Changes to the Real Estate Award
If you’re covered by the Real Estate Award there have been some recent changes that may affect you.
The Fair Work Commission recently introduced a number of changes that affect wages and employment classifications, commission only employment eligibility, minimum commission only rates and more.
These changes apply from the first full pay period on or after 2 April 2018.
What do you need to do?
Use our updated Pay Calculator or download the updated Pay Guide to get the new pay rates.
You can check out the Real Estate Industry Award 2010 [MA000106] which has been updated to include the changes.
Read the updated information on our website by selecting the Real Estate industry filter on these pages:
We've also updated our summary of the Real Estate Award to reflect the coverage changes made to the award.
What are the changes?
Learn more about the changes to:
Classifications and weekly wages
There have been a number of changes to award classifications and wage rates. In particular, the introduction of:
- a new Real Estate Employee Level 1 (Associate Level) classification which covers employees previously classified as property sales, management and strata/community title management associates. Their weekly wage is:
- for first 12 months: $728.20
- after first 12 months: $768.60.
- a new Real Estate Employee Level 2 (Representative Level) classification which covers employees previously classified as property sales, management and strata/community title management representatives. Their weekly wage is $809.10.
- a new Real Estate Employee Level 3 (Supervisory Level) classification which covers employees previously classified as property sales, management and strata/community title management supervisors. Their weekly wage is $890.60.
- a new Real Estate Employee Level 4 (In-charge Level) classification which can include licensees in charge and agency managers. Their weekly wage is $930.50.
Remember minimum wages are reviewed and can change from 1 July every year, so it’s important to come back to our website and check these rates.
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Commission only employment
There have been a number of changes to minimum employment conditions for commission only employees. To be eligible for commission only employment employees:
- need to be a Real Estate Employee Level 2 or above
- need to have worked in property sales or commercial, industrial or retail leasing as a Real Estate Employee Level 2 or as a licensed real estate agent for at least 12 consecutive months over the previous 3 years
- who are engaged on this basis after 2 April 2018, need to meet the new minimum income threshold amount rules.
- who are already engaged on this basis before 2 April 2018, can continue their commission only arrangement as long as their arrangement is reviewed each year and meets the new minimum income threshold amount rules.
The award changes also introduce a new minimum commission only rate of 31.5% of an employer’s gross commission. This replaces the previous rate of 35% of an employer’s net commission.
Commission only arrangements need to be reviewed every 12 months and need to meet the new minimum income threshold amount rules. In particular, employees engaged on a commission only basis:
- before 2 April 2018 – need to have their arrangement reviewed by 2 April 2019
- on or after 2 April 2018 – need to have their arrangement reviewed no later than 12 months after the arrangement started.
Arrangements that don’t meet the minimum income threshold amount rules have no legal effect and can’t be enforced.
If an arrangement fails this review, the 3 year qualifying period used to assess an employee’s eligibility for a new commission only arrangement starts no earlier than the date their previous arrangement ended.
New minimum income threshold amount rules
The award now says that employees engaged on a commission only basis must, in any single 12 month period over the past 3 years, have been paid an annual amount (including commission or bonus payments) that is at least equal to:
- the minimum annual rate for their classification under the award
- an extra 25%.
This amount doesn’t include superannuation payments.
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Payments on termination of employment
Employees may be entitled to payment of a portion of any commission, incentive payments or bonuses under their written agreement when their employment ends, depending on how their employment ends. Employees are entitled to a portion of these payments:
- where employment ends because of their serious misconduct, if there was an enforceable property sale or lease contract in place before the date the employment ends
- where employment ends for any other reason, if there was an enforceable property sale or lease contract in place before the end of the exclusive agency period.
Exclusive agency period means the period that an employer has an exclusive right to sell or lease a property.
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Annual leave for commission only employees
Commission only employees are still excluded from getting paid annual leave loading under the award.
However, the award has been changed to confirm that annual leave needs to be paid at the employee’s base pay rate for their classification at the time of taking leave.
The award also now allows for an annual leave payment to be accumulated as a debit on an employee’s account if their agreement contains a commission only rate that is higher than the new award minimum commission only rate of 31.5% of an employer’s gross commission.
Where this happens, an employer can only offset the difference in commission only rates against the employee’s account.
Example: Annual leave payment as a debit
Dominic is a real estate agent and has an agreement with a commission only rate of 35%. This is 3.5% higher than the minimum entitlement.
Dominic takes 2 weeks of annual leave which is equal to a gross payment of $2000.
Dominic's employer has received $100 000 in gross commissions for the sales Dominic has been responsible for. The extra percentage he receives for his commission only rate means he's been paid $3500 more.
The annual leave payment can be treated as a debit because it's less than the extra commission he's received.
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Interested in other changes?
There are a number of other changes introduced into the Real Estate Award by the Fair Work Commission. Read the Fair Work Commission’s determination varying the Real Estate Award
for more information.
You can also have a read of the Fair Work Commission’s related decisions: