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‹ HR Glossary

Modern award

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.

Put a number on it
Award Wage Increase Calculator · free
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Related terms

National Employment Standards (NES)Penalty ratesNational minimum wageEnterprise agreementAll terms ›
Where Compono fits

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

See how it works

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.

General guidance, not legal advice. Entitlements depend on the applicable award, agreement and jurisdiction. Rules and figures current as at July 2026 and reviewed annually.