What are penalty rates and how to calculate them
A complete guide to calculating weekend, public holiday, and evening penalty rates under Australian Modern Awards. Includes formulas, examples, and links to current award rates.
Calculate penalty rates instantly
Free calculator with award-specific rates
Written by
Georgia Morgan
General information only – not legal advice
This guide provides general information about calculating penalty rates under Australian Modern Awards. It does not constitute legal, HR, or professional advice and should not be relied on as a substitute for advice specific to your business, workforce, or circumstances.
Penalty rates explained
What is a penalty rate?
A penalty rate is a higher rate of pay that compensates employees for working at times that are typically considered unsociable hours. In Australia, penalty rates apply when work is performed on weekends, public holidays, evenings, or late nights.
For example, if your normal hourly rate is $25, working on a Sunday at 150% penalty rate means you'll earn $37.50 per hour for that shift. This compensates you for giving up your weekend time.
Penalty rates meaning: Why they exist
Penalty rates exist to fairly compensate employees who work outside standard business hours, recognizing that weekend, evening, and holiday work disrupts normal social and family life.
Under Australian Modern Awards, penalty rates are a legally mandated entitlement for employees covered by awards. Employers must pay these higher rates when employees work during designated penalty periods.
Common penalty rate scenarios
Saturday rates
125-150%
Typically 125% (time and a quarter) in retail and hospitality. Some awards pay 150% (time and a half).
Sunday rates
150-200%
Usually 150% to 175% in hospitality, 200% in retail. Higher than Saturday rates across most awards.
Public holiday rates
200-250%
Most awards pay 225-250%. The highest penalty rates. Check our public holiday rostering guide.
Evening/night rates
+10-15%
Additional loading for work after 6pm-9pm (varies by award). May apply on weekdays, often absorbed into weekend rates.
Do penalty rates apply to all employees?
Penalty rates apply to employees covered by a Modern Award or enterprise agreement. This includes:
- Full-time employees: Entitled to penalty rates as specified in their award
- Part-time employees: Same penalty rates as full-time employees
- Casual employees: Receive penalty rates (though the calculation may differ - see our casual penalty rates section)
Award-free employees (typically earning above $175,000) may not be entitled to penalty rates unless specified in their employment contract.
Do penalty rates vary by state?
No, Modern Award penalty rates are set federally and apply across all Australian states. Whether you're in Victoria, NSW, Queensland, South Australia, Western Australia, Tasmania, or the territories, the same award penalty rates apply to your industry. However, some awards may include state-specific allowances for other conditions. Check your specific award at Fair Work Ombudsman.
Saturday vs Sunday penalty rates
Weekend penalty rates vary by day and award. Here's what you need to know about Saturday and Sunday pay rates.
Are Saturdays time and a half?
Not always. Saturday rates typically range from 125% to 150% depending on your Modern Award. Most common industries pay 125% (time and a quarter), not 150% (time and a half).
Common Saturday rates by industry:
- Retail & Hospitality: 125% (time and a quarter)
- Fast Food: 125% for full-time/part-time
- Healthcare & SCHADS: 150% (time and a half)
- Manufacturing: 150% (time and a half)
Check your specific award in our award rates guides or use the penalty rates calculator to find your exact rate.
Saturday penalty rates by employment type
| Employment type | Typical Saturday rate | Example ($25/hr base) |
|---|---|---|
| Full-time | 125% | $31.25/hr |
| Part-time | 125% | $31.25/hr |
| Casual (retail) | 150% (includes loading) | $37.50/hr |
Note: These are typical rates for retail and hospitality awards. Your award may differ. See casual penalty rates section for how casual loading works.
Sunday penalty rates explained
Sunday rates are typically higher than Saturday rates, ranging from 150% to 200% depending on your industry. Sunday is considered a more valuable rest day, so penalty rates reflect this.
Common Sunday rates by industry:
- Retail: 200% (double time) for full-time/part-time
- Hospitality: 150% (time and a half)
- Fast Food: 150% for full-time/part-time
- Healthcare: 175-200%
For casual employees, Sunday rates are often slightly lower than permanent employees because the casual loading is included. For example, retail casuals receive 175% on Sundays compared to 200% for permanent staff.
