Apprentice pay

Payroll

What is a pay slip?

A pay slip is a document that an employer gives to an employee at the end of each pay cycle. A pay slip gives the employee a breakdown of important pay-related information, such as their total wages earned, as well as any income tax deducted, overtime, holiday pay, bonuses, or commissions. Do employers have to give pay slips? As an Australian employer, you may ask yourself whether you need to give your employees a pay slip. It is a legal requirement in Australia for employers to supply employees with pay slips. As an employer, it’s vital to ensure all the information given in pay slips is up to date and accurate, which can help avoid any pay disputes with your employees. What information should be in an employee’s pay slip? There are several important pieces of information that every employee’s pay slip should cover as prescribed by the Fair Work Act 2009 and the Fair Work Regulations 2009. A pay slip must include all of the following: The employer's name. The employer's ABN (if any). The employee's name. The date of payment. The pay period. The gross and net amount of payment. Any loadings (including casual loading), monetary allowances, bonuses, incentive-based payments, penalty rates, or other separately identifiable entitlement paid. For example, a note could be included on a pay slip that the hourly rate incorporates the relevant casual loading. Additionally, where relevant, a pay slip must include any of the following: If the employee is paid an hourly pay rate, the ordinary hourly pay rate and the number of hours worked at that rate and the amount of payment made at that rate. If the employee is paid an annual rate of pay (salary), the rate as at the last day in the pay period. Any deductions made, including the name, or the name and number, of the fund or the account of each deduction. If the employer is required to make Superannuation contributions for the benefit of the employee: The amount of each contribution the employer made or intends to make during the pay period. The name, or name and number, of any super fund into which the contributions were made or will be made. However, when an employer needs to give a new employee a pay slip within 14 days of their first pay day, they don’t have to include the super fund name or number if: The employee hasn’t notified the employer of their choice of super fund. The employer hasn’t been able to obtain the employee’s stapled super fund details from the Australian Taxation Office (ATO). How and when should pay slips be given? Pay slips can be issued as a hard copy (on paper), electronically (email), or both. With most companies supporting sustainability, it’s common to supply pay slips electronically via an email or through your company’s HR platform. Pay slips contain sensitive information, so in the interests of maintaining data privacy it’s important to ensure paper copies of pay slips and any financial data are securely stored throughout the payroll process. Pay slips must be given to an employee within 1 working day of pay day, even if an employee is on leave. How should employers create and format pay slips? In terms of the format and layout of the information in your pay slips, the order shown above as advised by the Fair Work Ombudsman as outlined above should work perfectly. Rather than calculating pay slips manually with Excel, there are a range of software solutions that allow you to easily automate the process. Pay slip generators offer customisable templates, which the software’s AI then populates with information based on an employee’s unique payroll data. How do pay slips help the payroll process? Creating pay slips with all the critical information can help your payroll staff with record keeping, ensuring they have accurate and complete data for each pay cycle. Pay slips also ensure employees receive the correct pay and entitlements. Do employees have a right to ask for pay slip information? If your employees’ pay slips don’t have enough information, they have a right to ask you to provide the things they want to know. In this case, you’re obligated to supply any records they request related to hours worked, wages, holiday, leave balances, taxes, commissions, and superannuation payments. If there is anything about the information you supply that they don’t understand, you must explain it when an employee asks. Grow your business with Peninsula Understand complex wage and pay entitlements, staff management, modern awards, and health and safety laws with the help of Peninsula's team. With access to software that is intuitive and integrated with your HR policies and processes, you can manage staff and leave entitlements seamlessly. A 24/7 advice team is available for clients to call and ask any questions they may have, big or small. Contact our team to learn more. This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.

