Get advice on employee wages with Wage Line

With more than 120 Modern Awards, calculating employee pay correctly can be challenging

This is especially the case if you have full-time, part-time and casual employees, apprentices at different stages of their training, or junior employees.

As an employer, you’re responsible for ensuring your employees are paid correctly, on time, and receive their full entitlements. You also need to be aware of overtime rates, penalty rates, public holiday rates, loadings and allowances.

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What is the Minimum Wage?

The National Minimum Wage is the minimum amount an employee must be paid for their ordinary hours of work. It is reviewed and set each year by the Fair Work Commission and generally applies to employees who are not covered by an award or enterprise agreement. Award-covered employees are entitled to the applicable minimum rate under their award.

Minimum wages are reviewed annually under the Fair Work Act 2009 (Cth), with increases to award minimum wages also flowing through to some penalty rates, overtime rates and allowances.

Some employees may have a different minimum wage depending on factors such as their employment type, age, classification or work capacity. For example, different minimum rates may apply to apprentices and junior employees.

If you have questions about the minimum wage or are unsure of the correct award wage for your employees, call Peninsula’s Wage Line for free initial expert advice.

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Apprentice wages

Paying an apprentice may not be as simple as paying other employees. This is because their rate of pay can depend on several factors and considerations, including:

The applicable award.
Age. An adult apprentice is generally an apprentice who is 21 years or older when they start their apprenticeship.
The terms and conditions of their registered training agreement.
The length or duration of the apprenticeship.
How much of the apprenticeship or training they have completed.
Whether they are a school-based apprentice.
The qualification or apprenticeship being undertaken.

How these factors affect an apprentice’s wage will ultimately depend on the provisions of the relevant award, enterprise agreement or other applicable industrial instrument.

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Pay rates for traineeships

Pay for most award-covered trainees completing certificate-level qualifications is based on the National Training Wage Schedule in the Miscellaneous Award, although some trainees receive their pay and conditions from their applicable industry or occupational award. Other entitlements, such as overtime, penalty rates and allowances, may come from the industry or occupational award that applies to them.

Trainees may be:

Full-time: A trainee employed under a training contract on a full-time basis.
Part-time: A trainee employed under a training contract on a part-time basis.
School-based: A trainee who undertakes a traineeship while still attending secondary school.

Peninsula’s Wage Line can provide you with free initial specialist advice on paying your employees the right wages and entitlements.

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What are penalty, overtime and shift loading rates?

Penalty rates are higher pay rates that employees may be entitled to for working particular hours or at particular times, such as weekends, public holidays, late nights or early mornings. Whether they apply, and the applicable rate, will depend on the award or enterprise agreement covering the employee.

Penalty rates may apply when an employee works:

Weekends.
Public holidays.
Late nights.
Early mornings.

Overtime may apply when an employee works:

More than their ordinary hours.
Outside the ordinary hours specified by their applicable award or enterprise agreement.
In other circumstances where their applicable award or enterprise agreement requires overtime to be paid.

You should regularly check award updates and ensure payroll is applying the correct rates and entitlements for your employees.

Many businesses rely on shift workers to keep things running seamlessly 24 hours a day, 7 days a week. Some roles that may involve shift work include customer service, hospitality, healthcare, manufacturing, road construction, transportation, infrastructure maintenance and security.

Shifts can include:

Morning shifts.
Afternoon shifts.
Night shifts.

Depending on the applicable award or enterprise agreement, entitlements can include overtime rates, penalty rates, shift loadings, annual leave loading and allowances.

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Payday Super

Introduced on 1 July 2026, Payday Super requires employers to pay super guarantee contributions for each payday, rather than on the previous quarterly cycle.

An employee’s super guarantee contribution generally needs to be received by their super fund within 7 business days after payday. For the first contribution for a new employee, a longer timeframe of 20 business days after the relevant payday applies.

With the introduction of Payday Super, the previous quarterly payment cycle for super guarantee contributions no longer applies to earnings paid from 1 July 2026.

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Deductions

When processing payroll, there are circumstances where deductions can be made from an employee’s pay. However, deductions must be permitted under workplace laws, an applicable instrument or another law, or be validly authorised by the employee where required.

Deductions can include:

Child support deductions.
Deductions required by a court order or other law.
Salary sacrifice arrangements.
Additional voluntary superannuation contributions.
Union or professional association fees.
Health insurance payments.
Charitable donations.

It’s important to include any required deductions clearly on the employee’s payslip. A payslip must be provided to an employee within the required timeframe for each payment of wages.

An employee may be able to withdraw a written authorisation for a deduction by giving written notice, subject to the applicable rules and arrangements.

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Final pay

Final pay is the payment of outstanding wages and accrued entitlements when employment ends. Depending on the circumstances, it can include annual leave, annual leave loading, long service leave, payment in lieu of notice and redundancy pay.

An employee’s final pay may include:

Outstanding wages for hours they have worked, including applicable penalty rates and allowances.
Accrued annual leave, including annual leave loading where applicable, and accrued or pro-rata long service leave where applicable under the relevant state or territory legislation.
Payment in lieu of notice, where applicable.
Redundancy pay, where applicable.

Unused paid personal/carer’s leave is generally not paid out when employment ends, unless an applicable award, enterprise agreement or employment contract provides otherwise.

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Wage theft

Intentional underpayment of employee wages or entitlements can be a criminal offence under the Fair Work Act. The criminal underpayment offence commenced on 1 January 2025 and does not apply to honest mistakes.

An employer may commit an offence where they are required to pay an amount to or for an employee and intentionally engage in conduct that intentionally results in the amount not being paid in full on or before it is due. This can include wages and certain entitlements such as penalty rates, overtime and allowances.

The Voluntary Small Business Wage Compliance Code provides protection from referral for criminal prosecution by the Fair Work Ombudsman where a small business employer has complied with the Code in relation to an underpayment. A small business employer generally has fewer than 15 employees. However, complying with the Code does not prevent other enforcement action or civil penalties from applying.

Underpayment of employee wages can be a costly mistake. If you have miscalculated and underpaid an employee, Peninsula’s Wage Line can provide free initial specialist advice on correcting the error.

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How Peninsula can help

If you’re unsure of the correct pay rate and entitlements for your employees, Peninsula’s Wage Line provides free initial expert advice to help you avoid potentially costly mistakes.

Call now 1300 838 427

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This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.

Australia has one of the most complicated pay structures in the world

With more than 120 Modern Awards, calculating employee pay correctly can be challenging

This is especially the case if you have full-time, part-time and casual employees, apprentices at different stages of their training, or junior employees.