Award Wages in Australia (2026): Finding Your Award, Classifications, Penalty Rates and the 2026 Increase

Most Australian employers don't set minimum pay themselves — a modern award does. Get the award or the classification wrong and every pay run is wrong, along with super, leave and overtime. This guide explains award wages in Australia for 2026: what awards are, how to work out which one covers your staff, how classification levels work, what the 2026 Annual Wage Review changed, and how penalty rates, casual loading and junior rates stack. Examples use the retail, hospitality and clerks awards — three of the most widely used — with rates in Australian dollars from 1 July 2026.

Quick answer

A modern award sets the minimum pay and conditions for an industry or occupation. You find the right award by matching your industry and each employee's duties to the award's coverage clause and classification levels. From the first full pay period on or after 1 July 2026, award minimum rates rose by 4.75%, and no ongoing award rate can be below A$26.44 an hour. On top of the base rate you may owe penalty rates, casual loading, overtime and allowances.

• Award rates are minimums — you can pay more, never less

• Coverage depends on what your business does and what the employee does, not their job title

• Retail Level 1 is A$27.81 an hour; Sunday is 150% for permanent staff

• Award-free employees get at least the National Minimum Wage

• Rates change every 1 July — update payroll before the first full pay period

What an award is and who it covers

A modern award is a legal instrument made by the Fair Work Commission. Each one covers an industry (such as retail, hospitality or building) or an occupation (such as clerical work or nursing) and sets minimum wages by classification, plus conditions like ordinary hours, rosters, overtime, penalty rates, allowances, breaks and some leave terms. Awards sit on top of the National Employment Standards, which give every employee leave, notice and other basic entitlements.

Awards matter to a lot of businesses. In its 2026 decision the Commission said about 21.1% of employees — almost 2.8 million people — are paid exactly the award rate, concentrated in accommodation and food services, health care and social assistance, retail, and administrative and support services. Many more are paid above the award but still rely on it for penalty rates and overtime.

Under section 45 of the Fair Work Act, contravening a term of an award that applies to you is a civil remedy provision. The Act separates two ideas. An award covers an employer and employee if it's expressed to cover them (section 48). It applies if it covers them, is in operation, and nothing else displaces it (section 47). Two common things that stop an award applying are:

• An enterprise agreement. If a registered agreement applies, the award doesn't — but the agreement's base rates can never be lower than the award's.
• High income employees. An award doesn't apply to an employee earning above the high income threshold (A$190,100 from 1 July 2026) who has accepted a written guarantee of annual earnings from the employer.

Which minimum applies to an employee

Step 1

Enterprise agreement applies?

Agreement rates — never below the award

Step 2

Award covers the work?

Award classification rate

Step 3

High income guarantee?

Award doesn't apply

Step 4

None of these

National Minimum Wage

Employees with no award and no agreement are award-free. They must be paid at least the National Minimum Wage of A$26.44 an hour, or A$33.05 an hour for casuals including the 25% loading. Our minimum wage guide covers award-free pay in detail.

How to find the right award

Finding the award is where most underpayments start. Job titles don't decide coverage; what the business does and what the employee actually does do. Work through it in this order.

1. Start with your industry. Most awards are industry awards. A shop is covered by the General Retail Industry Award; a café, pub or hotel by the Hospitality Industry (General) Award; a restaurant by the Restaurant Industry Award; and so on. Read the award's coverage clause — the Fair Work Ombudsman notes it is usually clause 4 — and any listed exclusions. Fast food, pharmacies, hair and beauty, and clubs, for example, each have their own award even though they sell to the public.

2. Check whether the employee's work fits a classification in that award. Industry awards often include support roles. The Retail Award's Level 1, for instance, includes "any function of a Clerical Assistant Level 1", so a junior office assistant in a shop is usually covered by the Retail Award.

3. Consider occupational awards. Where an employee's work isn't described in the industry award, an occupational award may cover them. The Clerks—Private Sector Award is the classic example: it covers clerical and administrative staff in businesses whose own industry award doesn't. The same business can therefore have employees under two awards.

4. Use the official tools. The Fair Work Ombudsman's Pay and Conditions Tool lets you search by industry and occupation and calculates rates. Its A to Z list of awards and award summaries help you read coverage clauses. The Fair Work Commission's document search holds every award's current text and its history of variations, and its Modern Awards Pay Database has historical rates.

5. Record your decision. Write down which award and classification you chose for each employee and why. If the Fair Work Ombudsman ever asks, a reasoned decision made early is far better than a guess.

