Penalty Rates & Loadings

The dictionary describes a penalty as a punishment and a loading as a charge.

Fair Work Ombudsman describes them as – a penalty rate as a higher rate of pay that an employee may receive when working particular hours or days of the week.

There are many forms of penalty rates and loadings that may apply depending on the relevant award, contract, or legislation that applies.

Penalty rates are higher pay rates that employees need to be paid for working particular hours or days.

Employees may be entitled to a penalty rate when working:

  • weekends
  • public holidays
  • overtime
  • late nights shifts or
  • early morning shifts.

The challenge for Payroll Professionals is ensuring wage compliance.  By pro-actively setting rules and tools for calculation that are consistent with our legal obligations ensures we protect our businesses from potential remediation activities in the future.

Penalty rates – Fair Work Ombudsman

It is time consuming and complex to work through the many rules we need to follow.  Our business can provide expert advice in a format that can both identify any current issues and future-proof you from ongoing review.


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payroll - what you need to do

What can we do to help?

Due to the complexity of modern industrial obligations payroll errors are made and frequently. Most underpayments are a result of administrative error, a misunderstanding of the payments required in the Modern Awards, outdated contracts and payments and/or a shortcoming in the payroll system, rather than any deliberate attempt to underpay employees.

If you are concerned that there might be errors in your processes Fresh HR Insights is here to help with our two options for a payroll audit.