Quick Summary
Quick Summary
- The General Retail Industry Award (MA000004) requires penalty rates for Saturday (125%), Sunday (150%), and public holiday (225%) work for permanent staff.
- The 2026 Annual Wage Review increased all Retail Award rates by 4.75% from 1 July 2026, pushing the Level 1 base rate to $27.81 per hour.
- Casual employees receive higher penalty rates (150% Saturday, 175% Sunday, 250% public holidays) because the 25% casual loading stacks on top of penalties.
- Employers who have not updated payroll systems since 1 July 2026 are underpaying staff and owe back-pay.
- Underpayment breaches can trigger Fair Work Ombudsman penalties of up to $93,900 per breach for companies.
Australian retail employers covered by the General Retail Industry Award (MA000004) must pay weekend penalty rates on top of ordinary hourly rates. From 1 July 2026, the Fair Work Commission’s 4.75% Annual Wage Review increase pushed the Retail Award Level 1 base rate to $27.81 per hour. Saturday work attracts 125% for full-time and part-time employees (150% for casuals), while Sunday work attracts 150% for permanent staff (175% for casuals). Public holidays carry a 225% loading for permanent staff and 250% for casuals. Employers who fail to apply these rates face back-pay claims, Fair Work Ombudsman penalties, and civil penalties under the Fair Work Act 2009.
What Are the Current Retail Award Penalty Rates for 2026?
The General Retail Industry Award 2020 (MA000004) sets penalty rates for work outside ordinary hours (38 hours/week, generally 7:00am–7:00pm Monday to Saturday). Here is the current structure from 1 July 2026 for a Retail Employee Level 1 (base rate $27.81/hr):
| Day / Time | Full-Time / Part-Time | Casual (incl. 25% loading) |
|---|---|---|
| Saturday | 125% — $34.76/hr | 150% — $41.72/hr |
| Sunday | 150% — $41.72/hr | 175% — $48.67/hr |
| Public Holiday | 225% — $62.57/hr | 250% — $69.53/hr |
| Evening (after 6pm Mon–Fri) | 125% — $34.76/hr | 150% — $41.72/hr |
Rates for higher classification levels scale upward from the Level 1 base. Employers must identify the correct classification for each employee based on duties and experience.
How the 2026 Annual Wage Review Changed Retail Pay Rates
The Fair Work Commission’s Annual Wage Review decision increased all modern award minimum wages by 4.75% from 1 July 2026, affecting approximately 21.1% of the Australian workforce. For retail employers, every base rate under MA000004 increased on 1 July 2026. If your payroll system has not been updated, you are underpaying staff — including for weekend penalty calculations, which are multiples of the base rate.
Employers running annualised salary arrangements must also reassess whether the salary still covers all penalty entitlements under the updated rates.
Saturday Penalty Rates Under the Retail Award
Full-time and part-time employees receive 125% of their base hourly rate for Saturday work. For a Level 1 employee, that is $34.76 per hour. Casual employees receive 150% — this includes the 25% casual loading on top of the 125% Saturday penalty. Employers engaged in retail and franchise operations should verify that their payroll systems apply the correct rate based on employment type.
⚠️ 4.75% Wage Increase Now Applies
All Retail Award pay rates increased by 4.75% from 1 July 2026. If your payroll has not been updated, you are underpaying staff. Update now and back-pay any shortfall.
Key Takeaways
Key Takeaways for Employers
- ✓Saturday penalty: 125% (permanent) / 150% (casual) — Level 1 rate $34.76 / $41.72 per hour.
- ✓Sunday penalty: 150% (permanent) / 175% (casual) — Level 1 rate $41.72 / $48.67 per hour.
- ✓Public holiday penalty: 225% (permanent) / 250% (casual) — Level 1 rate $62.57 / $69.53 per hour.
- ✓The 4.75% wage increase from 1 July 2026 compounds with all penalty loadings — update payroll immediately.
- ✓Annualised salary arrangements must be reconciled annually against award entitlements.
- ✓Records must be kept for 7 years under section 535 of the Fair Work Act 2009.
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Sunday Penalty Rates Under the Retail Award
Sunday penalty rates are 150% for full-time and part-time employees and 175% for casuals. For a Level 1 employee, that means $41.72 per hour (permanent) or $48.67 per hour (casual). These rates reflect the Fair Work Commission’s prior reduction of Sunday penalties from 200% to 150% for permanent retail employees.
