What is Penalty rates?
Payroll & people. A plain-English definition for Australian business owners.
Penalty rates are higher rates of pay that apply when employees work outside ordinary hours — typically evenings, weekends, public holidays and overtime.
The applicable rates, and when they trigger, are set by the relevant modern award or enterprise agreement rather than a single national standard, so two businesses in different industries can face quite different penalty structures. Misapplied penalty rates are among the most common causes of underpayment in Australian SMEs, particularly in hospitality, retail and healthcare, and they are a standard focus of Fair Work Ombudsman audits.
In a connected back office this sits with the People hub, where Valont runs award compliance, hr & ir advisory and employer advice line for Australian SMEs as one team. The full definition set is on the glossary.
Talk to an Advisor
General information, not advice. For how this applies to your business, talk it through with a Trusted Advisor or start with the Business Health Check.