Answers to your most common payroll questions
For many business owners and managers, getting pay right can be a source of uncertainty – and stress. Between awards, classifications, penalty rates and employee entitlements, there can be a lot to navigate, and keeping on top of changing requirements isn’t always easy.
We asked Tanya Curtin, Head of Workplace Services at Business Chamber Queensland, to answer common questions employers have about pay rates.
Q: What are the main things employers need to look at when setting pay rates?
There’s rarely a simple, one-size-fits-all answer. Every business is different, and understanding pay obligations often involves navigating awards, classifications and industry-specific entitlements.
In Australia, most jobs are covered by a modern award, which sets minimum pay rates and employment conditions for employees in particular industries and occupations.
To navigate some of the complexities, I’d suggest employers focus on five key areas when setting pay rates to ensure compliance, competitiveness, and workforce sustainability:
- Determine the legal minimum rate first
- Check employee classification carefully
- Include all pay-related entitlements – including overtime, penalty rates, shift loadings, allowances, casual loading, annual leave loading (where applicable)
- Review market competitiveness
- Monitor annual wage increases
Q: How do you work out which award and classification applies to an employee?
The starting point is understanding the work the employee actually performs and the nature of your business. From there, you can identify which award applies and then work through the classification structure within that award.
The goal is to find the classification level that best matches the employee’s duties, skills, experience and level of responsibility. Sometimes the answer is clear, and sometimes it requires more detailed assessment. That’s why many employers find it helpful to seek advice, particularly when they’re onboarding staff, creating new roles or making changes to existing positions. Working out the correct award and classification is often the most challenging part of setting pay rates, and it’s where many underpayment issues start.
Q: How often should employers review employee pay rates?
At a minimum, it’s a good idea to review pay rates each year. The Fair Work Commission reviews modern award wages and conditions annually, with updates generally taking effect from July.
But annual reviews are only part of the picture. It’s also worth revisiting pay arrangements whenever something changes within your business, such as an employee taking on new responsibilities, changes to award rates or changes to working arrangements.
Regular reviews can help employers identify any issues early and provide confidence that their pay arrangements remain appropriate.
Q: What’s your advice for employers who are unsure about pay rates or classifications?
My advice is simple…don’t guess. But don’t feel like you have to work it all out on your own. Awards can be complex, and it’s not unusual for employers to have questions, particularly as their business grows, roles evolve or workplace requirements change.
If you’re unsure, seeking advice early can provide peace of mind and help you make informed decisions. Often, employers simply want reassurance that they’re on the right track, and sometimes a quick review can help identify areas that may need attention before they become bigger issues. The cost of a brief review is typically far less than the cost of backpay, penalties, payroll audits and reputational damage resulting from an underpayment issue.
