On this page
- Determine employee classification
- UPDATED JUNE 2022: Find the minimum hourly rate
- Junior wages
- Is the employee full time, part time or casual?
- Hours of work, minimum hours & casual loading
- Types of pay
- Market rates v. award rates
- Annualised salaries
- Building a package to attract the right person
- UPDATED JULY 2022: Flat pay rate calculator
- Rates for managers
- Rates for trainees
- UPDATED JUNE 2022: Superannuation
- UPDATED NOVEMBER 2021: Superannuation stapling
Tackling pay rates
This page pulls together the most requested information from the Employment & Reward section, but should not be viewed in isolation. A person working on your farm may be engaged as an employee, a family member, an independent contractor or a share farmer. How they are engaged will determine which laws apply to the working relationship, especially in regard to minimum entitlements in the National Employment Standards (NES) – download our tackling pay rates help sheet (updated from 1 July annually)
All award employees, should be given a classification which accurately reflects their skills and experience and the work allocated to the employee. As a minimum, wages or salary paid to the employee should meet award rates of pay which apply to the particular classification.
Find the right employee classification in the Pastoral Award 2020
There are 5 dairy employee classifications in the award – download the tackling pay rates help sheet (see pg 2) for information about each classification and job category.
Training level is an indication only
Find the minimum hourly rate for the employee classification.
The pay rates in the Pastoral Award 2020 apply to all national system employers across Australia, regardless of award coverage prior to 1 January 2010.
On 15 June 2022, the Fair Work Commission handed down the 2022/2023 Annual Wage Review decision. The decision announced a 5.2% increase to the minimum wage and a 4.6% increase to all other Award Rates classified in the Pastoral Award 2020.
The following table has the pay rates which apply from 1 July 2022 – 30 June 2023.
Weekly rate (100%)
Previous pay rates which applied from 1 July 2021 – 30 June 2022 are available here.
In WA? Pay rates depend on how you run your business – read WA state industrial laws & pay rates (updated – from 1 July 2021)
|Age of employee||% of relevant
|Under 16 years of age||50|
|16 years of age||60|
|17 years of age||70|
|18 years of age||80|
|19 years of age||90|
|20 years of age||100|
Employees may be engaged as permanent full-time employees, permanent part-time employees, casual employees or seasonal employees. It is important to understand the difference between these different categories as the various entitlements and responsibilities are different for each category.
Employees who work similar hours each week
Under the Pastoral Award 2020, ordinary hours are 152 hours worked over a four-week period, regardless of whether they fall on a weekend. Overtime is payable once the 152 hours have been worked.
Ordinary hours for casuals are the same as for full-time employees. This means that casual employees get paid overtime only when they have worked 152 hours in a consecutive period of 4 weeks.
Overtime for part time employees is calculated differently. Part time employees are entitled to overtime payment for all hours worked above the agreed part time hours.
There are minimum hours of work for all part-time and casual employees. For part-time employees, the award specifies that the employer must roster the employee for a minimum of 3 hours on any shift or 2 hours for full time secondary school students who are 18 years or under.
For casual employees, the award specifies that on each occasion the casual employee attends for work they are entitled to a minimum payment of 3 hours work or 2 hours for full time secondary school students who are 18 years or under. A casual employee must be paid at the hourly rate plus 25%.
For more information on minimum hours and overtime rates, visit the Pastoral Award section.
If you want to attract the right people you need to match market pay rates. The market rate is, more often than not, above the minimum rate of pay.
Whilst an employer must comply with the minimum rates of pay that are set by awards, federal laws and state laws in WA, the actual rate of pay (as opposed to the minimum) will depend on the responsibilities and duties which are outlined in the position description (see our recruitment section), the skill level and experience that the employee demonstrates in the job, and the current market rates being paid on other farms and in other industries for similar skills and abilities.
Consider conditions when comparing pay
When comparing market rates, it is important to compare similar conditions. For example, many dairy staff are employed on a casual basis, which means that in addition to their ordinary rate of pay they, are paid a casual loading of 25% so their rates can appear high compared with someone who is employed part time or full time.
Pay for ordinary hours
The Pastoral Award 2020 specifies ordinary hours as being 152 hours over a consecutive four-week period.
Under the federal industrial laws, the ordinary hours are 38 per week for full-time employees and less than 38 for part-time employees.
