Ensuring that employment conditions are met goes further than making sure base wages are paid at the correct rate.  Correctly applying, communicating and paying loadings, penalties and allowances is also crucial to “getting it right”.  Recent cases across many industries, including our own fuel retail and fuel transport, are a reminder to all operators that now is the time to review requirements and ensure that there are systems in place that deliver on all of those requirements, not just base wages.

Base Rate

It is vitally important that the correct employment instrument and classification under the instrument is applied to any employee.  The employment instrument and job classification dictate the Base Rate that the employee will receive.  However, other factors, such as the employees status (permanent or casual) and the employee’s age, will also impact on what the Base Rate for that employee will be.  It is imperative that businesses understand and communicate the correct employment instrument, the employee’s classification under that instrument, the employees status and take into account the employees age when determining the Base Rate to apply.

Loadings and Penalties

Loadings and penalties are amounts above the Base Rate that an employee is entitled to when working at certain times or under certain conditions.  Loadings and penalties vary from Award to Award, but are typically factored on the Base Rate (which is why it is so important to get the correct Base Rate otherwise you could be compounding an error).  For example, when an employee works on a weekend they are entitled to a penalty of 50% of the Base Rate in addition to the Base Rate.  In real terms, if the Base Rate was $10 per hour and the employee was working on a weekend, they would be entitled to the usual $10 an hour PLUS $5 an hour, totalling $15 per hour worked on a weekend.

Many Awards have many different loadings and penalties, and applying them correctly can be difficult.  Businesses should research the Awards covering their staff and seek advice and support from industry associations, lawyers or other professionals if in doubt.


Allowances are set amounts that employees may be entitled to due to the type of work they are carrying out, or the designation of additional duties that have been passed onto them.  Allowances can be per incident, per day or per week.  Like loadings and penalties allowances differ from Award to Award.  One common example of an allowance is the First Aid Allowance, which is an entitlement for employees who have been designated by the business as a First Aid Officer.  This allowance is most often a percentage of a Standard Rate under the Award.  It is important to note that the Standard Rate, in an Award, is a specific figure and is not, as many businesses assume, the employees own Base Rate.  The Standard Rate in any Award can be located in the definitions section of that Award.

Here to Help

ACAPMA members are reminded that ACAPMA Employment Professionals are available to assist members on 1300 160 270 or you can email employment@acapma.com.au.

HR Highlights are things to consider, implement and watch out for in your business. They are provided as general advice and you should seek further advice on your situation by calling 1300 160 270 and speaking to one of ACAPMA Employment Professionals its free for members. Click here to apply for ACAPMA membership.