What is a modern award?
A modern award is a legal document that sets out minimum pay rates and conditions of employment for employees in a particular industry or occupation. The Fair Work Commission makes and maintains modern awards, and they operate on top of the National Employment Standards (NES). An award cannot offer less than the NES, but it can, and frequently does, offer more.
Awards apply automatically: if your industry or occupation is covered, the award applies to you whether your employment contract mentions it or not. There are currently over 100 modern awards covering most industries in Australia.
Think of them as layers. The NES is the federal floor. Your modern award sits on top and may add conditions. An enterprise agreement negotiated at your specific workplace can sit on top of the award, but must pass the “better off overall test” so you cannot end up worse off than the award.
Fair Work Ombudsman, Awards (updated May 2026). Awards are made under the Fair Work Act 2009 (Cth) Part 2-3.
What awards add on top of the NES
While the NES provides the floor, modern awards commonly add the following on top:
| Award extra | What it means |
|---|---|
| Annual leave loading | An extra percentage (commonly 17.5%) paid on top of base pay while taking annual leave |
| Extra annual leave for shiftworkers | 5 weeks instead of 4 weeks per year for eligible shiftworkers defined in the award |
| Penalty rates | Higher pay rates for evenings, weekends, and public holidays |
| Allowances | Tool allowances, meal allowances, laundry allowances, travel |
| Rostered days off (RDOs) | Scheduled paid days off in industries with compressed working weeks |
| Industry-specific redundancy | Some awards (Building, Manufacturing, Black Coal) have their own redundancy scales that replace the NES scale |
Not every award includes all of the above. The extras that apply to you depend on your specific award and the clauses within it.
Leave loading explained
Annual leave loading is an additional payment made when an employee takes annual leave. The most common rate in modern awards is 17.5%of the employee's ordinary time rate. It compensates for the loss of shift penalties, overtime, and allowances that an employee would have earned if they had worked those days instead of taking leave.
Leave loading is not a NES entitlement: it must be provided by your award, enterprise agreement, or employment contract. If none of these require it, your employer is not obligated to pay it. When employment ends, any accrued annual leave must be paid out at the same rate the employee would have received had they taken the leave during employment, including any leave loading entitlement.
Fair Work Ombudsman, Payment for annual leave (updated October 2025). Legislative reference: Fair Work Act 2009 (Cth) ss.16, 89(2), 90.
Priya earns $30/hr and her award provides 17.5% leave loading. When she takes 2 weeks annual leave (80 hours at 38 hrs/wk), her base pay is $3,040. The leave loading adds $532 (17.5% of $3,040), giving a total leave payment of $3,572 for those 2 weeks.
How to find your award
The Fair Work Ombudsman provides a free Find My Award tool at fairwork.gov.au. It asks three questions: whether your workplace has a registered agreement, your industry, and your occupation. The result is the name and a link to the full text of your award.
If you already know your award name, the full current text of every modern award is published on the Fair Work Commission website at fwc.gov.au.
Common awards by industry include:
- Retail: General Retail Industry Award 2020
- Hospitality: Hospitality Industry (General) Award 2020
- Fast food: Fast Food Industry Award 2010
- Clerical: Clerks Private Sector Award 2020
- Building and construction: Building and Construction General On-site Award 2020
- Health professionals: Health Professionals and Support Services Award 2020
If your employer has a registered enterprise agreement that covers your role, the agreement applies instead of the award for the conditions it covers. The agreement must have passed the “better off overall test” when it was approved, meaning employees were better off overall compared to the underlying award.
Award-free employees
Some employees are not covered by any modern award. This commonly applies to high-earning professionals, senior managers, and certain roles in industries that are entirely award-free. Award-free employees still receive every NES entitlement (4 weeks annual leave, 10 days personal leave, public holidays, etc.) but do not receive any award-specific extras such as leave loading or penalty rates unless their employment contract provides for them.
Whether you are award-free is determined by the coverage clause of every award: if none of them describe your industry and occupation, you are award-free. The Find My Award tool will confirm this.
Key takeaways
- A modern award is a legal document setting minimum pay and conditions on top of the NES. It applies automatically if your industry or occupation is covered.
- Common award extras include annual leave loading (often 17.5%), shiftworker leave (5 weeks), penalty rates, and allowances. Not all awards include all of these.
- Leave loading is not a NES right: it must come from your award, agreement, or contract. If none of those require it, your employer does not owe it.
- Use the Fair Work Ombudsman's Find My Award tool at fairwork.gov.au to identify your award in under a minute.
- Award-free employees still receive all NES minimums, just no award-specific extras.
Author & reviewer
Sarah has spent over a decade advising Australian SMBs on Fair Work, NES compliance, and payroll. Based in Sydney, she has worked across hospitality, retail and professional services.