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5 Calculations to Make BEFORE Wage Rates Change

Here are 5 calculations you may not have thought of. 

Employers will need to act quickly as the minimum wage increase will come into effect on 1 July 2018. 

Individual Flexibility Agreements

If you have implemented Individual Flexibility Agreements, you will need to reassess those agreements to ensure employees remain "better off overall" when compared to the newly increased Modern Award rates.

Annualised Salary Arrangements

Employers who use annualised salary arrangements will need to conduct an audit of those annualised salaries against the new Award rates and working patterns to ensure the annual salary compensates for award entitlements.

Enterprise Agreements

The new Modern Award rates will also form the baseline for "better off overall" testing new Enterprise Agreements (EA). If you have an EA in place, you will need to ensure the minimum base rates in the EA remain at a minimum equal to the new Modern Award rates. If not, EA rates will need to be increased to match the Modern Award.


The pay rate decision will impact some allowances as well as base rates. A number of Modern Award allowances are expressed as a percentage of the "standard rate", which is linked to the wage rate of a specific classification in the award. These allowances will therefore increase in line with the increase in the standard rate.

High Income Guarantee

Although not directly related to today's decision, the High Income Threshold will also increase from 1 July 2018. Any employers who sidestep Award conditions by using High Income Guarantees will need to check their agreed terms, to ensure they remain compliant and above the new threshold. If guarantee levels fall below the threshold, or lapse for another reason, minimum entitlements will revert to those in the Award (including, for example, overtime and penalty rates). 

Time is running out - call us today on 0406 146 116

HR Tactics can help you understand how this decision affects your business, including explaining how it works, auditing and calculating pay rates and assisting you implement an appropriate strategy to ensure compliance.

So if you would like assistance with any of these matters, call HR Tactics on 0406 146 116.