Most Australian restaurant owners are not trying to underpay their staff. Most underpayment happens because the Hospitality Award is genuinely complex, and managing it manually leaves too much room for error.
Getting it wrong can lead to back-pay liabilities going back six years, penalties of up to $93,900 per breach for businesses, and serious damage to your reputation. The Fair Work Ombudsman consistently lists hospitality as a priority enforcement sector, meaning audits are not theoretical. They happen, and they happen in venues exactly like yours. (Future Food)
This guide explains the key compliance points in plain terms.
Which Award Covers Your Restaurant?
This is where many operators make their first mistake. There is more than one award covering hospitality workers in Australia, and applying the wrong one creates compliance risk from day one.
A café might fall under the Restaurant Industry Award, while a pub could be covered by the Hospitality Industry (General) Award. Coverage depends on the primary nature of the business and the employee’s actual duties, not just the job title. (Future Food)
The two most relevant awards for restaurant and cafe operators are:
- Hospitality Industry (General) Award 2020 (MA000009) — covers hotels, pubs, bars, taverns, resorts, and their connected food operations
- Restaurant Industry Award 2020 (MA000119) — covers standalone restaurants and cafes
If you run a hotel, pub, bar, or accommodation business, HIGA applies. If you run a standalone restaurant or café, the Restaurant Industry Award likely applies instead. When in doubt, use the Fair Work Ombudsman’s Pay and Conditions Tool (PACT) to confirm which award covers your employees. (Restroworks)
Current Pay Rates in 2026
As of 1 July 2025, base award pay rates increased by 3.5% following the Fair Work Commission’s annual review. The adult minimum base rate is currently $24.95 per hour for full-time and part-time roles at Level 1 (Restroworks)
Pay rates increase every year from 1 July. Here is a quick reference for Hospitality Award (MA000009) rates in 2026:
| Classification | Full-Time/Part-Time | Casual (incl. 25% loading) |
| Level 1 (Kitchen Hand, FOH Grade 1) | $25.85/hr | $32.31/hr |
| Level 6 (Cook Grade 5 / Tradesperson) | $30.68/hr | $38.35/hr |
Using the wrong classification level is itself a breach of the Award. A staff member performing Level 3 duties but paid at Level 1 rates is being underpaid regardless of whether that was intentional (IMARC)
Penalty Rates: Where Most Errors Happen
Base rates are only the starting point. Penalty rates under the Hospitality Award in 2026 are: Saturday 125% for permanent staff, 150% for casuals. Sunday 150% for permanent staff, 175% for casuals. Public holidays 225% for permanent staff, 250% for casuals (IMARC)
Public holidays catch operators most often. 250% is significantly higher than many venue owners expect. One public holiday shift paid at Sunday rates (175%) instead of the correct 250% is immediate underpayment, and public holidays in hospitality are rarely optional (IMARC)
Evening and night loadings work differently from penalty rates and this is another common error source. Evening work between 7pm and midnight adds $2.81 per hour as a flat amount. Night work between midnight and 7am adds $4.22 per hour as a flat amount. Neither is a percentage. Applying 10% or 15% instead produces underpayment at higher classification levels (IMARC)
To illustrate the real cost of getting this wrong: a venue applying a 10% evening loading instead of the correct $2.81/hr flat loading across three bar staff working four-hour evening shifts five nights a week creates over $700 in underpayment per year. Across higher classification levels, the gap widens further (IMARC)
Superannuation: The Rule That Changed
The Super Guarantee rate is now 12%. Employers must pay super on eligible earnings regardless of how much the employee earns. The former $450 per month minimum earnings threshold has been removed (Restroworks)
This change directly affects venues that rely heavily on casual and part-time staff who work short shifts. Anyone who was previously under the $450 threshold is now entitled to super on every dollar earned. If your payroll has not been updated to reflect this, you are likely underpaying super across a significant portion of your casual workforce.
