Employee covered by an award

An employee's base rate of pay (base rate) in an enterprise agreement can't be less than the base rate in an award that would otherwise cover an employee.

If the agreement base rate is less than the relevant award base rate, the agreement has effect in relation to an employee as if the agreement rate was the same as the award rate.

When an employee's base rate is taken from an award all other terms in the agreement continue to apply.

Example

Wardell is a full-time employee working for an aged care facility as a personal care worker. He holds a Certificate III and is required to use the skills of his qualification in his role.

Wardell is covered by an enterprise agreement. The base rate for a Certificate III qualified care worker in his enterprise agreement is $32.

Wardell looks at the Aged Care Award and finds that the base rate for a qualified personal care worker increased from 1 July 2025. He uses the Pay Calculator to check what the base rate of pay for a qualified personal care worker is and finds that it's $33.27 per hour.

This means that from 1 July 2025, the base rate in Wardell's enterprise agreement is lower than the relevant base rate in the award.

Wardell is entitled to the higher base rate in the award from the first full pay period on or after 1 July 2025.

Employee not covered by an award

If an employee is not covered by an award, the relevant comparison rate is the base rate set by the national minimum wage order.

All other terms in the agreement continue to apply.

What's included in the base rate

The base rate is the rate payable to an employee for their ordinary hours of work. It doesn't include:

• incentive-based payments and bonuses
• loadings
• monetary allowances
• overtime or penalty rates
• any other separately identifiable amounts.

This means the base rate doesn't include casual loading.

It's important to check the terms of each agreement, as some agreements include a definition of what's included in the base rate.

Identifying the base rate in an agreement

Sometimes it's not clear what the base rate in an agreement is. For example, some agreements include higher loaded rates of pay that are paid to employees for all hours worked. The loaded rate may include penalties, loadings and allowances.

If the agreement provides a loaded rate and the base rate can't be separately identified, then the loaded rate will be used as the base rate for comparison.

The FWC's Online Learning Portal has more information about enterprise agreements and employee pay and entitlements.

Increases to base rates in an agreement

Base rates in an agreement will only increase if there are increases provided in the agreement.

If the agreement base rate falls below the relevant award or national minimum wage order base rate, the award or order rate will replace the agreement rate.

The Annual Wage Review doesn't automatically apply to agreements.