Understanding Modern Awards 2026 changes for Construction Businesses

Construction payroll carries some of the most layered award rules going - under the Building and Construction General On-site Award (MA000020), a Saturday shift is paid at 150% for the first two hours and 200% after (175%/225% for casuals), Sunday sits at 200% (225% casual), and public holidays reach 250% (275% casual). On top of that, ordinary hours are averaged over a 20-day, four-week cycle so employees can accrue rostered days off (RDOs) - 0.4 of an hour banked for every day worked, building toward a full RDO roughly every 19 days. Add tool, travel/fares, site, height/multi-storey and leading hand allowances, and there's a lot to keep aligned.

Why this matters more in 2026

Modern award minimum wages rose 4.75% from the first full pay period after 1 July 2026, and the official pay guide for MA000020 was updated to match. What trips construction payroll up specifically is that expense-related allowances are reviewed on their own schedule rather than moving in lockstep with the base rate - so a rate table updated for 1 July doesn't necessarily mean every allowance was checked at the same time.

There's also more at stake in getting it wrong. Wage theft became a criminal offence in Australia from 1 January 2025 - intentional underpayment can carry fines up to $8.25 million for companies and up to $1.65 million plus 10 years' imprisonment for individuals (Fair Work Ombudsman). A genuine miscalculation isn't criminal wage theft - that law only applies to intentional conduct - but it still means back pay, interest, and civil penalties, and construction's subcontracting chains and casual-heavy workforce make it a sector the FWO watches closely.

Common places errors creep in

• RDO accrual (0.4 hours/day) tracked incorrectly, leading to under- or over-paid rostered days off, especially at termination
• Saturday rate not stepping up from 150% to 200% (175%→225% casual) after the first two hours worked
• Tool, travel or site allowances left at last year's flat amount because they index separately from the base rate
• Casual loading not compounding correctly into weekend or public holiday rates

A quick check worth running

1. Compare your penalty rate and allowance settings against the MA000020 award summary or the Pay and Conditions Tool.
2. Run a test pay covering a Saturday shift past the two-hour threshold and confirm the rate steps up correctly.
3. Check that RDO accrual balances match 0.4 hours per day worked, and that current allowance amounts reflect the latest review.

Removing the manual step

Construction's mix of RDOs, penalty rates and stacked allowances isn't the kind of thing that stays accurate on autopilot. QuickBooks Payroll Advanced's pay conditions engine tracks RDO accrual and applies allowances and penalty rates automatically.

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