Payroll

Underpayment of Wages

An underpayment is when an employee is not paid their minimum entitlements for the work they do and when they do it. These entitlements may include overtime rates, penalty rates, payment for annual leave or leave loading, and allowances, for example. Employees must be paid at least the minimum entitlements for the job they do and the industry they are in. The minimum amount of pay they should receive will generally depend on the applicable industrial instrument, e.g. a modern award or an enterprise agreement. If the employee is award free or not covered by a registered agreement, then the Fair Work Commission’s Minimum Wage Order will determine their minimum pay rate in accordance with the national minimum wage. An employment contract may provide for a higher wage than the minimum entitlement. Identifying wage underpayment You may not know you have underpaid an employee until the employee raises the matter or the Fair Work Ombudsman conducts an audit. To help identify if you are paying your employees correctly you should review wages against the relevant industrial instrument and/or the national minimum wage. Make sure you keep up to date with any pay increases or award changes, e.g. annual minimum wage increases, which usually take place from the first full pay period on or after 1 July each year. Ensure the employee is employed under the correct award and at the appropriate classification level under that award for the job they do. The employee’s classification level or pay rate may change, or they may be entitled to receive loadings or allowances as they gain more experience, complete further training, or are promoted to a supervisory level. Bear in mind that a junior or an apprentice pay rate may increase in different ways, which can be based upon age, time served in role or competency. Steps to correcting an underpayment There are a series of steps to follow in order to correct an underpayment once identified First of all, work out when and how long the employee was underpaid – this is the so-called underpayment period. Next, check the employee’s time and wages records for that period to work out how much the employee was actually paid. This is the total amount the employee was paid for the underpayment period and is the gross amount that you paid the employee before tax was deducted. Work out how much the affected employee should have been paid in wages for the underpayment period, determine and record any other entitlements owing for the period separately, and check whether you need to pay any additional tax or superannuation. Then subtract the total amount paid to the employee for the underpayment period from the total amount the employee should have been paid – the difference is the underpayment amount. Discuss the underpayment amount with the employee. Explain what caused the underpayment, what you have done to fix it going forward, how you have calculated the amount the employee has been underpaid, and when the employee will be back paid the amount owing. If you cannot afford to make the payment immediately, please seek advice as to next steps. Peninsula can help you pay your employees correctly and keep you up to date with wage increases. Call us for free initial advice on 1300761935. Keeping pay records As part of their workplace obligations, employers should keep comprehensive employee records, and give employees payslips that include (amongst other things) the pay period, the gross and net amount paid to the employee, the rate of pay and if an hourly rate, the amount of hours worked at that rate as well as details of any penalty or overtime rates and hours worked. The payslip should also provide details of any loadings, allowances or other entitlements or deductions for that period. The Act further provides that employers must keep wage and time records for 7 years. This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.

