Penalty Rates Australia: Weekend, Public Holiday & Overtime Rates Explained
Understand penalty rates in Australia. Weekend, public holiday, and overtime rates explained by award. Includes hospitality, retail, and general industry examples.
What are penalty rates and why do they exist?
Penalty rates are higher pay rates for work performed at times that are generally considered unsociable — weekends, public holidays, late evenings, and early mornings — or for work beyond ordinary hours (overtime). They are a long-standing feature of the Australian workplace relations system, designed to compensate employees for the personal and social cost of working when most people have time off. Penalty rates are set by Modern Awards and enterprise agreements, not by the NES. Each of the 120+ Modern Awards has its own penalty rate structure. Penalty rates are expressed as a percentage of the employee's base rate of pay. For example, a 150% rate means the employee earns 1.5 times their ordinary hourly rate. If your base rate is $25/hr and you work at 150%, you earn $37.50/hr.
Common penalty rates by major awards
Penalty rate structures vary significantly between awards. Here are the permanent (full-time and part-time) rates for some of the most common awards. Hospitality Industry (General) Award: Saturday 125%, Sunday 150%, Public Holiday 225%, Evening (after 7pm) 115%. General Retail Industry Award: Saturday 125%, Sunday 150% (with transitional rates for some classifications), Public Holiday 225-250%. Clerks (Private Sector) Award: Saturday 150%, Sunday 200%, Public Holiday 250%. Building and Construction General On-site Award: Saturday first 2 hours 150%, Saturday after 2 hours 200%, Sunday 200%, Public Holiday 250%. These are examples only — always check the specific award that covers your employment for exact rates, as they can depend on classification level, time of day, and other factors.
Saturday vs Sunday rates
In most awards, Sunday penalty rates are higher than Saturday rates. This reflects the traditionally greater social and family cost of working on Sundays. Common patterns include: Saturday rates typically range from 125% to 150% of base, while Sunday rates range from 150% to 200%. The difference is especially pronounced in office-based awards like the Clerks Award (Saturday 150%, Sunday 200%). In the hospitality and retail sectors, penalty rates for Sundays were reduced in 2017 following a highly contested Fair Work Commission decision, which phased in lower Sunday rates over several years. The hospitality Sunday rate settled at 150% (previously 175%) and retail at 150% (previously 200%) for permanent employees. These changes remain controversial and are subject to ongoing political debate.
Public holiday rates
Public holiday penalty rates are the highest, reflecting the significant sacrifice of working on days of national or state significance. Most awards set the public holiday rate at between 225% and 250% of the base rate. At 250%, an employee on $25/hr would earn $62.50/hr for public holiday work. Many awards also specify a minimum engagement of 3 or 4 hours for employees called in on a public holiday, meaning even if you only work 1 hour, you are paid for the minimum engagement. Full-time and part-time employees who do not work on a public holiday that falls on their ordinary working day are entitled to be paid their ordinary rate for that day — they are not disadvantaged for having the day off. Casual employees are only paid if they work.
Overtime rates
Overtime rates apply when an employee works beyond their ordinary hours of work. For full-time employees, this is generally hours beyond 38 per week or beyond the daily ordinary hours set by the award (often 7.6 or 8 hours). Most awards set overtime at 150% (time and a half) for the first 2 or 3 hours, then 200% (double time) for any hours beyond that. Overtime on a Sunday is typically paid at 200% from the first hour. Overtime on a public holiday is usually 250%. Some awards distinguish between overtime that is authorised in advance and overtime that is not — you should clarify overtime arrangements with your employer. Managers and higher-paid employees may have overtime factored into their salary (annualised salary arrangements), but only if this is properly documented and the salary compensates for all overtime worked.
Casual vs permanent penalty rates
Casual employees receive penalty rates differently from permanent employees. In many awards, the casual penalty rate for weekends and public holidays is calculated on the base rate (not the casual-loaded rate), but is set at a different percentage that effectively includes the casual loading. For example, under the General Retail Industry Award, a permanent full-time employee earns 200% on a Sunday, while a casual earns 200% (which already reflects the loading component). In the Hospitality Award, casuals earn 150% on Saturday and 175% on Sunday (compared to 125% and 150% for permanents). The important thing is to check your specific award, as the interaction between casual loading and penalty rates varies between awards and can be confusing. Our Penalty Rate Calculator handles these differences automatically.
Recent changes and what to watch
The most significant recent change to penalty rates was the 2017 Fair Work Commission decision to reduce Sunday and public holiday penalty rates in the retail, hospitality, fast food, pharmacy, and restaurant awards. These reductions were phased in over several years and are now fully implemented. Since then, penalty rates have been adjusted annually in line with the FWC Annual Wage Review increases (the same percentage increase applied to base rates flows through to penalty rates). Looking ahead, the Albanese Government's Closing Loopholes reforms have not directly changed penalty rate structures but have strengthened enforcement mechanisms. If you believe you are not receiving the correct penalty rates, document your hours and rates and contact the Fair Work Ombudsman. Wage theft is now a criminal offence in most states and under Commonwealth law.
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Official resources
General information and estimates only — not legal, financial, or tax advice. Always verify with the Fair Work Ombudsman (13 13 94) or a qualified professional.
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