Employees working in Australia are entitled to minimum pay and employment conditions.
Minimum employee pay and conditions vary depending on:
- whether the employer and employee are in the national employment system or a state system
- whether an award or enterprise agreement applies
- the employment contract between the employer and employee — a contract can include rates of pay that are higher than the legal minimums.
There are additional laws for children and young people including junior pay rates, and state and territory laws that apply to children and young people who are working.
It is important to get minimum pay and conditions for employees right.
Mistakes can lead to penalties, fines, charges and backpay. In some cases, criminal sanctions may also apply for intentionally paying someone less than the applicable minimum wage.
Understanding minimum rates of pay
Minimum rates in awards and enterprise agreements
Minimum rates of pay are often set by awards or minimum wage orders.
They can also be set by enterprise agreements. Enterprise agreements are made between employers and employees, then approved by a workplace relations tribunal. Enterprise agreements are sometimes also called collective agreements, or registered or industrial agreements.
Awards and enterprise agreements often have different classifications levels (or grades) of work. An employee needs to be paid at least the minimum rate for their classification level.
The minimum rate of pay that applies can also depend on:
- the type of employment – casual employee, apprentice and trainee minimum rates are different
- age – for example, junior employees often receive a lower minimum rate
- work capacity – for example, employees who are covered by the Supported Wage System. The Fair Work Ombudsman has information about pay rates for employees with disability.
Minimum wages are often based on an hourly rate.
Casual employees receive a higher rate of pay – usually an additional 25% loading on top of the base rate set out in the award that applies to their work. Any other monetary entitlement, such as an overtime penalty or annual leave loading, is generally paid in addition to the minimum rate.
Minimum wages:
- are paid before tax
- exclude superannuation.
Minimum rates of pay set by awards and minimum wage orders are reviewed annually. Enterprise agreements also often include yearly wage increases. It’s important for employers to keep up to date with changes to the minimum rates to avoid underpaying their employees.
Understanding awards
Awards set minimum rates of pay and conditions for industries and jobs covered by them.
There are modern awards in the national employment system and state-based awards in the state systems.
If an employee is covered by an award, minimum pay and conditions often include:
- the applicable minimum rate, including any minimum rate for casual employees
- limits on ordinary working hours such as when those hours can be worked
- monetary allowances (specified tasks, conditions, or reimbursement for expenses)
- overtime including when it may be worked and overtime payments
- shift work including when shifts may be worked and shift work payments
- payment for working public holidays
- employer obligations around workplace consultation
- dispute resolution procedures
- leave arrangements that may apply in addition to leave entitlements in legislation
- termination of employment and redundancy.
Understanding enterprise agreements (or registered or industrial agreements)
An enterprise agreement is a registered workplace agreement between an employer and a group of employees. An enterprise agreement must be approved by a workplace relations tribunal before it applies.
Many enterprise agreements have minimum conditions that are similar to award minimum conditions. However, an enterprise agreement can tailor these conditions to suit the needs of the workplace.
The Fair Work Commission has information to help employers and employees in the national employment system make an enterprise agreement. The conditions in an enterprise agreement must result in employees being ‘better off overall’ than they would be under the award that would apply to them if the agreement didn’t apply to them. An enterprise agreement can't provide less that the National Employment Standards.
Some employers, such as some state or local government organisations, or some unincorporated entities in Western Australia, are covered by state workplace laws that may allow the making of state industrial agreements.
Understanding award-free and agreement-free employees
Sometimes an award or enterprise agreement may not apply in relation to a particular employee. For example, where an employee works in a managerial or specialist role not covered by a relevant award or enterprise agreement.
In these cases, the minimum terms and conditions of employment are generally set out in an employment contract in addition to minimum entitlements in legislation such as the National Employment Standards in the national system.
Where no award or enterprise agreement applies, a minimum wage is still required by both national and state systems. An employer can’t pay less than the minimum wage that applies to the employee.
