AUSTRALIAN MPs are among the best paid in the world after pocketing a hefty pay rise earlier this month, new research shows.

Federal backbenchers take home $195,130 - almost double that earned by British MP's and nearly three times the national average full-time wage.

The average AFL player, however, pulls in about $251,559.

A report tabled in the British House of Commons this week as part of a proposal to index UK MP's annual wage increases to the growth in average earnings, shows that only Italian MP's earn more than their Australian counterparts.

Federal politicians pocketed a 2.4 per cent pay rise this month turning Prime Minister Kevin Rudd into Australia's first political half-million dollar man.

This was the third pay rise for Federal MPs in the past 16 months, delivering a salary boost of $54,220 or more than $1000 a week since March last year.

This increase in MP's pay was in return for losing perks such as global study trips and the closing down of the Gold Pass for retired members.

Opposition leader Tony Abbott's salary has risen to $360,990.

This is just below the $400,000 earned by US President Barack Obama but well above UK Prime Minister David Cameron, who earns around a paltry $235,000 compared to his counterparts.

Democratic Labor Party Senator John Madigan voted against the most recent pay rise in parliament and is handing it out in "grants'' to help manufacturing and farming programs.

"The pay rise is more than a lot of people earn annually. If I could give the pay rise back I would, but I can't,'' he said.

"My colleagues should be ashamed for taking this pay rise. They have no empathy or compassion for people doing it tough in the community. And even worse it means state parliaments have to increase their pay levels as well."

The average full-time Australian worker earns $72,436 a year.

Monash University Political scientist Dr Nick Economou said that while the Australian MPs would seem to be getting high wages it has to be compared to what they could earn in the private sector.

"Not many politicians do it for the money and if there wasn't decent money on offer then only the wealth would get involved in politics and that would be bad for democracy," he said.

The higher wages are also compensation for what is often a tough and very volatile job, Dr Economou said.

The strength of the economy means Australian MP's pay as a ratio of national GDP is only around 3 per cent - about mid-table in global terms.

The report from the British Independent Parliamentary Standards Authority also recommends the scrapping of perks such as resettlement allowances and much tighter management of out of pocket expenses claimed for meals and drinks.

The IPSA was established in response to the British parliamentary expenses scandal of 2009.

stephen.mcmahon@news.com.au