number of employed people in Australia was approximately 14,567,200.
The employment rate in Australia has fluctuated over time, with monthly and quarterly surveys conducted by the Australian Bureau of Statistics showing changes. Between 2016 and 2021, Queensland experienced an increase in employment, with 2,444,088 people employed in 2021. In May 2024, there were 14.5 million employed people, with 1.7 million classified as underemployed.
The employment rate in Australia is influenced by various factors, including labour market dynamics, economic shifts, and demographic changes. For example, the COVID-19 pandemic caused large month-to-month variations, and natural disasters like cyclones and flooding can impact data collection and employment numbers. Additionally, structural changes, such as the growth of service industries and labour market reforms, play a role in employment trends.