Rates of pay in employment contracts
Employment contracts can set a rate of pay for an employee as long as the rate is the same or higher than the legal minimum rate that applies to the employee.
Employers and employees are free to negotiate a higher rate of pay than the minimum rate. If an employer and employee agree to a higher minimum rate in a contract, the employee will generally be entitled to the rate in their employment contract.
Learn more about employment contracts.
Working out employee minimum pay
To work out the right minimum pay for an employee, you need to:
Find the right pay rate
1. Work out which workplace relations system applies
The first step to working out the right pay rate for an employee is working out which workplace relations system applies to the employer.
It will be either:
- the national employment system
- a state employment system relevant where the employer and employee are.
Not sure? Learn more about which workplace relations system applies
2. Does an award apply to the employee?
This will either be a modern award (in the national employment system) or a state system award.
To be covered by an award:
- the employer must:
- be in an industry covered by an award, or
- employ an employee whose job is covered by an occupational award
- the employee must work in a job that is covered in a classification in the same award (and not in a job or industry that is excluded from the award).
If an award applies, then the minimum rates are set out in the award.
Awards usually include a classification structure that applies to the type of work and duties of the employees that the award covers.
Find the right classification level or grade, then look up the minimum rate that applies to it.
Award coverage for an administrative employee
Kai is an administrative assistant employed by a web design company. There is no industry award that covers Kai’s position as an administrative assistant. Instead, Kai is covered by the Clerks – Private Sector Award 2020. This is an award that covers clerical and administrative work.
Kai’s duties and level of responsibility fall within grade 3 of the classification levels in that award. Kai’s employer must pay Kai at least the weekly wage for a grade 3 employee.
3. Does an enterprise agreement apply to the business or organisation?
An organisation or business should know if it has an enterprise agreement. It will have negotiated with employees to make the agreement, and had it approved by a workplace relations tribunal.
Most enterprise agreements will set out the minimum rates of pay for the employees it covers.
An organisation or business may have an enterprise agreement that covers some but not all of its employees.
Check it to find the applicable minimum rate that applies to the type of work and duties of the employee.
Enterprise agreement classification for a lighting technician
Melody is employed by a production company as a lighting technician. They are covered by their employer's enterprise agreement.
The skill, competency and duties required for lighting technicians are classified at level 4 in their employer’s enterprise agreement.
The enterprise agreement sets out a minimum weekly wage for level 4 employees.
This is the minimum weekly wage Melody is entitled to.
4. If no award or agreement applies
If no award or enterprise agreement applies, then the employee must receive at least the national minimum wage or the state minimum wage.
Remember: A minimum wage is a minimum. Employers can pay employees above the minimum – they just can’t pay less.
Keep learning:
Add any other monetary entitlements
Awards, enterprise agreements and even employment contracts can include other monetary entitlements for employees.
For example, overtime payments for employees working more than their ordinary hours, or penalty rates for working certain irregular hours, such as shift work.
Understanding allowances
Allowances are payments for doing certain tasks, working in certain locations, using a special skill or for incurring expenses related to the employee’s job.
For example:
- Janina is appointed first aid officer and gets a first aid allowance
- Robert gets an allowance for performing nude
- Ramesh gets an allowance to cover his meals on tour
Understanding loadings, penalty or public holiday rates
Awards and agreements often set penalty rates or loadings for employees working irregular hours such as at night, on weekends or public holidays.
Weekend and public holiday pay rates can be in different clauses – it depends on the award or agreement. Be sure to check the penalty rates, weekend work and public holiday clauses to find the right rates.
For example:
- Aarti receives 15% extra pay when working between 8pm and midnight
- Taylor receives double their hourly rate when working on Sundays
Understanding overtime
Employees may receive an overtime payment if they work more than their ordinary hours or outside the times and days of ordinary hours set by an applicable award or enterprise agreement.
For example:
- Mendel is asked to stay back for 2 hours after his usual finishing time and gets time and a half (50% extra) for those extra 2 hours
- Ara’s part-time days are Monday to Wednesday. They get paid overtime rates for working an extra day on Thursday.
