Piece rates & commission payments

Some employees can be paid piece rates or commission payments.

Employees paid piece rates and commission payments are paid by results instead of getting an hourly or weekly pay rate. This means the amount the employee earns each week will vary depending on how much work they do.

When paid piece rates or commission payments, an employee has to get at least:

  • the minimum pay rate (if there is one) set out in an award or registered agreement
  • the national minimum wage (where no award or registered agreement applies).

Piece rates

A piece rate is where an employee gets paid by the piece. This means the employee gets a pay rate for the number of things they make or the number of tasks they complete.

When piece rates are paid, they apply instead of the hourly or weekly pay rate. An employee can be hired to work a mix of piece rates and hourly rate shifts.

When can an employee be paid piece rates?

An employee can be paid piece rates when:

  • an award or registered agreement allows for piece rate payments
  • the employee isn’t covered by an award or registered agreement and they get a pay rate based on how much work they do.

There has to be a written and signed piecework agreement setting out the pay rate per piece and how it is measured. An employer has to keep the agreement as part of their records and give a copy to the employee.

If there is no signed piecework agreement, the employee is not considered a pieceworker and must get the minimum hourly or weekly rate in the award for the type of work they do.

If the agreement is varied, it must be agreed to in writing by the employee and employer.

Commission payments

A commission payment is an amount paid to an employee based on how much they sell.

Normally, the commission payment is calculated as a fee or percentage of the employee’s total sales. A commission payment can be called a ‘bonus’ or ‘incentive payment’.

A commission payment can:

  • be paid as an extra incentive on top of an employee’s pay or
  • make up an employee’s whole wage (commission only payments).

When can an employee be paid commission as an incentive?

An employee can be paid commission as an incentive at any time.

An award or registered agreement can set out rules about how this can be done.

When can an employee be paid commission only?

An employee can be paid on a commission only basis when:

  • an award or registered agreement states an employee can be paid this way or
  • the employee isn’t covered by an award or registered agreement and there is an arrangement to be paid this way.

An award or registered agreement can set out specific rules about how this can be done.

Find information about piecework arrangements and commission payments in your award by selecting from the list below.

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