Weekend vs weekday pay comparison
| Day | Typical rate (retail/hospitality) | Example ($25/hr base) |
|---|---|---|
| Monday-Friday | 100% (ordinary rate) | $25.00/hr |
| Saturday | 125% (time and a quarter) | $31.25/hr |
| Sunday | 150-200% | $37.50-$50.00/hr |
| Public holiday | 225-250% | $56.25-$62.50/hr |
See how weekend rates affect your pay
Quick Answer: how to calculate penalty rates
Follow these 4 simple steps to calculate penalty rates in Australia
Find your base hourly rate
Check your employment contract or award classification. Example: $25.00/hour
Find the penalty multiplier
Look up your Modern Award penalty rate. Example: Sunday = 1.5× (150%)
Calculate the penalty rate
Multiply: $25.00 × 1.5 = $37.50/hour
Calculate total shift pay
Multiply by hours worked: $37.50 × 8 hours = $300.00
Formula
Base Rate × Penalty Multiplier × Hours = Total Pay
Free calculator • No signup • Award-specific rates
What are penalty rates?
Penalty rates are higher pay rates that apply when employees work at particular times, such as weekends, public holidays, or late evenings. They compensate employees for working outside standard hours.
Under Australian workplace law, employees covered by a Modern Award or enterprise agreement are entitled to penalty rates as specified in that document. The rates vary significantly between awards. Fair Work Ombudsman provides official guidance on penalty rates.
Free tool • No signup required • Australian awards
Penalty rate calculation example
Here's how to calculate penalty rates for a retail employee working on Sunday.
Sunday penalty calculation
General Retail Industry Award
Step 1: Find the base rate
Retail Employee Level 1: $25.43/hour (as of 1 July 2024)
Step 2: Find the Sunday penalty rate
General Retail Award Sunday penalty: 200% (full-time/part-time)
Step 3: Calculate
$25.43 × 2.00 = $50.86/hour
For a 6-hour Sunday shift:
$50.86 × 6 hours = $305.16
Note: Casual employees under the Retail Award receive 175% on Sundays (this includes their casual loading). Always check the specific rate for the employee type.
Calculate your own penalty rates
Enter your award rates and shift details to get instant penalty rate calculations for your team.
Use Free CalculatorIndustry-specific penalty rate examples
See how penalty rates work across different industries and employment types.
Hospitality: Saturday evening
Hospitality Industry Award
Scenario
Restaurant server, Level 2, Saturday 6pm-11pm shift
Base rate
$28.50/hour
Saturday penalty
150% ($28.50 × 1.5 = $42.75/hr)
Evening penalty (after 10pm)
Additional 15% on 1 hour = +$6.41
Total 5-hour shift
(4hr × $42.75) + (1hr × $49.16) = $220.16
Healthcare: public holiday
Nurses Award
Scenario
Registered Nurse, Christmas Day 12-hour shift
Base rate
$42.00/hour
Public holiday penalty
250% ($42.00 × 2.5 = $105.00/hr)
Note
Plus additional day off in lieu or extra payment
Total 12-hour shift
$105.00 × 12 hours = $1,260.00
Casual: Sunday (Inclusive)
Fast Food Industry Award
Scenario
Casual crew member, Sunday morning shift
Base rate
$24.00/hour
Sunday casual rate (inclusive)
175% ($24.00 × 1.75 = $42.00/hr)
Why 175%?
Includes 25% casual loading + Sunday penalty
Total 5-hour shift
$42.00 × 5 hours = $210.00
Key takeaway from these examples
- Rates vary significantly between awards – always check your specific award
- Penalties can stack (e.g., Saturday + Evening in Hospitality)
- Casual rates are inclusive in most awards – don't add 25% on top of the stated penalty
- Public holiday rates are typically the highest (200-250%) and may include additional entitlements
Why penalty rates matter to your bottom line
See how the same 8-hour shift at $25/hour escalates across different days. Small scheduling changes can mean thousands in savings.