Finding the award and classification for a new employee

1. 1

   Identify the industry award

   Search the FWO's Pay and Conditions Tool by industry, then read the award's coverage clause and exclusions.

   Find an award (FWC)
2. 2

   Check the employee's actual duties

   List what the person will do day to day — not their job title — and compare it with the classification definitions.

3. 3

   Check for an occupational award

   If the industry award doesn't describe the work, look at awards such as the Clerks—Private Sector Award.

4. 4

   Pick the classification level

   Use the definitions and indicative job titles in the award's schedule. Higher skills or responsibility mean a higher level.

5. 5

   Record it and review

   Note the award and level on the employee's file and payslip, and review it when duties change.

Classification levels and minimum rates

Each award groups jobs into classification levels, usually defined in a schedule at the back. The level depends on skills, qualifications, responsibility and sometimes experience. The Retail Award, for example, describes a Level 1 employee as someone who sells goods, stocks shelves, operates a checkout, prices or packs goods, collects trolleys or provides customer service, with indicative titles like shop assistant, check-out operator and store worker. Higher levels add responsibilities such as supervising, specialised trades or management of a department.

Getting the level right matters as much as getting the award right. A store worker who is regularly put in charge of a shift may be performing higher-level duties, and many awards require higher duties pay when someone does that work for a set period.

These are adult base rates for permanent employees. Casuals get a loading on top, juniors and apprentices get their own scales, and penalty rates apply at certain times.

The 2026 Annual Wage Review

Every year the Fair Work Commission reviews the National Minimum Wage and modern award minimum rates. The 2026 decision, announced on 2 June 2026, set out a difficult balance: inflation had picked up through late 2025 and early 2026, yet award-reliant workers' real wages were still below their July 2021 level.

The outcome had three parts.

• A 4.75% increase to modern award minimum rates.
• A structural change to the lowest rates. The Commission began phasing out the C13 wage level, so that the next level up (C12) becomes the lowest rate for ongoing employment. This is happening in three stages, and the first stage lifted the lowest ongoing award rate to A$1,004.90 a week (A$26.44 an hour) and the entry-level C14 rate, which can only apply for the first six months, to A$978.10 a week (A$25.74 an hour).
• A new National Minimum Wage of A$1,004.90 a week, aligned with that lowest award rate.

The Commission estimated the structural change affects around 100,000 of the lowest-paid employees. Two more stages will follow in later reviews, so the bottom of the award system will keep rising faster than the headline increase.

When the increase applies. The Fair Work Ombudsman explains that the new rates start from the first full pay period starting on or after 1 July 2026. Its example: a salon whose weekly pay cycle runs Monday to Sunday applies the new rates from Monday 6 July 2026, because 1 July was a Wednesday. If your pay period happened to start on 1 July, the new rates applied from that day.

Other 2026 changes. Separate decisions to address gender undervaluation lifted rates in the Children's Services Award and the Pharmacy Award from the first full pay period on or after 30 June 2026, before the general increase was added on top. The Commission has also completed reviews affecting dental assistants, disability home care workers and health professionals, with increases phasing in over the next few years, and it changed Health Services Award wages and classifications from 1 October 2026. If you employ in these sectors, check the award's current pay guide rather than applying 4.75% to last year's rate.

Penalty rates, casual loading and overtime

The base rate is only part of award pay. Awards add penalty rates for work at certain times (evenings, weekends, public holidays), a casual loading in place of paid leave, overtime for hours beyond ordinary hours, and allowances for things like tools, uniforms or extra responsibility. Each award sets its own figures, which is why the same Sunday shift costs different amounts in different industries.

Percentages are of the minimum hourly rate for the employee's classification. In the retail and hospitality awards the casual column already includes the 25% casual loading, so you don't add it again. The hospitality award adds a flat A$2.95 an hour for ordinary hours from 7 pm to midnight and A$4.42 an hour from midnight to 7 am on weekdays.

Casual loading. Most awards pay casuals a 25% loading on top of the minimum hourly rate (Retail Award clause 11.1) in place of paid leave and notice. See our casual employees guide for conversion rights and the Casual Employment Information Statement.

Overtime applies to hours beyond an employee's ordinary hours or outside the span of hours the award allows. Under the Retail Award, overtime Monday to Saturday is 150% for the first three hours and 200% after that for permanent employees, and 200% on Sundays. Overtime isn't qualifying earnings for super when ordinary hours are clearly defined — see our Payday Super guide.

Public holidays. Check our public holidays guide for the 2026 dates in each state, because a public holiday in one state is an ordinary day in another.

