The hospitality industry was one of the industries affected by the latest Award rate increases in October 2022.
This means that many employers in the hospitality industry need to ensure that employees are paid the correct amount.
This guide will explain all you need to know about hospitality Award rates.
The Australian government announced a national minimum wage increase in October 2022, from $20.33 per hour to $21.38 per hour.
The Fair Work Commission (FWC) also announced that the Awards minimum pay rates will increase by 4.6 percent from the first pay period on or after the 1st of October 2022.
Awards are legal documents that set minimum pay rates and employment conditions in various industries covering millions of Australian workers.
While some Awards increased on 1 July 2022, others faced a slight delay and increased on 1 October 2022. The hospitality industry was one of the industries that experienced the delayed increase.
So what does this mean for business owners in the hospitality industry?
The Hospitality Award includes employers in the hospitality sector and their staff members who fall under the Award's categories.
This includes:
The Hospitality Award doesn't cover employers and employees if they come under one of the following Awards:
Examples of job titles that would usually fall under the Hospitality Award:
Visit the FWC website to find out whether your staff fall under the Hospitality Award.
Hospitality Award minimum wages have increased by either 4.6% or $40. Employees receive the higher amount of the two. This means either that the lowest hourly rate for an introductory employee covered under the Hospitality Award is $21.38, or the threshold at which employees receive the 4.6% (instead of $40) is $869.60 per week.
Example
A casino gaming attendant earned a weekly wage of $850 before 1 October 2022.
The employee has now received a $40 increase in their wages as $850 is less than $869.90. They benefit more from the $40 extra than the 4.6% of $850 which would have only given them a $39.10 increase in their wage.
Alternatively, if a different casino gaming attendant at an alternative casino earned $880 weekly. Since they earn more than the $869.90 per week threshold they’ll receive a 4.6% increase in the first pay period after 1 October 2022.
However, there are different rules depending on whether the employee is a full-time, part-time, casual employee or an apprentice.
Employers and employees can find out how much each job category within the hospitality industry should be paid by using the FWC’s pay calculator.
Alternatively, the FWC also published a pay guide indicating new pay rates across different job levels and categories.
The increase in 2022 Awards minimum wage also impacts other payments made to workers covered by the Hospitality Award, such as superannuation payments and penalty rates.
When a hospitality sector employee works after hours, on the weekend, or on a holiday, they are subject to penalty rates.
These are higher pay rates than usual such as time and a half. The exact rules regarding pay rates are set out in the Hospitality Award which employers must comply with.
Superannuation
In addition to the increase in Award rates changes have been made to superannuation eligibility and how much employers are required to contribute. Superannuation payments refer to an employer’s contributions to an employee's retirement account. This represents a portion of an employee's salary.
Since 1 July 2022, all companies are required to pay employees' benefits regardless of their compensation.
The $450 monthly eligibility requirement for super guarantee (SG) benefits was removed by the government. The SG rate was also increased by the government, going from 10.5% to 11.5%. The SG rate is required to increase to 12% by 2025, allowing Australian residents for tax purposes working in the hospitality industry to save more money for their retirement.
For business owners in the hospitality industry, keeping track of payroll changes can be difficult.
Business owners must stay informed of updates to maintain their legal compliance every year.
However, business owners do not have to spend time continuously recalculating payroll to remain compliant and ensure employees get their fair pay.
Thanks to QuickBooks cloud payroll software, the system handles everything automatically, ensuring businesses stay up to date with compliance with the Australian Tax Office (ATO).
QuickBooks Payroll software does all the heavy lifting for business owners, ensuring employees get paid fairly on time every time, even calculating penalty rates and superannuation payments.
Take a look at the payroll price plans from QuickBooks or try our service for a free 30-day trial to find out how Payroll can take care of the maths and remove the payroll burden for business owners.
Sign up for our quarterly newsletter and receive educational and interesting content straight to your inbox.
Want more? Visit our tools and templates!