Weekday
Base rate (1.0×)
$200
Standard cost
No penalty
Saturday
Penalty rate (1.25×)
$250
+$50 more
25% increase
Sunday
Penalty rate (1.5×)
$300
+$100 more
50% increase
Public Holiday
Penalty rate (2.0×)
$400
+$200 more
100% increase
Smart rostering saves thousands per month
For a team of 10 employees, moving just 2 shifts per week from Sunday to weekday saves over $20,000 annually in penalty costs.
Forecast Your Roster CostsHow to calculate penalty factor (multiplier)
The penalty factor (also called the penalty multiplier) tells you how much more to pay compared to the base rate. Here's where to find it.
What is a penalty factor?
A penalty factor is a multiplier applied to your base hourly rate. For example, a factor of 1.5 means the employee earns 1.5 times their normal rate (150%).
Example:
Base rate: $25.00/hour
Sunday factor: 1.5×
Sunday rate: $25.00 × 1.5 = $37.50/hour
Where to find your penalty factor
Modern Award
Check the "Penalty rates" clause in your relevant Modern Award document
Employment Contract
Your contract may specify penalty rates if you're award-free or on an EBA
Fair Work Website
Use Fair Work's pay calculator (PACT) for award-specific rates
Award Guides
Our award guides provide plain-English summaries of common penalty rates
Common penalty factors by shift type
| Shift Type | Typical Factor | Percentage | Example ($25/hr base) |
|---|---|---|---|
| Saturday | 1.25× | 125% | $31.25/hr |
| Sunday | 1.5× | 150% | $37.50/hr |
| Public Holiday | 2.0× | 200% | $50.00/hr |
| Evening (after 7pm) | 1.15× | 115% | $28.75/hr |
⚠️ These are typical rates. Always check your specific award as factors vary significantly between industries.
How to calculate casual penalty rates
Calculating penalty rates for casual employees is tricky because casual loading (usually 25%) interacts with penalty rates. The method depends on your award.
Important: two different methods exist
Most Modern Awards use Method 1 (Inclusive) where the casual loading is built into the penalty rate. Some awards use Method 2 (Cumulative) where you add casual loading first, then apply the penalty. Always check your specific award wording.
Most Common
Method 1: inclusive rate
The penalty rate includes the casual loading. You don't add 25% on top.
Example: Sunday Casual (Retail Award)
Base rate: $25.00/hour
Sunday casual rate: 175%
Pay: $25.00 × 1.75 = $43.75/hr
Why 175% not 200%?
The permanent employee Sunday rate (200%) is reduced by ~25% for casuals because their casual loading is already built in. 175% includes both penalty and casual loading.
Common awards using this method:
- General Retail Industry Award
- Hospitality Industry Award
- Fast Food Industry Award
Less Common
Method 2: cumulative
Add casual loading first, then apply the penalty multiplier on top.
Example: Sunday Casual (Hypothetical Award)
Base rate: $25.00/hour
Step 1: Add casual loading (25%)
$25.00 × 1.25 = $31.25/hr
Step 2: Apply Sunday penalty (150%)
$31.25 × 1.5 = $46.88/hr
Pay: $46.88/hr
⚠️ Warning
This method is LESS common. Only use if your award specifically states penalties are "in addition to" or "on top of" casual loading.
When this might apply:
- Some Enterprise Agreements
- Specific award clauses
- Individual employment contracts
Side-by-side comparison ($25/hr base)
| Shift Type | Method 1: Inclusive | Method 2: Cumulative | Difference |
|---|---|---|---|
| Saturday | $37.50/hr (150%) | $39.06/hr (156%) | +$1.56 |
| Sunday | $43.75/hr (175%) | $46.88/hr (188%) | +$3.13 |
| Public Holiday | $56.25/hr (225%) | $62.50/hr (250%) | +$6.25 |
Method 2 always results in higher pay — but most awards use Method 1.
How to know which method your award uses
Read the award carefully: Look for phrases like "inclusive of casual loading" (Method 1) or "in addition to casual loading" (Method 2)
Use Fair Work's PACT calculator: It will calculate correctly based on your specific award
Check our award guides: We provide plain-English explanations for common awards
When in doubt: Contact Fair Work or use rostering software with built-in award interpretation
6 steps to penalty rates calculation
Follow these steps to correctly calculate penalty rates for any Modern Award.
Identify the applicable Modern Award
Find which award covers your employees as penalty rates vary significantly between awards.
