Loaded rate

A loaded rate is a single, higher hourly rate paid instead of separately itemising penalty rates, overtime or loadings — one number that's meant to cover the lot. It promises simpler payroll; the law's response is, in effect, "fine, as long as nobody ends up worse off than the award."

Where loaded rates can lawfully live

• Enterprise agreements: a loaded rate can be approved if it passes the Better Off Overall Test against employees' real rostered patterns.
• Award clauses: a few awards build them in — the HIGA, for instance, has loaded rate arrangements for certain full-time classifications, with strict limits on when and how much those employees can work.
• Common-law set-off contracts: a contract can pay above-award and set the excess off against award entitlements — but only if it clearly says which entitlements, and the rate genuinely covers them in each pay period. A good January can't subsidise an underpaid June.

The drift problem

Loaded rates fail quietly, through roster drift: the rate was fair for the pattern someone worked when it was set, then weekends crept in, nights got added, and the maths stopped holding. The fix is periodic checking of the loaded rate against hours actually worked — which means keeping the time records that make that check possible. Simplifying the payslip never removes the award underneath it.

Award loaded rate clauses (e.g. HIGA), enterprise agreements approved under the Fair Work Act 2009 (Cth) Pt 2-4, and common-law set-off principles — see the Fair Work Ombudsman.

Related terms

• Better Off Overall Test (BOOT)
• Annualised salary arrangement
• Penalty rates