Junior and apprentice rates

Many awards pay junior employees a percentage of the adult rate. Under the Retail Award, junior rates apply only to levels 1 to 3:

Penalty rates and casual loading are calculated on the junior rate. The FWO's pay guides publish rounded figures for every age and level, so use those for payroll. Apprentices and trainees have their own tables in each award and in the National Training Wage schedule.

Paying above the award: salaries and set-off

You can always pay more than the award, and many employers pay a flat salary or an above-award hourly rate. That's lawful only if the employee is never worse off than they would be under the award for the hours actually worked. A salary that comfortably covers 38 ordinary weekday hours can fall short once you add Sunday shifts, late nights or regular overtime.

Many awards contain an annualised wage arrangement clause setting out what a salary can cover, what records you must keep (usually start and finish times) and when you must reconcile the salary against what the award would have paid. If the reconciliation shows a shortfall, you pay the difference. Where the award has no such clause, the general principle still applies: compare what you paid with the award entitlements for each pay period, and pay any gap.

Contracts sometimes say a salary is "inclusive of all award entitlements". That wording helps only if the amount actually covers the entitlements. Courts look at whether the employer can show the salary was enough, which is one reason accurate employee records matter.

Worked examples in A$

1. Retail part-timer on weekends. Ella is a Level 1 adult part-time shop assistant. She works 6 hours on Saturday and 6 hours on Sunday. Saturday: 6 × A$27.81 × 125% = A$208.58. Sunday: 6 × A$27.81 × 150% = A$250.29. Her weekend pay is A$458.87, and super of 12% applies to all of it because these are ordinary hours.

2. Retail casual on a Sunday. Jack, an adult casual at Level 1, works 5 hours on Sunday. The casual Sunday rate is 175% of the minimum rate, which already includes the loading: 5 × A$27.81 × 175% = A$243.34.

3. Hospitality casual on a weeknight. Mei, a Level 1 casual bartender, works 8 pm to midnight on a Tuesday. Her rate is 125% of A$26.44 = A$33.05 plus A$2.95 an hour: 4 × A$36.00 = A$144.00.

4. A 17-year-old casual in a shop. Sam's junior Level 1 rate is 60% × A$27.81 ≈ A$16.69. As a casual on a weekday he gets 125% of that (about A$20.86); on Saturday 150% (about A$25.03). Check the FWO pay guide for the rounded figures your payroll should use.

5. Clerk working a Sunday. An office administrator at Clerks Level 1, Year 1 is directed to work ordinary hours on a Sunday stocktake. The rate is 200% × A$26.97 = A$53.94 an hour, with a minimum of 4 hours' pay — at least A$215.76.

6. Missing the July increase. A full-time Retail Level 4 employee should have received A$1,119.10 a week from the first full pay period after 1 July 2026. If payroll kept paying last year's rate — roughly A$50 a week less — for 13 weeks, the employer owes about A$650 in back pay, plus super on it and any related penalty and overtime differences.

Cost of one 6-hour shift — Retail Level 1 adult (2026)

Shift	Full-time or part-time	Casual
Weekday before 6 pm	A$166.86	A$208.58
Saturday	A$208.58	A$250.29
Sunday	A$250.29	A$292.01
Public holiday	A$375.44	A$417.15

Weekday before 6 pm

Full-time or part-time

A$166.86

Casual

A$208.58

Saturday

Full-time or part-time

A$208.58

Casual

A$250.29

Sunday

Full-time or part-time

A$250.29

Casual

A$292.01

Public holiday

Full-time or part-time

A$375.44

Casual

A$417.15

Underpayment risks and how to fix them

Award underpayments are taken seriously. Contravening an award is a civil remedy provision, and courts can order back pay with interest as well as penalties for each contravention. If you haven't kept the records the law requires, section 557C reverses the burden of proof, so you must disprove an employee's claim about hours or pay. And since 1 January 2025, intentionally underpaying wages or entitlements is a criminal offence under section 327A of the Fair Work Act. If the Fair Work Ombudsman is satisfied a small business followed the Voluntary Small Business Wage Compliance Code, it can't refer the underpayment for criminal prosecution — but civil action and back pay are still possible, and honest mistakes still have to be fixed.

If you find a mistake:

• Work out the full shortfall for every affected employee and pay period, including penalty rates, overtime, loadings and leave.
• Pay it promptly, with super on the back pay. Under Payday Super, super on back pay is an out-of-cycle payment due with the next regular payday.
• Fix the cause, whether it's the wrong award, the wrong level, a missed increase or a salary that doesn't cover penalty hours.
• Keep a record of how you calculated the back pay and when you paid it, and get advice or contact the Fair Work Ombudsman if the amounts are large or the cause is unclear.

