What is an annualised salary clause in a Modern Award?

Annualised salary clauses (often called AS-1 or AS-2 depending on the model) allow employers to pay an employee a single annual salary that bundles up the award's various components — base, overtime, penalties, allowances. The salary must be at least equivalent to what the employee would have received under the award if paid at the strict rates. Reconciliation must occur annually (or on termination) to verify the salary actually covered the entitlements.

Which Modern Awards have annualised salary clauses?

22+ awards have AS clauses, including: Banking Finance and Insurance, Clerks, Contract Call Centres, Hospitality (managers), Hydrocarbons Industry (Upstream), Legal Services, Manufacturing and Associated Industries, Marine Towage, Mining Industry, Oil Refining and Manufacturing, Pastoral, Pharmacy, Professional Employees, Restaurant Industry, Salt Industry, Telecommunications Services, and Wool Storage. Check your specific award.

What records must my employer keep for annualised salary reconciliation?

Under the annualised salary provisions, employers must keep records of: starting and finishing times each day, unpaid breaks taken each day, and (where AS-2 model applies) the employee's signature acknowledging the records. Failure to keep these records is a breach of the award. The records must be available for the annual reconciliation.

What happens at the annual reconciliation?

At the 12-month anniversary (or earlier if the employee leaves), the employer must compare: (a) the annual salary actually paid, against (b) what the employee would have been entitled to under the strict award (base + overtime + penalties + allowances based on the actual hours worked). If (b) is greater than (a), the employer must pay the difference within 14 days.

Annualised Salary Reconciliation Tool

Compare your annualised salary against the Modern Award rates. AS-1 and AS-2 clauses require employers to reconcile annually — and pay any shortfall within 14 days. Find out if you're owed back-pay.

Last verified: 2 August 2026Jump to calculator ↓

22+ Modern Awards have annualised salary clauses. Annual reconciliation is mandatory. Most employers either don't do it or get it wrong — significant back-pay claims commonly result.

Annual reconciliation

Enter your annualised salary, your award + classification, and your actual hours worked across the year. The tool calculates what you would have earned under the strict award rates.

Annualised salary ($)Modern AwardClassification

Hours worked (per week, averaged)

Saturday and Sunday hours are the part of your ordinary hours worked on weekends — only the penalty on top of the base rate is added for them. Overtime is hours beyond your ordinary hours.

Ordinary hours/weekOvertime hours/weekOf which Saturday hours/weekOf which Sunday hours/weekPublic holidays worked/year

Component	Annual amount
Ordinary hours	$52,245.44
Overtime (1.5×)	$0.00
Saturday penalty (extra above base)	$0.00
Sunday penalty (extra above base)	$0.00
Public holiday penalty (extra above base, 8h/day)	$0.00
Total award entitlement	$52,245.44
Annualised salary paid	$75,000.00

No shortfall — salary covered

$22,754.56 surplus

Your annualised salary exceeded your award entitlement for the year by this amount. No shortfall payment required.

Simplified calculation. Real reconciliation may include additional allowances (tool, travel, meal), multi-tier overtime (1.5× first 2hrs then 2×), and award-specific exclusions. Check the AS clause text in your specific award.

If you find a shortfall

The award requires the employer to pay the shortfall within 14 days. If unpaid, lodge a complaint with the Fair Work Ombudsman (13 13 94). Civil penalties up to $109,200 per contravention for a company with fewer than 15 employees, or $546,000 for one with 15 or more apply (from 1 July 2026). You can claim back-pay for up to 6 years under section 544 of the Fair Work Act 2009.

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General information and estimates only — not legal, financial or tax advice. Always check your specific award, agreement or contract, or a qualified professional, before you rely on the result.

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