We often get asked about the payment of overtime for casual employees. Many employers are overpaying their casuals when they do overtime as the employer is multiplying the casual rate of pay by the penalty rate and thus paying a penalty rate on the casual loading.

When calculating the overtime it is a matter of using the base classification rate, that is, the hourly rate for a permanent employee, multiplying that by the relevant penalty rate, then adding the flat casual loading.

For example, the base rate for a Level 1 permanent employee under both the Horticulture Award and the Pastoral Award is $22.61 per hour. A casual is paid $28.26 per hour which includes the loading of $5.65 per hour.

Therefore, if the employee is entitled to time and one-half for overtime, the casual employee will be paid,

($22.61 x 1.5) + $5.65 = $33.92 + $5.65 = $39.57 per hour

Some employers are incorrectly paying $42.39 per hour, costing the employer an additional, and unnecessary, $2.82 each hour.