Australia’s pay system is structured around various elements that govern how employees are compensated. Here’s an overview of the key components:
1. National Employment Standards (NES)
The NES provides a framework of minimum employment conditions for ALL employees in Australia. It includes provisions for:
• Maximum weekly hours
• Leave entitlements
• Public holidays
• Notice of termination and redundancy pay

2. Modern Awards
Modern Awards are legal documents that outline the minimum pay rates and working conditions for specific industries or occupations. They cover:
• Base pay rates
• Allowances
• Overtime rates
• Shift penalties
Any changes to the award rates, payments or any entitlement to the award can be considered a breach.

3. Enterprise Agreements
These are negotiated agreements between employers and employees (or their representatives) that can provide for pay and conditions that are different from those set out in Modern Awards. They must be approved by the Fair Work Commission.

4. Minimum Wage
The Fair Work Commission reviews and sets the national minimum wage annually. As of July 2024, the national minimum wage is around $24.10 per hour or $915.90 per 38-hour week before tax. No employee can be paid less that this rate to perform their role. The only exception are junior employees who must be paid the applicable junior rate.

5. Pay Slips
Employers are required to provide pay slips to employees within one day of their payday. Pay slips must detail:
• Employee’s gross and net pay
• Deductions
• Any allowances
• Hours worked (if applicable)

6. Superannuation
Employers are required to contribute a minimum percentage of an employee’s earnings (currently 11.5% as of July 2024) into a superannuation fund to help employees save for retirement.

7. Deductions
Employers can make deductions from employee pay for various reasons, such as:
• Income tax (withheld according to the individual’s tax bracket)
• Salary sacrifice arrangements (letter from employee required)
Any other deductions require their employees permission, in writing, in order to deduct from the employees pay.

8. Overtime and Penalty Rates
Employees may be entitled to overtime pay for hours worked beyond their regular hours or at times deemed applicable for penalty rates such as weekends, public holidays, starting early or working late at night.

9. Casual Loading
Casual employees usually receive a casual loading (a higher hourly rate) to compensate for the lack of benefits like paid leave and job security. This rate is set by the applicable award but as a general guide is usually around 25%.

10. Reporting and Compliance
Employers must comply with various reporting requirements and ensure they meet their obligations under the Fair Work Act 2009. This includes keeping accurate records of hours worked, pay rates, and leave balances.

Failure to comply with the above requirements may lead to an employer found to be under paying employees or being in breach of the award. Fines, Penalties & back payments over a number of year may be awarded to employees for such breaches.​