Arya News - Bhutan’s national minimum wage is Nu 215 (US$2.51) per day, over 50 times lower than that of Australia`s.
THIMPHU – Bhutan’s national minimum wage is over 50 times lower than that of Australia, raising questions about wage-setting frameworks and economic equity. As of July 2024, Australia’s Fair Work Commission set the national minimum monthly wage at approximately Nu 351,000.
In contrast, Bhutan’s stands at Nu 6,450 per month.
The National Wage Rate is the minimum wage at the national level below which a worker cannot be paid but does not restrict employers from paying over and above.
The Fair Work Commission, an independent body under the Australian government, reviews wage levels annually through extensive consultations with workers, businesses, and economic experts. It bases decisions on factors such as inflation, cost of living, employment trends, and overall economic conditions.
Australia’s current minimum wage is AUD 24.10 per hour which is equivalent to Nu 1,301.4, translating to AUD 915.90 (Nu 49,458.6) per week for a standard 38-hour work week. This approach is widely regarded as a global benchmark for progressive wage policy, balancing worker welfare with economic competitiveness.
In July 2024, the Commission raised the wage by 3.75 percent.
Bhutan’s national minimum wage is Nu 215 per day.
However, most unskilled workers in both urban and rural areas typically earn around Nu 1,000 per day, more than double the official minimum.
Despite this, the national wage rate still holds legal significance—it is used to calculate fines, penalties, and child alimony under Bhutanese law.
Following an official visit to Australia, Dr Tshering Cigay reflected on the country’s wage-setting model in a personal blog. He highlighted Australia’s transparent framework, effective industrial relations system, and strong social protections as key components in maintaining high wages without undermining business growth.
“Australia maintains one of the highest minimum wage rates globally without compromising economic stability or business growth,” he said.
Dr Cigay suggested Bhutan could benefit from decoupling its wage policy from its Penal Code. In Australia, legal penalties are based on a “penalty unit” system, where each unit carries a set monetary value independent of wages. He proposed a similar structure for Bhutan, allowing legal penalties to be fixed in Nu terms rather than linked to the minimum wage.
The stark difference in living costs further underscores the wage disparity. In Thimphu, monthly rent for a bachelor apartment ranges between Nu 8,000 and Nu 10,000. Two to three-bedroom units typically cost Nu 12,000 to Nu 15,000.
In comparison, rent in Perth, Australia averages Nu 27,000 (AUD 500) per week for a two-bedroom apartment and can go up to Nu 43,200 (AUD 800) for a four-bedroom unit. Bhutanese residents in Australia often share housing to manage these costs.
Inflation also plays a critical role in shaping wage policies. Australia’s inflation rate stood at 2.4 percent in December 2024, according to the Australian Bureau of Statistics. In Bhutan, the National Statistics Bureau reported a higher inflation rate of 2.82 percent during the same period, rising to 3.38 percent by February 2025. Both food and non-food prices have seen an upward trend.
As of 2025, an estimated 64,000 Bhutanese have migrated to Australia, drawn by better wages, education, and economic opportunities.
The contrast in wage-setting models offers valuable lessons for Bhutan as it grapples with inflation, labour rights, and economic development.