Ordinary hours of work is an important concept in remuneration, because it is often used to calculate the various leave entitlements and termination payments. Ordinary pay for your employee may be the minimum award rate or federal or state (WA) minimum wage or an agreed higher rate.
Unlike many other awards, the Pastoral Award 2020 does not provide for penalty rates for work on weekends or outside of standard working hours. Overtime payments involve an additional percentage of the ordinary rate of pay to compensate the employee for working in excess of ordinary hours. Work on Saturdays and Sundays is only paid at the overtime rate ONLY once 152 hours have been worked in a 4 week period.
Read our overtime and ordinary hours fact sheet which explains how overtime can apply over a 4 week period (inc example rosters).
Employers and employees can negotiate a workplace agreement or an Individual Flexibility Agreement (IFA) which allows for the payment of a flat rate of pay for all hours worked, regardless of the day of the week providing the employee is better off overall than they would have been if they had been paid the award rate of pay plus overtime.
Accumulating hours of overtime
Most farms have a seasonal variation in workload. It is difficult to provide consistent hours of work for employees every week of the year. Accumulating hours of overtime as a time in lieu is permitted by the Pastoral Award 2020, instead of paying them out. This can be valuable for some award employees at the quieter times of the year, to give them a long weekend or days off to pursue interests off farm.
However, the Time off In Lieu or TOIL provisions of the Pastoral Award 2020 were substantially varied as of the first pay period on or after 27 November 2017 – read about how TOIL now works
Pay for public holidays
Payment for working on public holidays is called a penalty rate. The Pastoral Award 2020 specifies payment of double time for all work on public holidays in the dairy industry.
Pay the correct rate on public holidays
Only one penalty applies at the one time. If a public holiday falls when an employee is on overtime – you pay the public holiday rate (200%) on the base rate, not the overtime rate.
Employers and employees can negotiate a workplace agreement or an Individual Flexibility Agreement (IFA) which allows for the payment of a flat rate of pay for all hours worked, regardless of the day of the week providing the employee is better off overall than they would have been if they had been paid the award rate of pay and the penalty rate.
Agreements to pay a flat rate could breach the award
Allowances are usually paid to employees to compensate them for suffering a particular hardship or disadvantage at work, such as very hot conditions, or for work-related expenditures, such as travel and accommodation. Other allowances are paid for particular skills or responsibilities (e.g. first-aid allowances). Awards set allowances and these are updated each year on 1 July.
Provision of wet weather clothing
The Pastoral Award 2020 has an allowance which requires the employer to provide wet weather clothing and footwear in certain circumstances. The clothing and footwear provided by the employer remains the property of the employer.
Once you have determined the relevant minimum amounts of remuneration required by law and any other benefits which you may be able to provide you can begin to work out a package.
In some circumstances it may be more straightforward to work out a package for full-time employees that includes a flat rate of pay taking into account overtime and penalty rates. As this is a variation to the award, the employer and employee must agree to the pay rate as part of an Individual Flexibility Agreement (IFA) or an enterprise agreement. IFAs and enterprise agreements must pass the Better Off Overall Test (BOOT) to ensure that the employee is better off overall compared with the award.
As of the first full pay period commencing on or after 1 March 2020, the Pastoral Award 2020 has been varied to enable employers and employees to agree in writing for the employee to be paid an annualised wage or a salary instead of being paid an hourly rate. This is similar to the IFA and may be useful for farmers provided they keep excellent time records.
Use the flat rate calculator (excel spreadsheet) to work out the hourly flat rate that takes into account overtime and penalty rates.
How to use the flat pay rate calculator…
- Enter the minimum hourly rate for the position, based on the classification.
- The number of ordinary hours is already entered. It is assumed to be 38 hours as specified in the Pastoral Award 2020.
- Enter the overtime hours.
- Enter any hours worked on Sundays that were after the employee had exceeded 152 hours within a 4-week period.
- Enter number of hours and days rostered to work on public holidays over 12 months.
- The average hourly rate will be calculated. This rate is the minimum that needs to be paid to pass the BOOT test.
Here is an example of a flat rate of pay ($27.01), calculated using the calculator, for an employee classified as an FLH5 (Senior farm hand) at a minimum hourly rate of $23.16 (as of July 1 2022).
Consider other benefits
Once you have determined the current market rate you can then add other benefits into the equation.
