Penalty Rates: How They Work in Australia
From the first full pay period starting on or after 1 July 2026 the national minimum wage is $26.44 per hour, but penalty rates are not set by that national figure. They come from your modern award or enterprise agreement, and they change with your classification, employment type, the day and the time of day you work.
This guide explains how penalty rates work, who gets them, how to check a payslip and what employers must record. We link to the Fair Work Ombudsman pay guide because the percentages differ from award to award.
- Penalty rates are extra pay for ordinary hours worked at set times such as weekends, nights and public holidays, and the percentages come from the award or agreement, not the law in general.
- The Fair Work Ombudsman publishes a free pay guide for each award, and the Fair Work Infoline on 13 13 94 can help you confirm a rate for your classification.
- Modern award minimum rates rose 4.75% from the first full pay period starting on or after 1 July 2026, so check that payroll updated the base rate your penalties are built on.
- Employers must give payslips within 1 working day of payday and keep time and wage records for 7 years, which is how penalty hours are shown and proved.
Penalty rates: rates and rules
There is no single national penalty rate. The table shows the common categories and where the real figure sits, so you never rely on a number from the wrong award.
| Category | What the rule says | Where to find the figure |
|---|---|---|
| Saturday work | Many awards pay a higher rate for ordinary hours worked on a Saturday, but the percentage and the hours it covers vary by award. | Pay guide for your award, under weekend penalty rates |
| Sunday work | Sunday rates are often higher than Saturday rates, and some awards treat full-time, part-time and casual staff differently. | Pay guide for your award, by classification and employment type |
| Public holiday work | Public holiday penalty rates come from the award or agreement. Casuals are paid only if they work the day. | Pay guide for your award, under public holiday rates |
| Evening, night and early-morning work | Some awards add a loading for ordinary hours outside a set day-time window, and the window differs by industry. | Pay guide for your award, under shift or time-of-day loadings |
| Casual loading | The casual loading is 25% under most awards and for award-free casuals, and the award decides how it combines with a penalty. | Pay guide for your award, plus the casual rate of $33.05 per hour if no award applies |
| Base rate | Penalties are built on the base hourly rate for the classification, which rose 4.75% under modern awards from the same July date. | Pay guide for your award and classification |
Who penalty rates apply to
Most private-sector employees are in the national system under the Fair Work Act 2009 (Cth), so an award or enterprise agreement decides their penalties. NSW state public sector and some local government employees sit in the NSW state system, so check which one covers you first.
| Employment type | How penalty rates usually apply |
|---|---|
| Full-time | Penalties apply to ordinary hours worked at the times the award names, within the 38 ordinary hours a week standard. |
| Part-time | The same penalty percentages as a full-timer in the same role, with the agreed hours and any minimum shift length set by the award. |
| Casual | The award base rate plus the casual loading, plus any penalty the award requires. Some awards fold the two together, so read the pay guide closely. |
| Junior | Junior rates are a percentage of the adult rate in many awards, and penalties are then worked out from that junior base rate. |
| Apprentice or trainee | Covered by the award or training arrangement, and penalties depend on the apprentice classification in the pay guide. |
| Labour hire worker | Employed and paid by the labour hire provider, who must apply the award. A Fair Work Commission regulated labour hire arrangement order may require the same pay as host employees. |
How to calculate penalty rates
Work from the award, not from memory. A casual rostered across two sites in one week is a classic spot for a missed penalty.
- Confirm the award or enterprise agreement that covers the job, then note the classification level and whether the person is full-time, part-time or casual.
- Open the Fair Work Ombudsman pay guide for that award and find the base hourly rate that applies from 1 July 2026.
- Find the penalty category for the hours worked, such as Saturday, Sunday, public holiday or a night shift, and read the percentage or the dollar rate it sets.
- Check how the casual loading and the penalty combine for that award, because some awards add them and others replace one with the other.
- Multiply the correct hourly rate by the hours in that category, then add the result to pay for the other hours in the pay period.
