Penalty Rates: What You Need To Know

Whether you get penalty rates can depend on your award, industry and employment agreement or classification. However, there are still standard minimum rules that apply to employers under the Australian law.

The main thing that varies is the way in which your penalty rates are calculated – which depends on your award. First, we’ll start by explaining the situations when penalty rates can apply to you as an employee.

Employees can get paid a higher rate when working:

  • weekends
  • public holidays
  • overtime
  • late night shifts
  • early morning shifts

Employees can also get paid allowances when are required to:

  • do certain tasks or have particular skills
  • use their own tools or equipment
  • work in dangerous or uncomfortable conditions

You can expect an allowance when you require:

  • uniforms
  • tools and equipment
  • travel and fares
  • car and phone
  • first-aid

When Am I Not Eligible for Penalty Rates?

Certain work arrangements do not guarantee employees penalty rates, such as salary pacakages, employment contracts and other more fixed, longer term employment situations.

How Penalty Rates are Calculated

There are three different ways employers can calculate penalty rates. Once again, your award usually determines the way in which your penalty rates are calculated.

  • Default method

base rate + (base rate x casual loading) + (base rate x penalty)

  • All-purpose approach

(base rate + casual loading) x penalty

  • No Casual Loading

base rate + penalty

Penalty rates can be a complicated and scary topic to approach on your own. Our advice at Fix My Pay is to firstly join the FMP Facebook page, where you are able ask any work/employment related question in a safe environment and open forum with other employees like you. Also we have an enquiry page to send any questions you may have.

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