Every employee should be fairly paid for working. It’s important to understand what you should be paid and to understand the different types of pay you may be offered. Your pay depends on a range of factors i.e. the type of work, your qualifications, and your experience. There are many components to an employee’s pay:
Your base rate is the cash component of your wage or salary. In simple terms, this is the money that appears in your bank account each payday.
Your ‘total package’ is your base rate plus the dollar value of all your other entitlements combined.
Many of our members like engineers and scientists are paid an annual salary. Some members like pharmacists, translators and interpreters are paid by the hour.
Compulsory superannuation contributions
Under the superannuation guarantee, employers must pay superannuation contributions of 9.5 per cent of your ordinary time earnings if you earn $450 or more (before tax) per calendar month). This applies to all workers (full-time, part-time and some casual workers.
In some instances, an Award, Enterprise Agreement (EA) or employment contract can have extra terms about superannuation.
If you believe you haven’t be paid super, you can use the Australian Taxation Office (ATO) tool, “Am I entitled to super” or contact us to point you in the right direction.
Loading and penalty rates
Loading apply to casual employees. They are also a percentage increase on your base rate, and they are put in place to compensate a casual employee for the lack of other entitlements such as sick pay, holiday pay and the like.
Penalty rates are percentage increases in your base hourly rate for work that is performed out of hours, on weekends or for some other special reason.
If your job is covered by an Award it will provide the penalty rates and loadings for your specific role.
Allowances are amounts paid in exchange for some form of burden that you have to personally bear in the course of doing your job.
You may receive an annual car allowance to pay for the cost of owning and maintaining your own car if it’s necessary for you to have a car to do your work. You may receive a meal allowance if you are required to work after hours to do your job, or a travel allowance if you work in a remote area. You can receive an allowance for almost anything if your employer feels it is necessary for you to do your job, and you are willing to take on the burden.
Please note: An allowance is not an automatic entitlement. Unless there is an express allowance entitlement in your Award, EA or employment contract you don’t have the right to demand it. For example, you will not be entitled a meal allowance simply because you’ve chosen to stay back late at work.
Overtime, am I entitled?
You’ll only be entitled to overtime pay if you’re under an Award, EA or an employment contract that specifies the entitlement.
You will need to refer to the Award, EA or contract that confers the entitlement for details.
In professional roles you’ll commonly find that your total package is seen as adequate compensation for occasional overtime, described as ‘reasonable additional hours’. In other words, your salary has already considered any overtime you may be required to work.
Even if this is the case there isn’t anything preventing you from negotiating an overtime rate if you will be working more hours than expected, for example, to complete a particularly large job or project.
Anything else about my pay?
Every year, the Fair Work Commission reviews employees’ minimum wages. The current the minimum wage is $18.93 per hour or $719.20 per 38-hour week. Employees in Australia can’t get less than this.
Any changes to the national minimum wage is effective from the first full pay period on or after 1 July every year.
If your job is covered by an Award, it will provide a minimum wage for your specific role, but an Award minimum, by law, cannot be less than the national minimum above.
How do I negotiate a pay rise?
Negotiating a pay rise is about convincing your employer you’re worth more. You need to demonstrate that higher pay is justified.
The most effective starting point is being able to demonstrate your work has led to increased productivity. Other factors, such as lengthening hours and increasing workload and responsibility, are also factors that lend strength to your argument for a pay rise.
Some jobs require an annual performance review or appraisal. Often these are linked to a set of performance indicators. Look into the appraisal process at your workplace. It can be critical to your pay negotiation. A good appraisal may be the right time to ask for that pay rise, whilst a bad appraisal could land you in a performance management program.
Almost no employment contracts include an automatic pay increase clause. So, you usually don’t have a contractual right to demand a pay increase. Even contracts that refer to annual performance or salary reviews almost always reserve the company’s right to not give you a pay increase, regardless of how well you’ve performed.
This publication is general information only and is not intended to be used as legal advice or a substitute for legal advice.