Record-Keeping: The Requirement Most Operators Underestimate
Employers must keep records for each employee showing their name, start date, employment type, classification level, hours worked each day including start and finish times, wages paid, leave taken, and allowances paid. Records must be kept for seven years and be accessible for inspection by employees and Fair Work Inspectors (Mordor Intelligence)
Poor record-keeping is one of the most common compliance failures. If Fair Work investigates, poor records make it difficult to prove you have done the right thing, even when you have (Mordor Intelligence)
The practical takeaway: if your timesheets are informal, your rosters are stored in a text thread, or your classification records are not documented in writing, that needs to change.
Why Manual Payroll Management Does Not Work in Hospitality
The complexity of the Award makes manual calculations genuinely risky at scale. Most payroll issues in hospitality do not arise from deliberate misconduct. They happen because of incorrect employee classification, failure to apply penalty rates to weekends and evenings, outdated payroll systems still running old rates, and no formal process for reviewing award changes each July. (Broadsheet)
If you do not update rates on time, the risk is not just payroll errors. It can become a formal underpayment issue. In hospitality, the bigger compliance risk usually comes from the combination of multiple simultaneous errors across classification, penalty rates, and allowances (Hospitality Technology)
This is where automated compliance tools remove the risk entirely. HospoForce handles award rate calculations, super requirements, and visa status checks automatically, so the numbers update when the Award changes and operators are not exposed to penalties from errors they did not know they were making.
You can see how this works in the context of day-to-day workforce management in compliance made simple: award rates, super, and visa checks automated.
A Practical Compliance Checklist
Run through this for your venue at least once per year, and again every July when Award rates change:
- Have you downloaded the updated Fair Work pay guide for your specific award?
- Is every employee correctly classified based on their actual duties?
- Are evening and night loadings applied as flat dollar amounts, not percentages?
- Are public holiday rates set at 225% or 250% depending on employment type?
- Is super being calculated on all casual earnings with no minimum threshold applied?
- Are employee records, including start/finish times, kept and stored for seven years?
If the answer to any of these is uncertain, that is where to start.
Frequently Asked Questions
What is the difference between the Hospitality Award and the Restaurant Industry Award?
The Hospitality Industry (General) Award (MA000009) covers hotels, pubs, bars, taverns, and accommodation businesses including their food operations. The Restaurant Industry Award (MA000119) covers standalone restaurants and cafes. Which one applies depends on the nature of your business and the duties your employees perform. Use the Fair Work PACT tool to confirm which applies to your operation.
How often do award rates change in Australia?
Award rates are reviewed annually by the Fair Work Commission, with any increases typically applying from the first full pay period on or after 1 July each year. Operators need to update their payroll settings each July to stay compliant.
Can underpayment be unintentional and still result in penalties?
Yes. Underpaying employees can result in back-pay liabilities going back six years and penalties of up to $93,900 per breach for businesses regardless of intent. The Fair Work Ombudsman distinguishes between deliberate and inadvertent underpayment when determining enforcement action, but both require back-payment of all underpaid amounts (Future Food)
Does the 12% super rate apply to all casual staff regardless of hours worked?
Yes. Since the removal of the $450 per month minimum earnings threshold, super is payable on all eligible earnings for all employees, including casuals working very few hours. There is no minimum shift length or earnings floor for super entitlement.
What is the safest way for a small restaurant to stay award-compliant?
Using award-interpreting payroll or workforce software that automatically updates when rates change is the most reliable approach. Manually managing Award compliance across changing rates, multiple employment types, and complex penalty structures creates unnecessary exposure. Automating the calculation removes human error from the equation entirely.
Payroll compliance in Australian hospitality is not simple, but it is manageable with the right systems in place. The operators who get into trouble are almost always those managing it manually and discovering the errors only after a Fair Work inquiry forces the issue.
Explore HospoForce to see how automated compliance tools keep your award rates, super, and visa checks accurate without requiring a payroll specialist on your team. And for the latest official pay guides, always verify directly with the Fair Work Ombudsman.