Tips:
- Use Fair Work's "Find my award" tool at fairwork.gov.au
- Check the employee's contract for award references
- Common awards: Hospitality, General Retail, Fast Food, SCHADS
- Some employees may be award-free (check minimum wage instead)
Determine the base hourly rate
Find the ordinary hourly rate for the employee's classification level before penalties apply.
Tips:
- Check the award pay guide for the correct classification level
- Full-time/part-time: Use the <a href="/glossary/hourly-wage" class="text-primary-700 hover:text-primary-800 underline">ordinary hourly rate</a>
- Casual: Include casual loading (usually 25%) in the base rate first
- RosterElf award guides list current rates by classification
Identify when penalties apply
Check which time periods attract penalty rates under the relevant award.
Tips:
- Saturdays: Usually 125-150% depending on the award
- Sundays: Usually 150-200% depending on the award
- Public holidays: Usually 200-250% depending on the award
- Evening/night work: May attract additional loadings (e.g., 15% after 7pm)
Apply the penalty rate multiplier
Multiply the base hourly rate by the penalty percentage to calculate the penalty rate.
Tips:
- Formula: Base hourly rate × Penalty percentage = Penalty rate
- Example: $25.00 × 150% = $37.50 per hour (Saturday)
- Example: $25.00 × 200% = $50.00 per hour (Sunday)
- Some awards cap penalties or have different rates for different hours
Calculate casual penalties correctly
Understand how casual loading interacts with penalty rates (this varies by award).
Tips:
- Check if penalties are "inclusive" or "in addition to" casual loading
- Most awards: Casual loading is built into the penalty rate
- Some awards: Add casual loading first, then apply penalty multiplier
- The award wording determines the correct calculation method
Verify overtime vs penalty interaction
Check if overtime rates or penalty rates apply when both conditions are met.
Tips:
- Most awards: The higher rate applies, not both
- Overtime worked on a public holiday may have specific rates
- Check the award's "overtime" and "penalty rates" clauses
- When in doubt, use Fair Work's Pay Calculator (PACT)
Automate penalty rate calculations
RosterElf applies the correct penalty rates automatically based on your industry award and shift times. Built for Australian small businesses.
Penalty rates by award
Common penalty rates for popular Modern Awards. Click to view full award details.
Saturday
125%
Sunday
150%
Public Holiday
225%
Evening
10% after 7pm
Saturday
125%
Sunday
200%
Public Holiday
250%
Evening
Varies by state
Saturday
125%
Sunday
150%
Public Holiday
225%
Evening
10% after 9pm
Saturday
150%
Sunday
200%
Public Holiday
250%
Evening
15% after 8pm
Saturday
150%
Sunday
175%
Public Holiday
250%
Evening
15% after 6pm
Saturday
125%
Sunday
150%
Public Holiday
225%
Evening
10% after 7pm
Saturday
150%
Sunday
175%
Public Holiday
250%
Evening
15% after 6pm
Saturday
150%
Sunday
200%
Public Holiday
250%
Evening
Varies
Saturday
150%
Sunday
200%
Public Holiday
250%
Evening
130% after 6pm
| Award | Saturday | Sunday | Public Holiday | Evening |
|---|---|---|---|---|
| Hospitality Industry (General) | 125% | 150% | 225% | 10% after 7pm |
| General Retail Industry | 125% | 200% | 250% | Varies by state |
| Fast Food Industry | 125% | 150% | 225% | 10% after 9pm |
| SCHADS (Disability/Community) | 150% | 200% | 250% | 15% after 8pm |
| Aged Care | 150% | 175% | 250% | 15% after 6pm |
| Restaurant Industry | 125% | 150% | 225% | 10% after 7pm |
| Nurses Award | 150% | 175% | 250% | 15% after 6pm |
| Cleaning Services | 150% | 200% | 250% | Varies |
| Manufacturing Award | 150% | 200% | 250% | 130% after 6pm |
Rates shown are for full-time and part-time employees. Casual rates may differ. View all award guides.