Payroll

Pro Rata Salary

In the world of employment and payroll, understanding the concept of a pro rata salary is crucial for both employers and employees. This term, often seen on payslips and discussed during contract negotiations, can sometimes be a source of confusion. This article aims to demystify the concept of a pro rata salary, explaining its meaning, significance, and how it's calculated, ensuring clarity for all involved. What does pro rata salary mean? A pro rata salary is a portion of a full-time salary adjusted for the hours worked, ensuring part-time employees receive fair pay. Essentially, it's a way of calculating wages for part-time employees who don’t work full-time hours or those who haven't worked the full year. It ensures they receive a salary that accurately reflects the time they've contributed. Why is pro rata salary important? Understanding and accurately calculating pro rata pay is essential for maintaining transparency and fairness in the workplace. This approach respects the principle of equal pay for equal work, adjusted for the proportion of time worked. Calculating pro rata salary Pro rated salary is calculated by dividing the full-time salary equivalent (FTE) by the total workdays in a pay period, then multiplying by the actual workdays the employee works in that period. Imagine an employee named Alex who works part-time in a marketing role at a firm in Sydney. The standard full-time role in Alex's position comes with an annual salary of $60,000, based on a 38-hour workweek. However, Alex works 19 hours a week to balance work with postgraduate studies. Step-by-step calculation Full-Time Annual Salary: $60,000 for a role based on a 38-hour week. Actual Hours Worked by Alex: 19 hours per week. Pro Rata Salary Calculation: Pro Rata Salary = 19 ÷ 38 × $60,000 = $30,000 So, Alex's pro rata annual salary is $30,000. Calculating monthly pro-rated earnings To understand monthly earnings, divide the annual pro rata salary by 12: Monthly Earnings = $30,000 ÷ 12 = $2,500 Calculating weekly pro rated earnings For weekly earnings, considering Alex works 19 hours: Weekly Earnings = $30,000 ÷ 52 = Approximately $577 Calculating hourly pro-rated earnings To find out the hourly rate, divide the weekly earnings by the number of hours worked: Hourly Rate = $577 ÷ 19 = Approximately $30.37 This calculation shows that despite working half the full-time hours, Alex earns an hourly rate that equates to the full-time role, ensuring fair compensation for the time worked. Pro rata annual leave entitlement Under Australian law, full-time employees are entitled to four weeks of paid annual leave. For part-time employees like Alex, this pro rata holiday entitlement is calculated as follows: Annual Leave (weeks) = 19 ÷ 38 × 4 = 2 Therefore, Alex is entitled to two weeks of paid annual leave per year, reflecting the part-time hours. Pro rata sick leave entitlements In addition to annual leave, sick leave entitlements are another crucial aspect of employment benefits that are affected by pro rata calculations. According to the Australian National Employment Standards (NES), full-time employees are entitled to 10 days of paid sick leave, also known as personal and carers leave per year. For part-time employees, this entitlement is also calculated on a pro rata basis relative to their hours worked. For instance, if Alex works half the hours of a full-time employee, Alex would be entitled to five days of paid sick leave per year. This ensures that part-time employees like Alex have access to necessary health-related leave without financial penalty. Reflecting a fair and equitable approach to employee welfare. Pro rata salary on payslips On a payslip, a pro rata salary is typically listed in the same way as a full-time salary but calculated to reflect the part-time hours worked. It's important for employees to review their payslips to ensure the pro rata calculation has been accurately applied. Using a pro rata salary calculator For those who prefer an automated approach, a pro rata salary calculator can simplify the process. These tools require you to input the full-time salary, the number of hours a full-time employee works, and the actual hours worked by your part-time employee. Then, you can easily calculate a pro rata salary based on the data entered. Understanding pro rata wage The term ‘pro rata wage’ often refers to the hourly or weekly equivalent of a pro rata salary, offering a more granular view of proportional pay. This can be particularly useful for temporary contracts or roles with variable hours. Pro rata salary legal requirements and best practices Navigating a pro rata salary requires an understanding of your legal obligations and implementing best practices. Here's what you need to know: Fair Work Act and Awards The Fair Work Act 2009 sets minimum pay conditions for all Australian employees, including those on pro rata salaries. Relevant Awards specific to your industry may contain additional entitlements and calculations for a pro rata salary. Familiarise yourself with the National Minimum Wage and any applicable Award to ensure compliance. Avoid underpayment and ensure compliance Underpaying employees, even unintentionally, carries significant penalties. Always double-check your calculations using available resources like the Fair Work Ombudsman's online pay calculator or seek professional advice from experts like Peninsula. Ensure you maintain accurate records of employee hours and pro rata calculations, and stay updated on changes to legislation and Awards. Best practices for communication and transparency Clearly outline the pro rata salary and calculations in the employment contract and letter of offer. Explain how annual leave, sick leave, and other employee entitlements are pro rated for part-time employees. Be transparent about the expected work schedule and overtime pay policies. Regularly communicate any changes to pay or entitlements with your employees. Need support with pro rata salary? For employees and employers navigating pro rata salary calculations, understanding the specifics can make a significant difference in ensuring fair workplace practices. If you require further clarification or assistance with pro rata calculations and their implications, professional advice can be invaluable. Contact the experts at Peninsula today. This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.

Payroll

Penalty Rates

Penalty rates are additional payments to employees working outside regular hours, such as evenings, weekends, or public holidays. Penalty rates are determined by the Fair Work Commission in Australia. For small businesses and employers, getting penalty rates right is crucial. These penalties also motivate employees to support employers during busy periods and weekends. In this guide, we explain the history of penalty rates, different types of penalties, and employer obligations around penalties in Australia. What are penalty rates? Penalty rates are higher pay rates that employees in Australia may be entitled to when working on weekends, public holidays, overtime, early in the morning, and/or late at night, provided they are covered by an Award, enterprise agreement, or registered agreement. Penalty rates are higher pay rates that employees in Australia may be entitled to when working on weekends, public holidays, overtime, early in the morning, and/or late at night, provided they are covered by an Award, enterprise agreement, or registered agreement. The exact rate, multiplier, and loading to be applied are outlined in the relevant industry Award or agreement. In Australia, penalty rates differ across industries and are determined by the Fair Work Commission. Weekend penalty rates Weekend penalty rates are higher pay rates applied to employees who perform work on the weekend. The purpose of weekend pay rates is to offer compensation for employees who work outside “normal” weekday hours. Not all workplace agreements or Modern Awards require payment at a higher rate. This will depend heavily on the applicable award / industrial instrument, Public holiday rates For public holidays, penalty rates are usually significantly higher. In the same awards mentioned above, public holiday rates can be double the ordinary hourly rate depending on the specific award or agreement. Allowances and extra payments Some employees are entitled to extra payments due to the nature of their jobs. This may apply to employees who do certain tasks or have a unique skill, use their tools and equipment, or work in harsh or dangerous conditions. Employees may also be entitled to a meal allowance when working overtime. An employee is entitled to allowances as compensation for: Tools and equipment. First aid kits. Special clothing and uniforms. The cost of travel, fares, and tollways. Cars and phones provided by the company. Associated costs for working in a particular industry. Most employees may also receive additional compensation in the form of annual leave loading, a percentage of their base wage paid to them when they take annual leave. This extra payment is meant to provide employees with additional financial support during their time off. An employer’s obligation to pay annual leave loading may be outlined in their workplace agreement or Modern Award. If you have any questions about employee entitlements or your payment obligations as an employer, call the Peninsula team for expert advice.

