Salary payments

Annual Wage Review – 1 September 2021 changes

From 1 September 2021, minimum wages in the Retail Award are increasing. Updated minimum rates are now available in our pay tools. See our Annual Wage Review 2021 page for more information.

Find out about annual salaries and how they can be arranged.

Annual salary requirements

An annual salary can't be less than the minimum entitlements an employee is entitled to under the award or registered agreement that applies and the National Employment Standards.

The requirements that need to be met when agreeing to an annualised salary can be outlined in an award, employment contract, enterprise agreement or other registered agreement.

An employer and employee can agree that an annual salary covers entitlements like:

  • minimum weekly wages
  • penalties
  • overtime
  • allowances
  • annual leave loading.

Find out the rules in your award about making an annual salary agreement by selecting from the list below.

Hospitality Award

Based on what you've told us, it looks like you're covered by the Hospitality Industry (General) Award [MA000009].

Full-time and part-time employees can agree to be paid an annual salary instead of a weekly or hourly.

Minimum annual salary payment

An annual salary has to be at least 25% above the minimum weekly wage an employee would have been paid, over:

  • a year, or
  • a shorter period, if the employment ends before a year.

This is to make sure that an employee getting an annual salary isn't disadvantaged.

The salary paid over a year has to be sufficient to cover what the employee would have earned if they'd been paid:

  • the minimum weekly wage
  • all the included award payments, including overtime and penalty rates.

Review of annual salary

Employer's have to review an employee’s annual salary after each year. If the employee leaves work before completing a year, the salary has to be reviewed for the period of the year that was worked.

The review is to make sure that the employee is being paid the correct amount to cover all their award entitlements.

Employers have to keep a record of the hours the employee worked every week for the review. This needs to be signed by the employee.

If the annual salary paid was not enough to cover the minimum award entitlements the employer has to pay the employee the difference.

Salary arrangements for managers

Managers in hotels can be paid a salary that is at least 25% above the minimum annual salary in this award. These employees don’t get the benefit of award entitlements relating to:

  • part-time employment
  • allowances
  • ordinary hours of work (full-time and part-time employees)
  • breaks
  • penalty rates
  • overtime
  • payment for annual leave loading
  • additional arrangements for full-time employees (on public holidays)
  • provision of employee accommodation and meals.

Check the Hospitality Award for all entitlements for employees who are paid a salary. 

To find out more about who this award applies to, go to the Hospitality Award summary.

Source reference: Hospitality Industry (General) Award [MA000009] clause 25 external-icon.png

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Best practice tip

Check your employment contract for details of any annual salary arrangements.

Records of annual salary arrangements

Salary agreements should be documented in writing, and identify which entitlements are included in the payment.

The employer and the employee should keep a copy of the agreement.

Tools and resources

Related information

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