- Add 12% super on ordinary time earnings and compare your total with the payslip, line by line.
| Worked example (structure) | Figure | Where it comes from |
|---|---|---|
| Base rate, no award | $26.44 per hour | National minimum wage from 1 July 2026 |
| Casual minimum, no award | $33.05 per hour | Base rate plus the 25% casual loading |
| Penalty for the hours worked | Percentage in the pay guide | Your award, since the national rate has no penalty |
| Pay for that shift | Hours worked multiplied by the correct hourly rate | Penalty hours kept separate on the payslip |
Employer obligations for penalty rates
Paying the right loading is only half the job, because the records must show it. A Monday-morning timesheet check catches most weekend errors early.
- Pay the award or agreement penalty for every qualifying hour, including short shifts, call-backs and the first hour of an early start.
- Issue a payslip within 1 working day of payday, showing the hours, the rate and each loading or penalty on its own line.
- Keep employee time and wage records for 7 years, including start and finish times and signed timesheets from the host supervisor.
- Report payroll information to the ATO through Single Touch Payroll on or before each payday.
- Pay super with wages so it reaches the fund within 7 business days of payday, and include penalties in ordinary time earnings where the law requires.
- Update penalty rates in payroll when the new pay guide takes effect, and keep a dated note of who checked the change.
Worker rights if penalty rates are underpaid
You can fix most underpayments without a dispute. Start with the paperwork you already have.
- Collect your payslips, roster and timesheets for the weeks in question, plus any text messages that confirm the hours you worked.
- Check the Fair Work Ombudsman pay guide for your award and classification, and compare the rate for each penalty hour with your payslip.
- Raise the difference with your employer in writing, state the dates and hours, and ask for a corrected payslip and back pay.
- Keep a copy of every message, and note when your employer replied.
- If it is not fixed, contact the Fair Work Ombudsman, which gives free advice through the Fair Work Infoline on 13 13 94 and can help recover unpaid wages.
- If you are a labour hire worker, raise it with the provider that pays you, not only the host site where you work.
Common mistakes to avoid with penalty rates
- Quoting a penalty percentage from one award for staff covered by another, which leaves workers well under their lawful rate.
- Leaving the base rate unchanged after 1 July, so every penalty built on it is also short.
- Assuming the casual loading and the penalty always stack, when some awards fold them together and others do not.
- Rounding start and finish times, so late-night or early-morning minutes never reach the penalty category.
- Paying a flat all-in rate without checking that it covers every penalty the award requires, including public holidays.
- Losing roster and timesheet records before 7 years have passed, which leaves nothing to rely on in a pay dispute.
Penalty rates FAQ
What are penalty rates?
Penalty rates are higher rates of pay for ordinary hours worked at times such as weekends, public holidays and nights. They are set by your modern award or enterprise agreement, so the percentage depends on your classification and employment type. Find yours in the Fair Work Ombudsman pay guide.
Do casuals get penalty rates?
Yes, where the award or agreement says so. Casuals receive the base rate plus the casual loading, which is 25% under most awards, and then any penalty for the day or time worked. Some awards combine the two, so read the pay guide for your classification before you assume.
Where do I find my penalty rates?
Use the free Fair Work Ombudsman pay guide for your award, then pick your classification and employment type. You can also call the Fair Work Infoline on 13 13 94. Rates are reviewed each year and modern award minimums rose 4.75% from 1 July 2026, so use the current guide.
Are penalty rates part of the national minimum wage?
No. The national minimum wage of $26.44 per hour from 1 July 2026 has no penalty built in. Penalties exist only through an award or agreement, so a worker who is not covered by either has no penalty entitlement, though the casual loading still applies.
Next step: get penalty rates right
Check each worker's award, classification and roster before the next pay run, and confirm the penalty hours against the pay guide. At TQN Personnel, we place and pay labour hire workers across Sydney and can help you find reliable workers for your site. This is general information, not legal, tax or financial advice, so check the Fair Work Ombudsman, the ATO or an employment lawyer for your situation. For the national rates behind every award, see our minimum wage australia guide.