Payroll

The Importance of Payroll Accuracy

Australia has some of the most complicated pay structures in the world and 121 different Modern Awards. Calculating employee pay correctly can be challenging, especially if you have full-time, part-time, and casual employees or apprentices at different stages of their training or multiple awards applying across your workforce. You also need to be fully aware of overtime rates, penalty rates, loadings, and allowances. Wrong data in, wrong pay out As an employer you’re ultimately responsible for ensuring your employees are paid correctly, on time, and they receive their full entitlements and benefits. Whether you use an automated or manual payroll system, or outsource your payroll to a specialist service provider, you’re responsible for any mistakes made when calculating the pay of your employees. You also need to be aware of the various employee and payroll tax rates, and compulsory superannuation payments. Paying employees incorrectly could result in incurring severe penalties by the ATO or Fair Work Ombudsman. You've heard of cases where businesses had to backpay workers or be hit with massive fines. In just one year (2023), the Fair Work Ombudsman recovered over $500 million in unpaid wages. How Peninsula can help If you’re unsure of the various entitlements, current awards for your industry, or the different pay rates that may apply to your employees, our team can offer pay rate advice and insights for your business and industry. Although Peninsula does not provide payroll services or offer any financial advice, we can help you better understand your wage obligations to help you stay compliant and avoid costly mistakes. Wage theft vs payroll error Not paying employees is a serious issue but there is a big difference between genuine payroll errors and wage theft. When a business underpays employees, avoids entitlements, and dodges superannuation, it is a deliberate choice to avoid paying wages. This is illegal and called wage theft in Australia. Payroll error is something that happens one-off or occasionally due to technology or human errors and misunderstandings. Some of the key differences between wage theft and payroll are: wage theft is ongoing and can be happening for months or years, payroll happens once or occasional there is an attempt by the business to fix the payroll error while wage theft is covered up or ignored by the business Several businesses have often claimed they made a mistake while committing wage theft. At the end of it, intent makes a difference. Businesses and employers knowingly engage in wage theft while payroll errors are unintentional. As of 1 January 2025, wage theft is a criminal offence in Australia. Common payroll errors Underpayments Common payroll errors include underpaying employees. Under the Fair Work Act 2009, employers must rectify underpayments as soon as they are identified. Overpayments Overpayments happen when an employer mistakenly believes an employee is entitled to the pay, or because of a payroll error. Fixing an overpayment requires agreement of the employee. If the employee agrees to repay the money, a written agreement should be made which sets out the reason for the overpayment and amount of money overpaid, and the way repayments will be made. Steps to manage payroll errors Once a payroll error has been made, employers can take steps to rectify the error: Identify the error, the cause, and the accurate amount owed to the employee Communicate with the employee clearly about the error, mention all details including timeline and suggest solutions Once the employee has agreed to the solution, make a written agreement setting out relevant terms and conditions If you are dealing with complex payroll issues, consult a professional Grow your business with Peninsula Peninsula offers comprehensive HR and WHS services for businesses including resources, advice, and software. Get access to a 24/7 advice line when you become a Peninsula client. Call us on 1300750491 to learn more. This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.

Apprenticeship

Australian apprentice wages

Mature age apprenticeship wages

Pay rates for traineeships

Pay increases during an apprenticeship

Completion of apprenticeship

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Related Guides

What is a pay slip?

Underpayment of Wages

Pro Rata Salary

Penalty Rates

The Importance of Payroll Accuracy

Related Guides

What is a pay slip?

Underpayment of Wages

Pro Rata Salary

Do you have any questions regarding Payroll?