Common award wage mistakes

• Using last year's pay guide. Rates change every 1 July. Some awards also change at other times, like the Health Services Award on 1 October 2026.
• Classifying by job title. Duties decide the level. A "sales assistant" who supervises staff may be at a higher level.
• Adding the casual loading twice. Many award penalty tables for casuals already include it.
• Applying one award to everyone. Office staff in an industry business may be under the Clerks Award.
• Paying a salary without checking. A salary must cover all award entitlements for the hours worked, including weekends and overtime.
• Forgetting juniors' birthdays. A junior's rate goes up on their birthday under most awards, and at 20 in retail after six months' service.
• Ignoring award changes in progress. The Commission's Clerks Award working-from-home decision of 27 August 2026 proposes a new clause on requests to work from home; check for the final determination.

Official links

• Find an awardFair Work Commission — award text, history and links to FWO tools
• Pay and Conditions ToolFair Work Ombudsman — search awards and calculate pay
• Minimum wages increase from 1 July 2026FWO — what changed and when
• Annual Wage Review 2026 announcementFWC — 4.75% and C13 phase-out
• General Retail Industry Award 2020Current consolidated award (PDF)
• Fair Work Act 2009Sections 45–48 on award coverage

What to do next

Check each employee's award and classification against their actual duties, and confirm payroll picked up the 1 July 2026 rates from the first full pay period. Then compare any salaried staff against what the award would have paid for the hours they really work. Our payslip requirements guide shows how award rates, penalties and loadings must appear on payslips, and our employee records guide lists the time and wage records that protect you if pay is ever questioned.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

How much did award wages go up in 2026?

The Fair Work Commission's Annual Wage Review 2026 increased modern award minimum wages by 4.75% from the first full pay period starting on or after 1 July 2026. The lowest award rate for ongoing work became A$26.44 an hour, the same as the National Minimum Wage, and entry-level rates for the first six months became A$25.74 an hour.

How do I find out which award covers my employees?

Start with your industry, then check the occupation. Read the coverage clause (usually clause 4) of the likely award and match each employee's duties to a classification. The Fair Work Ombudsman's Pay and Conditions Tool and A to Z list of awards help you search, and the Fair Work Commission publishes every award's current text and variation history.

What are Sunday penalty rates in retail?

Under the General Retail Industry Award, full-time and part-time employees are paid 150% of their minimum hourly rate for ordinary hours on a Sunday, and casuals 175% including the casual loading. Saturday is 125% for permanent staff, and public holidays are 225%. Other awards set different rates — the Clerks Award, for example, pays 200% on Sundays.

Can I pay an employee a salary instead of award rates?

Yes, as long as the salary is at least what the employee would have earned under the award for the hours they actually work, including penalty rates, overtime and allowances. Many awards have annualised wage clauses with record-keeping and reconciliation rules. If the salary falls short in any period, you must pay the difference.

What happens if an employee isn't covered by an award?

Award-free employees must be paid at least the National Minimum Wage of A$26.44 an hour (A$1,004.90 a week for full-time hours), plus a 25% loading for casuals, and they still get the National Employment Standards. Employees covered by an enterprise agreement are paid under the agreement instead, but its base rates can't fall below the award.

Do junior employees get paid less under awards?

Many awards set junior rates as a percentage of the adult rate. Under the General Retail Industry Award, for example, a 17-year-old at levels 1 to 3 gets 60% of the adult rate and an 18-year-old gets 70%, rising to the full adult rate at 20 after six months with the employer. Penalty rates and casual loading apply on top of the junior rate.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 13 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.Annual Wage Review 2026 — Announcement of Decision — Fair Work Commission · accessed 13 October 2026
2. 2.Minimum wages increase from 1 July 2026 — Fair Work Ombudsman · accessed 13 October 2026
3. 3.General Retail Industry Award 2020 [MA000004] — consolidated to 1 July 2026 — Fair Work Commission · accessed 13 October 2026
4. 4.Hospitality Industry (General) Award 2020 [MA000009] — consolidated to 1 July 2026 — Fair Work Commission · accessed 13 October 2026
5. 5.Clerks—Private Sector Award 2020 [MA000002] — consolidated to 1 July 2026 — Fair Work Commission · accessed 13 October 2026
6. 6.Find an award — Fair Work Commission · accessed 13 October 2026
7. 7.Fair Work Act 2009 — sections 45–48, 327A, 557C (compilation C2026C00355) — Federal Register of Legislation · accessed 13 October 2026
8. 8.Working from home – Clerks Award decision issued — Fair Work Commission · accessed 13 October 2026