With effect from 20 November 2020, most Modern Awards will change regarding how casuals are paid overtime. Please note: The Aged Care Award will change on 1 March 2021.
There are three ways to calculate overtime and it will depend on the Award. Please ensure you check your relevant Award(s) to ensure compliance with the changes:
Ordinary time (base rate) is calculated at 100%, casual loading at 25% and overtime is calculated at 150%.
The Cumulative Method
Overtime and the casual loading are applied to the ordinary time base rate.
For example: base rate x overtime penalty and casual loading – 100% x 175%
The Substitution Method
Overtime is calculated on the base rate and excludes the casual loading.
For example: base rate x overtime penalty – 100% x 150%
The Compounding Method
Overtime is calculated on the casual loaded rate of pay.
For example: casual loaded rate x overtime penalty – 125% x 150%
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