Summarise with AI
What penalty rates are
Penalty rates compensate employees for working at times most people would rather not — weekends, public holidays, and late or early shifts. They are set by the applicable Modern Award or enterprise agreement and are expressed as a percentage of the ordinary hourly rate. A "150%" penalty means time and a half; "200%" means double time.
Common penalty rate structure
When penalty rates apply
Whether a penalty applies — and how much — depends entirely on the award. Common triggers include:
- Weekends: Saturday and Sunday ordinary hours
- Public holidays: gazetted state and national holidays
- Evenings and nights: shifts outside the daytime span of ordinary hours
- Early mornings: starts before the award's ordinary spread of hours
- Shift work: rotating or continuous shift arrangements
Set by the award
- Different rates per award
- Retail, hospitality, health all differ
- Enterprise agreements can vary them
Applied to ordinary hours
- Paid on unsociable ordinary hours
- Separate trigger from overtime
- Can combine with casual loading
How to calculate penalty rates
Multiply the ordinary hourly rate by the penalty percentage. For a $30/hour base rate, a 150% Saturday penalty is $45/hour, and a 250% public holiday penalty is $75/hour. Our step-by-step guide to calculating penalty rates walks through worked examples, and the overtime and penalty rate calculator does the maths for you.
Check your specific award
Penalty percentages differ between the retail, hospitality, health and other awards, and Fair Work updates them periodically. Always confirm the current figures in the applicable Modern Award rather than relying on a rate from a different industry.
Penalty rates vs overtime
Penalty rates and overtime are both premium payments, but they are triggered differently. Penalty rates apply to ordinary hours worked at unsociable times; overtime applies to hours worked beyond ordinary hours. Depending on the award, an employee working extra hours on a Sunday could attract both.
Common mistakes with penalty rates
Using another industry's rates
Applying hospitality penalties to a retail roster (or vice versa) leads to over- or under-payment.
Missing public holidays
State-specific public holidays are easy to overlook. Track them per location — see our public holiday rostering guide.
Forgetting casual penalties
Casuals receive penalty rates alongside their casual loading — not instead of it.
Key takeaways
Penalty rates are higher rates of pay for working weekends, public holidays and unsociable hours, set by the relevant Modern Award and expressed as a percentage of the ordinary rate. They apply to ordinary hours worked at those times and are separate from overtime, though the two can combine.
Applying the right penalties across weekends, nights and public holidays — for permanent and casual staff — is error-prone by hand. RosterElf interprets your award and costs each shift with the correct penalty rates automatically.
Struggling to apply weekend and public holiday penalty rates? RosterElf interprets your award automatically and costs every shift with the correct penalties.
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