Bookkeeping & Payroll for Retail Shops

Most retail employees are covered by the General Retail Industry Award 2020, which sets minimum rates by classification level. Those minimums are reviewed by the Fair Work Commission every year and rise from the first full pay period on or after 1 July, the 2026 review lifted modern award minimum wages by 4.75%. On top of the base rate, weekend work attracts penalty rates and public holidays higher rates again, and the percentages depend on classification and employment type, casual employees have their own rates in the award's penalty table. Because the exact dollar figure changes each July, confirm the current rate for the relevant classification on the Fair Work Pay Calculator before you set pay or configure your POS and payroll.

Identify which days they worked and apply the rate the award sets for each: the ordinary rate for weekday hours, and the Saturday, Sunday and public holiday rates for that employee's classification and employment type (casuals have their own rates). Purely to illustrate the arithmetic, if an employee's ordinary rate were $25/hour and the award's Saturday and Sunday rates for their classification were 125% and 150% of it, a part-time assistant who works Wednesday 6 hours, Saturday 4 hours and Sunday 3 hours would be paid (6 × $25) + (4 × $25 × 1.25) + (3 × $25 × 1.50). Take the actual percentages and the employee's current classification rate from the Fair Work Pay Calculator, and track hours worked daily with a time-and-attendance system to ensure accuracy.

Where the award provides it, most modern awards, including the General Retail Industry Award, provide an annual leave loading, commonly 17.5% of the ordinary rate; the percentage and any alternative for employees who would have received penalty rates come from the award's annual leave clause, so check the current clause. The loading applies to leave taken during the year and is generally also payable on untaken leave paid out at termination. If an employee leaves, calculate final leave pay as accrued leave hours × ordinary hourly rate, plus the loading where it applies.

Minor discrepancies (under 0.5%) are normal due to rounding and human error. Investigate larger discrepancies by: (1) reviewing the till records for voids or refunds, (2) checking if all staff logged in/out correctly, (3) reviewing security footage if needed, and (4) identifying patterns in which shifts or staff are responsible. Once investigated, record the discrepancy in your cash reconciliation sheet. Fair Work and ATO expect reasonable reconciliation processes. Don't dock employee pay for shortages without a thorough investigation and documented evidence of responsibility.

Under the Fair Work Act definition that has applied since 26 August 2024, a casual employee is one whose employment has no firm advance commitment to ongoing work, assessed on the real substance, practical reality and true nature of the relationship, not just the label in the contract, and who is paid a casual loading or a casual rate. They're paid a casual loading on top of the base rate (25% under the General Retail Industry Award 2020, clause 11.1, read 8 September 2026) instead of paid annual and sick leave. A part-time employee has a guaranteed minimum number of hours per week and is entitled to paid annual leave and long service leave (after meeting eligibility). When engaging retail staff, clearly document whether they're casual or part-time, as misclassification can lead to back-pay claims. The casual loading is a percentage set by the award, so the dollar amount moves with the base rate when award rates change each July. A regular pattern of work on its own does not make a casual permanent, but casuals can move to permanent employment by agreement or through the National Employment Standards' employee choice pathway (Fair Work Ombudsman, read 8 September 2026).

Casual workers are not entitled to paid annual leave under the General Retail Industry Award 2020; instead they receive a casual loading on top of the base hourly rate (25% under that award, clause 11.1, read 8 September 2026). A casual can move to permanent employment by agreement at any time, or through the National Employment Standards' employee choice pathway: after 6 months (12 months with a small business employer) a casual who believes they no longer meet the casual definition can give written notice, and the employer must respond in writing within 21 days, refusing only on the grounds the Act allows (Fair Work Ombudsman, 'Becoming a permanent employee', read 8 September 2026). Once the change takes effect, accrue leave from that date forward. Some state or enterprise agreements may provide additional leave provisions, check your specific agreement.

Keep records of: employee name, address, and dates of employment; hours worked each day; rates of pay (including penalty rates applied); amounts paid; leave accrued and taken; annual leave loading applied; and any agreed variations. Records must be kept for 7 years. Use a time-and-attendance system or till records linked to payroll. Fair Work may request these to verify award compliance. Poor records result in penalties even if you believe you paid correctly.

Daily reconciliation is best practice. At close of business each day, print the till report, count physical cash, and compare. Investigate discrepancies immediately. Keep a cash reconciliation log with date, amount, discrepancy, and explanation. Weekly and monthly reconciliation against GL records helps spot patterns (e.g., a particular shift is consistently short). Some retail systems automate this. If discrepancies are significant or recurring, review till procedures, staff training, and security measures.

Misclassifying a part-time employee as casual (or vice versa) can result in: back-pay liability for unpaid leave entitlements, Fair Work enforcement action, civil penalties (the current maximums are on the Fair Work Ombudsman's litigation page), and reputational damage. Since 26 August 2024 the Fair Work Act defines a casual by the absence of a firm advance commitment to ongoing work, assessed on the real substance, practical reality and true nature of the relationship, whether work can be offered and refused, whether ongoing work is reasonably likely, whether permanent staff do the same work and whether there is a regular pattern, not by the label in the contract, and a regular pattern on its own does not make someone permanent. If you haven't kept proper records or pay slips, the Act puts the onus on you to disprove an underpayment claim in court (Fair Work Ombudsman, read 8 September 2026). Document the employment arrangement clearly from day one.

Most modern POS systems (like Square, Shopify, MYOB, or Vend) can export daily sales and staff logs. Export this data to your payroll/accounting system to reconcile recorded sales against payroll hours. This helps verify labour cost as a % of revenue and identifies discrepancies. For example, if recorded sales are high but logged staff hours are low, investigate whether all staff clocked in. Some payroll providers integrate directly with POS systems for real-time reconciliation. Talk to your payroll provider about integration options.