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HR Glossary

Modern award

Australia · Fair Work and entitlements
What is a modern award?

A modern award is a legal document that sets minimum pay rates and employment conditions for an industry or occupation in Australia, sitting on top of the National Employment Standards. More than 100 modern awards cover most Australian employees.

Modern awards at a glance

Number of modern awardsMore than 100, by industry and occupation
What they setMinimum pay, loadings, penalties, allowances, hours, breaks
Who reviews themThe Fair Work Commission, with wage changes each 1 July
2026 annual wage reviewAward minimums up 4.75% from 1 July 2026
Relationship to the NESAwards add to the NES floor; neither can be undercut

What does a modern award cover?

An award sets the enforceable minimums for the work it covers: base pay rates by classification level, casual loading, penalty rates and overtime, allowances, hours and rostering rules, breaks, and consultation obligations. Employers can always pay above the award; they can never pay below it, and an employment contract cannot override it.

How do you know which award applies?

Coverage runs by industry or occupation, not by the employer's preference. The two questions that decide it are what the business does and what the employee does, and it is common for one employer to have staff across several awards. Getting the award right, and the classification level within it, is the single most common failure point behind underpayments.

How do award rates change?

The Fair Work Commission (FWC) reviews minimum award wages every year, with changes taking effect from 1 July. The 2026 review lifted award minimum wages by 4.75%. Awards themselves are also varied from time to time, which is why an annualised salary that comfortably covered the award three years ago may not cover it today.

Next step

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Award Wage Increase Calculator

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National Employment Standards (NES)

The National Employment Standards (NES) are the minimum employment entitlements in the Fair Work Act that apply to all national system employees in Australia, covering hours, leave, notice, redundancy and superannuation.

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Penalty rates

Penalty rates are higher rates of pay that Australian modern awards and enterprise agreements require for work at unsociable times: evenings, weekends, public holidays and overtime.

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National minimum wage

The national minimum wage is the legal pay floor for Australian employees who are not covered by a modern award or enterprise agreement.

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Enterprise agreement

An enterprise agreement is a collective agreement on pay and conditions made between an employer (or several) and its employees, usually negotiated with unions, approved by Australia's Fair Work Commission and enforceable in place of the modern award for up to four years.

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All terms

Every definition, with the local rules, rates and thresholds attached.

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Where
Compono fits.

Compono is a talent intelligence platform: an applicant tracking system and an employee engagement platform built on the same people data.

Award changes hit your whole cost base at once. See them coming.

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saved by VicRoads over two years

Common questions

Can an employee be award-free?

Yes. Many managers and professionals fall outside all award coverage, in which case the NES and the national minimum wage are the floor. Award-free is a coverage question, not a choice the employer makes.

Does paying a salary remove award obligations?

No. A salary can absorb award entitlements only if it genuinely covers them across the pattern of hours actually worked, and some awards require formal annualised wage arrangements with reconciliation. The award keeps applying underneath the salary.

This page is general information, not legal advice. We check figures annually and update them on a best-efforts basis, but employment rules change and we cannot promise everything here is current or complete. Before you act on it, confirm the detail with the Fair Work Ombudsman (fairwork.gov.au) or your own adviser. Last reviewed July 2026.