What is a loaded rate?
A loaded rate is a single all-in hourly rate that absorbs penalties and loadings, which must still satisfy a better-off-overall check against the award.
A loaded rate (sometimes called an all-in or annualised hourly rate) is a single higher hourly rate that is meant to cover the base rate plus entitlements like overtime, penalty rates, and allowances that would otherwise be paid separately under a Modern Award.
A loaded rate is only lawful if it leaves the employee at least as well off as they would be under the award for the hours actually worked. Employers need to check the arrangement, much like a Better Off Overall Test, because an employee who works many penalty hours can end up underpaid even on a high-looking hourly rate.
Key facts
- •Combines base pay plus loadings and penalties into one higher hourly rate
- •Must leave the employee at least as well off as the relevant Modern Award would for the hours worked
- •Employers should run a better-off-overall style check and keep records
- •If the loaded rate falls short for the actual hours worked, the employer must top up the difference
- •Set out in the contract, enterprise agreement, or an annualised wage arrangement under the award
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Pay CalculatorFrequently asked questions
Is a loaded hourly rate legal?
Yes, provided the rate leaves you at least as well off as you would be under your Modern Award for the hours you actually work. If it doesn't, your employer must make up the shortfall.
How do I know if my loaded rate is high enough?
Compare your total pay against what the award would give you for the same hours, including overtime and penalties. If you work a lot of penalty hours, a flat rate can fall short — use a pay calculator or ask FairWork Mate to check.
FairWork Mate is an independent commercial service. We are not affiliated with, endorsed by, or associated with the Fair Work Ombudsman, the Fair Work Commission, or any Australian Government agency. Content is 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.