Use the Fair Work PACT calculator
Get 100% accurate penalty rates for your specific award with the official Pay and Conditions Tool from Fair Work Australia
Award-Specific
Calculations match your exact Modern Award
Always Updated
Reflects latest award changes & wage increases
Legally Verified
Official Fair Work data you can rely on
100% Free
No signup or payment required
How to use PACT
Find Your Award
Search by industry, job title, or employer
Enter Shift Details
Input classification, hours, and shift type
Get Accurate Rates
Instant calculation with penalty rates included
Opens in a new tab • calculate.fairwork.gov.au • Free government service
When to use PACT vs RosterElf
Use PACT for one-off calculations and award verification. Use RosterElf for ongoing rostering with automatic penalty rate calculations, payroll integration, and compliance tracking across your entire team.
Common penalty rate mistakes
These errors can lead to underpayment claims and Fair Work penalties.
Using the wrong award
Consequence: Applying incorrect penalty rates, leading to underpayment or overpayment
Solution: Use Fair Work's "Find my award" tool or check our award rates guides .
Forgetting casual loading interaction
Consequence: Double-counting or missing casual loading when calculating penalties
Solution: Check the specific award wording for how casual penalties are calculated. Use award interpretation software .
Applying multiple penalties
Consequence: Overpaying by stacking penalties that shouldn't combine
Solution: Most awards specify only the highest rate applies. Check the award or use automated payroll integration .
Missing evening/night loadings
Consequence: Underpaying staff who work after-hours shifts
Solution: Check for time-of-day loadings in addition to weekend penalties. Track with time and attendance software .
Using outdated rates
Consequence: Pay rates change annually (usually 1 July). Old rates mean underpayment
Solution: Check Fair Work for current rates or use our regularly updated award rate guides .
Free tools to avoid these mistakes
Use these calculators to support compliance and accuracy
Tips for accurate penalty calculations
Follow these practices to support compliance and avoid underpayment.
Use Fair Work PACT
The Pay and Conditions Tool provides award-specific calculations and is free.
Automate calculations
Use payroll software with built-in award interpretation to reduce errors.
Check rates annually
Award rates typically increase on 1 July each year. Update your systems.
Document your method
Keep records of how you calculated rates in case of a Fair Work audit.
Train managers
Ensure rostering managers understand when penalties apply before scheduling.
Review timesheets
Check that penalty hours are correctly recorded before processing payroll.
Frequently asked questions
- A penalty rate is higher pay for working at times that are typically rest periods. When you work weekends, public holidays, evenings, or late nights, you earn more per hour than your normal rate. For example, if your normal rate is $25/hour and Sunday penalty is 150%, you'll earn $37.50/hour on Sundays. This compensates you for giving up social and family time.
- Penalty rates mean you earn more per hour when working weekends, public holidays, or evening shifts. For a full-time retail employee earning $25/hour normally, working a Sunday at 200% means earning $50/hour for that shift. This can significantly increase your take-home pay, especially if you regularly work weekends.
- Multiply the employee's base hourly rate by the penalty percentage. For example, if the base rate is $25/hour and the Sunday penalty is 150%, the penalty rate is $25 × 1.5 = $37.50/hour. Check the relevant award for the correct percentages.
- Weekend rates and penalty rates refer to the same thing. "Weekend rates" is the common term for penalty rates that apply on Saturdays and Sundays. Both terms describe the higher pay rates you receive for working on weekends. The specific percentages (e.g., 125% for Saturday, 150-200% for Sunday) are determined by your Modern Award.
- Yes, but the calculation varies by award. Most awards have specific casual penalty rates that include the casual loading. Some awards require adding casual loading first, then applying the penalty. Always check the specific award wording. See our casual penalty rates section for detailed examples.
- Penalty rates apply based on WHEN work is performed (weekends, public holidays, evenings). Overtime applies to EXTRA hours beyond ordinary hours. When both apply, most awards specify only the higher rate is paid, not both. Check the award interpretation guide.
- Employees covered by a Modern Award or enterprise agreement are entitled to penalty rates as specified. Award-free employees (typically earning above the high-income threshold) may not receive penalties unless their contract specifies them.
Regulatory sources
This guide is aligned with official Australian workplace regulations.
Automate award compliance
Join thousands of Australian businesses using RosterElf to calculate pay rates and support your compliance efforts. Built for Australian small businesses.