Public Holiday and Evening Penalty Rates
Public holidays carry the highest loadings: 225% for permanent staff and 250% for casuals. A Level 1 employee working a public holiday earns $62.57/hr (permanent) or $69.53/hr (casual). Evening work after 6:00pm Monday to Friday attracts 125% for permanent staff and 150% for casuals.
Casual vs Full-Time Penalty Rate Differences
The 25% casual loading is applied on top of the penalty rate, not instead of it. On a Saturday, a permanent employee gets 125%; a casual gets 125% plus 25% loading, resulting in 150%. This stacking means casual weekend rates are always 25 percentage points higher than the equivalent permanent rate. Employers must correctly classify employees at engagement — misclassifying a regular part-time employee as casual can trigger claims for unpaid leave. For guidance on proper arrangements, see our payroll compliance resources.
Employer Compliance Obligations Under the Retail Award
Retail employers must meet several obligations under the Retail Award and the Fair Work Act 2009:
- Pay correct rates: Apply the 4.75% increase from 1 July 2026 and calculate penalties accurately for each employment type.
- Issue compliant pay slips: Show ordinary and penalty rate hours separately, the applicable rate, and all deductions.
- Keep records for 7 years: Under section 535 of the Fair Work Act, records must be retained for 7 years. Failure shifts the burden of proof to the employer.
- Update rostering software: Ensure your payroll platform reflects post-1 July 2026 rates and penalty percentages.
For document templates, access our free employment documents including pay slip templates and employment agreements.
Common Payroll Mistakes Retail Employers Make
1. Not applying the 1 July increase. The 4.75% increase took effect from the first full pay period on or after 1 July 2026. Any delay means back-pay is owed.
2. Incorrectly applying casual loading. Some payroll systems apply the 25% casual loading instead of the penalty rate, rather than in addition to it. The loading stacks on top of penalties — it does not replace them.
3. Absorbing penalties into an annualised salary without reconciliation. Employers must reconcile annually to ensure the salary covers all entitlements. Our modern awards compliance guide covers this in detail.
Underpayment can result in civil penalties of up to $93,900 per breach for companies, plus back-pay. For specific guidance, call 1300 161 828 or visit our membership plans page to speak with an employment lawyer.
Frequently Asked Questions
Under MA000004, Saturday penalty rates from 1 July 2026 are 125% for full-time and part-time employees, and 150% for casuals (including 25% casual loading). For a Retail Employee Level 1 at the current base rate of $27.81 per hour, that means $34.76 per hour for permanent staff and $41.72 per hour for casuals. Higher classification levels receive proportionally higher amounts.
Sunday penalty rates under MA000004 are 150% for full-time and part-time employees and 175% for casuals from 1 July 2026. For a Level 1 employee, this equates to $41.72 per hour for permanent staff and $48.67 per hour for casuals. These rates reflect the Fair Work Commission’s reduction of Sunday penalties from 200% to 150% for permanent retail employees, combined with the 4.75% wage increase.
The 25% casual loading is applied on top of the penalty rate, not instead of it. A casual working Saturday gets 125% (Saturday penalty) plus 25% loading, resulting in 150% of the base rate. On Sundays, casuals receive 175%. On public holidays, casuals receive 250%. The loading compensates casuals for not receiving paid leave entitlements.
The 2026 Annual Wage Review increase of 4.75% took effect from the first full pay period on or after 1 July 2026. All modern award minimum wages, including Retail Award rates, increased by 4.75%. Employers who have not updated payroll must do so immediately and back-pay any shortfall for shifts worked since 1 July 2026.
Overtime under the Retail Award applies when an employee works more than 38 ordinary hours per week or more than 9 hours in a day. Overtime is paid at 150% for the first two hours and 200% thereafter. If an employee works overtime on a weekend, the higher of the penalty or overtime rate applies — they do not stack.
Yes, but the arrangement must be documented in writing and the employer must reconcile annually to confirm the salary covers all award entitlements including weekend penalties, overtime, and evening loadings. If the salary falls short, back-pay is owed. Employers should seek professional advice before implementing these arrangements.
Underpaying penalty rates is a breach of the Fair Work Act 2009 and the applicable modern award. Consequences include back-pay liability, Fair Work Ombudsman investigation, and civil penalties of up to $93,900 per breach for companies. Employers who identify underpayment should rectify it promptly and seek legal advice, as voluntary rectification can mitigate penalties.
Yes. Part-time employees under the Retail Award receive the same penalty percentages as full-time employees — 125% on Saturdays, 150% on Sundays, and 225% on public holidays. Casuals receive higher percentages because the 25% casual loading is added on top of the penalty rate.
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