- Monique is a casual employee. She gets paid overtime rates when she works more than 38 hours per week.
To get pay right, employees must be paid:
- the minimum pay rate for the work they do and
- any applicable allowances, penalties, loadings and overtime pay.
Minimum employment conditions
Minimum employment conditions are generally set by legislation and awards (if an award applies). Enterprise agreements and employment contracts can also set employment conditions.
Common minimum employment conditions include:
- superannuation
- limits on ordinary working hours
- paid and unpaid leave entitlements
- conditions on termination of employment such as notice and redundancy
- rights to request flexible work arrangements for certain employees
- separate monetary entitlements, such as overtime penalties, allowances or loadings.
Keep learning:
Getting help with minimum employee pay and conditions
If you need help understanding minimum employee pay and conditions, there are lots of organisations that can help.
Most private sector employers and employees are in the national employment system. The national employment system also covers most employees in the Australian Capital Territory, Northern Territory and Victoria.
State government and some local government employees in other states are ususally covered by a state system.
In the national employment system
The Fair Work Ombudsman gives information and advice about pay and conditions for employers and employees in the national employment system. Most Australian employers and employees are covered by the national employment system.
- Visit their website at www.fairwork.gov.au
- Call 13 13 94
- Try their Get help tool
Small businesses can use their Employer Advisory Service for free tailored written advice on employee pay and entitlements.
In the Australian Capital Territory
Most employers and employees in the ACT are covered by the national employment system and can call the Fair Work Ombudsman for most enquiries about pay and conditions.
WorkSafe ACT can help with some entitlements. For example, long service leave.
In New South Wales
The New South Wales state system covers employers and employees in the state public sector and local government.
NSW Industrial Relations can give advice, policy and compliance information about workplace and employment matters for employers and employees in the NSW state system.
National employment system employers and employees in NSW can call the Fair Work Ombudsman.
In the Northern Territory
Most employers and employees in the NT are covered by the national employment system, and should call the Fair Work Ombudsman for most enquiries about pay and conditions.
NT public sector employees can also contact the Office of the Commissioner for Public Employment.
In Queensland
The Queensland state system covers employers and employees in the state public sector and local government.
Information services at the Office of Industrial Relations can give advice, policy and compliance information about workplace and employment matters for employers and employees in the Queensland state system.
National employment system employers and employees in Queensland can call the Fair Work Ombudsman.
In South Australia
The South Australian state system covers employers and employees in the state public sector and local government.
SafeWork SA has a Help Centre for wages and working conditions for state public sector and local government employees. Call 1300 365 255.
Some information about minimum standards an also be found on the South Australian Employment Tribunal website.
National employment system employers and employees in SA can call the Fair Work Ombudsman.
In Tasmania
The Tasmanian state system covers employers and employees in the state public sector.
WorkSafe Tasmania can give information and advice for employers and employees in the Tasmanian state system. Call 1300 366 322.
National employment system employers and employees in Tasmania can call the Fair Work Ombudsman.
In Victoria
Most employers and employees in the Victoria are covered by the national employment system and can call the Fair Work Ombudsman for most enquiries about pay and conditions.
The Wage Inspectorate of Victoria can help Victorian employers and employees with questions about long service leave and child employment.
In Western Australia
The Western Australian state system covers employers and employees in the state public sector and local government.
It also covers sole traders, partnerships, and other unincorporated entities and non-trading corporations in Western Australia.
Wageline Western Australia can give advice and information to employers and employees in the Western Australian state system. Call 1300 655 266.
National employment system employers and employees in WA can call the Fair Work Ombudsman.
More in this section:
About employment relationships
There are different types of employment relationships in the creative industries. Being an employee is different from being an independent contractor, a volunteer or an unpaid intern. It is important to know the difference.
Employment offers and contracts
An employment offer or contract sets out the rights and obligations of an employer and an employee in an employment relationship. Employment offers and contracts must meet legal minimum standards.
