- Retail award penalty rates, as of October 2026
- What that looks like in dollars for a Level 1 retail employee
- Penalty rates versus overtime
- The public holiday trade the award allows
- Arrangements that can replace penalty rates
- How to work out the right penalty rate
- Records the Fair Work Ombudsman will ask for
- My verdict
- Frequently asked questions
Penalty rates are the higher pay rates an Australian employee must get for working particular hours or days, such as evenings, weekends and public holidays. The exact percentages come from the award or registered agreement that covers the job, so a retail worker's Sunday rate isn't the same as a nurse's or a chef's.
The Fair Work Ombudsman is clear that there's no single national penalty rate. If an enterprise agreement or other registered agreement covers the business, the penalty rates are in that agreement. If not, they're in the modern award for the industry or occupation. That's why the most useful thing I can show you is a real award table, and the General Retail Industry Award is the one most small businesses meet first.
Retail award penalty rates, as of October 2026
Clause 22 of the General Retail Industry Award 2020 sets these rates for ordinary hours, as a percentage of the employee's minimum hourly rate under the award:
| When the ordinary hours are worked | Full-time and part-time | Casual (includes the casual loading) |
|---|---|---|
| Monday to Friday, after 6.00 pm | 125% | 150% |
| Saturday, all ordinary hours | 125% | 150% |
| Sunday, all ordinary hours | 150% | 175% |
| Public holiday, all ordinary hours | 225% | 250% |
The casual column already includes the 25% casual loading. So a casual's Sunday rate is 175% of the minimum hourly rate in total, not 175% plus another loading on top. Getting that wrong in either direction is one of the commonest retail payroll errors.
What that looks like in dollars for a Level 1 retail employee
Schedule B of the award turns the percentages into hourly amounts. For a Retail Employee Level 1, the most common entry-level classification, the award lists:
| Time worked | Full-time and part-time | Casual |
|---|---|---|
| Ordinary hours, Monday to Friday | $27.81 | $34.76 |
| Monday to Friday after 6.00 pm | $34.76 | $41.72 |
| Saturday | $34.76 | $41.72 |
| Sunday | $41.72 | $48.67 |
| Public holiday | $62.57 | $69.53 |
These are award minimums as of October 2026. They change each year after the Fair Work Commission's annual wage review, with most changes starting from the first full pay period on or after 1 July.
Penalty rates versus overtime
Penalty rates apply to ordinary hours that fall at certain times. Overtime is different: it's for hours beyond the ordinary hours, and it has its own, higher table in the retail award:
| Overtime worked | Full-time and part-time | Casual |
|---|---|---|
| Monday to Saturday, first 3 hours | 150% | 175% |
| Monday to Saturday, after 3 hours | 200% | 225% |
| Sunday | 200% | 225% |
| Public holiday | 250% | 275% |
Don't stack the two. An overtime hour on a Sunday is paid at the Sunday overtime rate, not the Sunday penalty rate plus an overtime percentage.
The public holiday trade the award allows
Here's an option many retail owners don't know exists. Under clause 22.2, an employer and a full-time or part-time employee can agree that, instead of the extra 125% for public holiday hours, the employee is paid their ordinary minimum hourly rate and gets the same amount of paid time added to their annual leave, or takes it off within 28 days. Any of that time not taken within 28 days must be paid out.
Arrangements that can replace penalty rates
The Fair Work Ombudsman lists a few arrangements that can change how penalty rates are paid, including individual flexibility arrangements and a guarantee of annual earnings for employees on at least the high income threshold. The catch is the same for all of them: the overall amount paid has to be at least what the employee would have got under the award or agreement. A salary or contract that's meant to cover penalties has to be big enough to cover them.
How to work out the right penalty rate
- Find the award or registered agreement that covers the job. If there's an enterprise agreement, its rates apply.
- Find the employee's classification in that award, because penalties are a percentage of that classification's minimum hourly rate.
- Check whether the hours are ordinary hours or overtime, and use the right table.
- For casuals, use the casual column, which already includes the loading.
- Use the Fair Work Ombudsman's Pay and Conditions Tool or the award's pay guide to confirm the dollar amount for that period.
Award-free employees fall back on the National Minimum Wage, which is $26.44 an hour as of 1 July 2026, and the National Employment Standards. For the rest of the pay picture, see our guide to the minimum wage in Australia.
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Records the Fair Work Ombudsman will ask for
If a penalty rate dispute reaches the Fair Work Ombudsman, the first thing anyone looks at is the roster and the pay slip side by side. Keep rosters that show start and finish times, not just total hours, because a shift that runs past 6.00 pm on a weekday changes the rate for the hours after six. Make sure each pay slip shows the hours paid at each rate, so an employee can see their Saturday and Sunday hours were paid at the higher percentages. And when the July wage review lands, update the award rates in your payroll system before the first full pay period that starts on or after 1 July.
My verdict
Weekend and evening loadings aren't optional extras or a goodwill gesture; they're the minimum for the hours your staff work. If you employ casuals in retail, print the casual column of the award table and pin it next to the roster. The two mistakes to guard against are adding the casual loading twice, and forgetting the penalty altogether for weekday evening hours.
Your loadings depend on the award that covers you, and our modern awards guide explains how to find it.
Frequently asked questions
What are penalty rates?
Penalty rates are higher pay rates an employee must be paid for working particular hours or days, such as evenings, weekends or public holidays. The rates come from the award or registered agreement that covers the job.
What is the Sunday penalty rate in retail?
Under the General Retail Industry Award, Sunday ordinary hours are paid at 150% of the minimum hourly rate for full-time and part-time employees and 175% for casuals, including the casual loading.
What is the public holiday rate in retail?
Public holiday ordinary hours are paid at 225% of the minimum hourly rate for full-time and part-time employees and 250% for casuals under the retail award.
Do casuals get the casual loading on top of penalty rates?
Not in the retail award's casual column, which already includes the 25% casual loading. The casual Sunday rate is 175% in total.
Can a salary include penalty rates?
Yes, but the overall amount paid must be at least what the employee would have received under the award or agreement, including penalties.
