Salary

A salary is a fixed amount of money that an employee receives on a regular basis, usually monthly or fortnightly, which adds up to a specified total over the year. Unlike hourly wages, a salary is not directly tied to the number of hours worked, providing a consistent income regardless of work hours. This arrangement is often used for full-time positions and is agreed upon in the employment contract.

Paying a salary under an award

If an award-covered employee is paid a salary, the salary must be enough to cover everything they would have earned under the award for the hours they actually work, including overtime, penalty rates and allowances. Many awards have an annualised wage clause that requires you to set out in writing which entitlements the salary covers, keep records of the hours worked, and check the salary against the award at least every 12 months. For example, a salaried chef who regularly works 50 hours a week may need a higher salary to cover award overtime.

Read our guide to employment contracts, or book an HR compliance audit.