For instance, the face value of a wage for a dairy farm employee may not appear to be attractive compared with other industries. However, when the total package is measured you may be surprised at its value to the employee.
Business managers will be award free provided their duties and responsibilities are greater than the FLH8 classification in the Pastoral Award 2020. The National Employment Standards apply but overtime and penalty rates do not apply as these are award entitlements. If they are going to work more than 38 hours per week, the additional hours must be reasonable
Salaries for managers are often calculated on the basis of the herd size. However, this is a guide only as greater levels of responsibilities will command a higher salary. Use a salary calculator (excel spreadsheet) as a guide to work out the salary for a manager on your farm.
Although business managers are award free, the Federal employment contract manager – permanent template can be used to write their contract. In the contract template, change the reference to the ‘relevant award’ to the National Employment Standards.
Award responsibilities and entitlements apply regardless of the employee’s title
A trainee is an employee undertaking a traineeship under a training contract. A training contract means an agreement for a traineeship made between an employer and an employee which is registered with the relevant State or Territory training authority. The National Training Wage Schedule contained in Schedule E of the Miscellaneous Award 2020 provides for wages for trainees.
The Fair Work Ombusdman’s Pay and Conditions Tool allows you to work out pay rates, including trainees.
All employers must pay superannuation for all employees, apart from the following exceptions:
- employees under 18 years of age and working less than 30 hours per week; or
- employees paid to do work of a domestic or private nature for not more than 30 hours a week, for example, a part-time nanny or housekeeper.
The superannuation guarantee legislation requires employers to provide superannuation contributions for employees as a percentage of their ‘ordinary time earnings’.
Note: Superannuation is only paid on ordinary time earnings. The taxation laws make a distinction between ordinary hours and overtime hours and superannuation is not payable on overtime if it can be ‘separately identified’ from ordinary hours.
Please note: check your accounting software is updating to 10.5%.
What are ordinary time earnings?
Ordinary time earnings are specifically defined in the superannuation guarantee legislation. For example, overtime, accrued annual leave, long service leave and sick leave paid as a lump sum on termination are not defined as ordinary time earnings and therefore no superannuation contribution needs to be made when paying out these amounts. Read the full list of ordinary time earnings
Individual Flexibility Agreements and overtime
If you pay a flat rate of pay and have an Individual Flexibility Agreement in place, you do not have to pay superannuation on the overtime component provided the Individual Flexibility Agreement has clear words identifying the overtime component. This IFA template has the appropriate clause.
However, If you are paying a flat rate of pay and NOT formalising this by using an IFA whereby the overtime hours are rolled up in the calculation of the flat rate of pay, then the overtime hours are not considered by the ATO to be ‘separately identifiable’. This means that you have to pay superannuation on all hours worked.
In the 2014-15 Federal Budget, the government announced changes to the schedule for increasing the super guarantee (SG) rate to 12%.
Theses amendments to the legislation mean the rate – currently 10% – increases by 0.5 percentage points each year until it reaches 12% (see table: source ATO)
|Date||Super rate guarantee|
|1 July 2002 – 30 June 2013||9%|
|1 July 2013 – 30 June 2014||9.25%|
|1 July 2014 – 30 June 2021||9.5%|
|1 July 2021 – 30 June 2022||10%|
|1 July 2022 – 30 June 2023||10.5%|
|1 July 2023 – 30 June 2024||11%|
|1 July 2024 – 30 June 2025||11.5%|
|1 July 2025 – 30 June 2026 and onwards||12.5%|
The upper age limit of 70 years for superannuation guarantee was removed in July 2013, which means that superannuation guarantee must be paid for workers over 70 years of age, providing the other exemptions listed above do not apply.
As of 1 July 2022 the $450.00 threshold per calendar month limit has been removed. This means that superannuation is payable on all income except for employees who are under 18 years of age and working less than 30 hours in a week.
This amount must be paid to the superannuation provider at least every quarter and a record kept of all contributions made.
Superannuation payments must be made to a complying superannuation fund or Retirement Savings Account (RSA). Employees now have the right to choose which superannuation fund or RSA will receive their superannuation guarantee contributions. It is a good idea to have a complying ‘default’ fund chosen for workers who don’t have a preference for the lodgement of their contributions.
The Pastoral Award 2020 provides a list of complying ‘default’ funds in clause 19.4 (see pg 25 & 26 Pastoral Award 2020) for workers who don’t have a preference for the lodgement of their